Industrial & Innovation Policy

1. Industrial & Innovation Policy BELGIUM

2. Belgium

3. Agenda • Introduction • Political System • Economic Profile • Industrial policies

4. 1. Introduction Belgium in Europe

5. Introduction • Situated in the centre of Western Europe • Very small: ca.32.500 km² • Population: ca.10.000.000 • Capital: Brussels • Neighbours: The Netherlands, Germany, France, Luxembourg & UK

6. 2. Political system • 1830: independence: unitary state • BUT: language border! => Flanders / Wallonia / Oostkantons • 5 state reforms • 3 Communities • 3 Regions

7.  Communities & Regions

8.  A structure on 3 levels Federal state + 3 Regions + 3 Communities 10 Provinces 589 Communes

9. Competences • Federal state: • Everything that affects the interests of all belgians: foreign affairs, national defence, justice, finance,… • Responsabilities vis-à-vis the EU and NATO • Communities: • Matters relating to the people: language, culture, education,… • Regions: • Territorial matters: town planning, employment, environment,… • Foreign trade!!  Problems!!!

10. 3. Economical profile • Geographical situation • General Economics • International cooperation • Economic problems

11. a) Geographical location • Lack of mountains + border to North Sea • In the centre of the «industrial square»:Ruhr -- Randstad Holland -- Nord-Pas de Calais -- Lorraine-Saarland • in the centre of European ”megalopolis” , a major urban and economic corridor (Liverpool – Genua)

12. b) General economics • real economic grotwh 2003: 1,0% • inflation 2003: 1,3% • GDP per capita: > 13% => relative wealth • revenue per worker: 62.560 € (20% higher than EU average)

13. GDP in Belgium

14. Belgium EU average Export (% of GDP) 76,5 % 32,2 % Import (% of GDP) 72,9 % 31,0 %  Import & Export • 50% of export: neighbours • 25% of export: other EU members • Foreign investment! • Ups and downs of economy –-- fluctuations of our neigbours

15.  Import & Export • 40% of export: 3 large groups • Transport equipment • Machinery & appliances • Chemical & pharmaceutical products • Other 60%: large variety • Diamonds, carpets, comic books & childrens books, linen, flowers (azalea & begonia), beer, chocolate,…

16. c) International cooperation • prosperity = dependent on external trade => active part in intern. cooperation • BLEU • Benelux (+ Benelux Trademark Office) • One of the 6 founder countries of ECSC, EEC & Eurotam • pro european unification!

17. d) Economical problems • Unemployement • 14 % of active population • High wage cost, high labour cost, structural problems of Labour market • 200.000 new jobs <-> - 4.000 Ford • Administrative burden • Costs for administrative tasks: 3,4% of GDP • Lack of entrepreneurship! • ”state secretary of administrative simplification” • Government deficit • Welfare state

18. d) Economical problems • Government deficit • Extreme until 1993 • Draconian rehabilitation plans • government debt/GDP ratio: 110.6% • Administrative burden • Costs for administrative tasks: 3,4% of the GDP (around 9 billion €) • Lack of entrepreneurship! • ”state secretary of administrative simplification” • Welfare state • Ageing populiton => not engough money to pay pensions • ”Early retirement” at 55 (even 50)

19. 4. Industrial and innovation policies • Belgian industry in general • Regional policy • Kortrijk-region --- Flanders Language Valley • Euregio Maas-Rhine • Flemish Diamond

20.  Belgian industry in general • Industrial sector: • 1/4e of all jobs • 30% of added value • Major regional contrasts • North: industrialised • Antwerp: chemical sectors • Ghent, Zeebrugge, Brussels • Central Flanders, Kortrijk-region, North-east • South: not industrialised at all (anymore)

21.  Belgian industry in general • De-industrialisation & Teriarisation • structure of industrial activity has changed a lot • De-industrialisation since 50s: • 1957-1992: all 120 coalmines have been shut down (in Flanders) • Production of steel (Wallonia) almost entirely stopped • decline in jobs compensated by development in tertiary sector

22. b) Regional policy • Complex structure + different cultures => no single industrial policy • Stimulation of regional development within different Communities & Regions • Wallonia: after decline of steel production: ?? • Flanders: certain regions developed • 70s – 80s: Euregio Maas-Rhine • Early 90s: Kortrijk-region • Late 90s: Flemish Diamond

23. Kortrijk-region –Flanders Language Valley • Light industries, SMEs, local management • Part: ”Flanders Language Valley” (speech tech) • Cluster of localised technological change • After Sillicon Valley-model: strong pilote firm, venture capital, education, informal networking • L&H research lab: a common source of codified knowledge • Fast entrepreneurial reaction => developing broad range of applications • Favourable communication conditions  innovative linkages between SMEs

24. Kortrijk-region –Flanders Language Valley • Companies: mutual advantage: • learn form each other • Using common pools of resources in proximity • E.g. employees in ”collective pools of labour” created by several education and training programmes • But: owners of L&H: FRAUDE ! • Big scandal • Technology sold to Americans • FLV collapsed

25. Euregio Maas-Rhine

26. Euregio Maas - Rhine • Norhteast of Flanders, near Holland & Germany, near Maas and Rhine rivers • Lagging region without industries • 70s: development started, because in “New” Europe cross-border cooperation at local and regional level was becoming more important • Agreement with Holland & Germany • Large foreign companies ( <-> SMEs in FLV) • Benefited from large amount of labour force

27.  Flemish Diamond • Region in centre of Flanders,Antwerp – Ghent – Brussels – Leuven • Urban network on international level • Industrial economy => knowledge economy • Knowledge = critical succes factor for the future • Well-functioning urban network, modern infrastructure to transport goods and person are necessary • Growth of Flanders depend on development of this diamond

28. --Wim Dooms -- 29-10-2003--