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Industrial & Innovation Policy
BELGIUM
Belgium
Agenda

Introduction

Political System

Economic Profile

Industrial policies
1. Introduction
Belgium in Europe
 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
2. Political system
1830: independence: unitary state
 BUT: language border!
=> Flanders / Wallonia / Oostkantons


5 state reforms
– 3 Communities
– 3 Regions
 Communities & Regions
 A structure on 3 levels
Federal state
+ 3 Regions
+ 3 Communities
10 Provinces
589 Communes
 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:
environment,…
– Foreign trade!!
 Problems!!!
town planning, employment,
3. Economical profile
a)
Geographical situation
b)
General Economics
c)
International cooperation
d)
Economic problems
a) Geographical location

Lack of mountains + border to North Sea

In the centre of the «industrial square»:
Ruhr -- Randstad Holland -- Nord-Pas de Calais -- LorraineSaarland

in the centre of European ”megalopolis” , a
major urban and economic corridor
(Liverpool – Genua)
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)
 GDP in Belgium
% of GDP
14%
1%
27%
agriculture
industry
privat services
public services
58%
 Import & Export
Belgium
EU average
Export (% of GDP)
76,5 %
32,2 %
Import
72,9 %
31,0 %
(% of GDP)
50% of export: neighbours
 25% of export: other EU members

Foreign investment!
 Ups and downs of economy –-fluctuations of our neigbours

 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,…
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!
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
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)
4. Industrial and innovation policies
a)
Belgian industry in general
b)
Regional policy
- Kortrijk-region
--- Flanders Language Valley
- Euregio Maas-Rhine
- Flemish Diamond
 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)
 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
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
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

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
 Euregio Maas-Rhine
 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
 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
--Wim Dooms -- 29-10-2003--