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Belgium - RIO Country Report

RIO Country Report Belgium 2015

The annual RIO Country Report offers an analysis of the R&I system in Belgium, including relevant policies and funding, with particular focus on topics critical for EU policies. The report identifies the main challenges of the Belgian research and innovation system and assesses the policy response.

R&I Challenges
Improve public-private collaboration on innovation
Challenge description: 

Belgium shows a relatively solid performance regarding private R&D expenditure (8th position in the Innovation Union Scoreboard), but scores only average for other input indicators such as R&D expenditure in the public sector (14th position). Performance indicators for innovation output also depict a mixed picture, with below EU average scores for community trademarks (19th position), export of medium and high-technology products (17th position), sales of innovations (15th position) and SMEs introducing marketing or organisational innovations (17th position). This contrasts with the good results regarding research outputs as illustrated by the share of public-private co-publications (3.3%, compared to 1.8% for the EU28 ) over the period 2011-2013. Therefore, the high quality of the research system is considered to be inadequately translated into economic performance and public-private collaboration on innovation is described as one of the major concerns at all government levels. Several measures are in place in each region aimed at economic exploitation of research, but research outputs are so far not aligned with the absorptive capacity of SMEs. In this context, one of the main challenges of the Belgian R&I system is to link accumulated research capacities and results to the economic eco-system.

Policy Response: 

In the last few years, Belgium has implemented a substantial number of measures to become a more knowledge-intensive economy.

In Wallonia and the federation Wallonia-Brussels, the Research Strategy 2011-2015 "Towards an integrated research policy" developed a specific action plan to support "young innovative companies" and public-private research collaboration. Encouraging growth of companies through R&I policy is an integral part of the Marshall Plan 4.0, adopted in May 2015. A cornerstone of that strategy is the further development of the competitiveness clusters, based on the rationale of smart specialization.

The Flemish government also develops a pro-active policy and spent €2.20b in science and innovation policy in 2014, of which €1.40b was for R&D. In July 2015, the Flemish Government approved a concept note on a new cluster policy and started the elaboration of this process with a call end 2015 for Innovative Business Networks (IBN). In another initiative to strengthen the transfer of scientific knowledge to the business sector, the 2014-2019 Policy Note for Work, Economy, Science and Innovation emphasizes the transition of doctoral graduates to the labour market as one of its main priorities.

The Brussels Capital Region’s main instrument for spanning the boundary between public and private entities is the Bridge programme, which was launched for the first time in 2010. Bridge projects are academic research projects for which economic enhancement in the Brussels-Capital Region may be envisaged in the short or medium term. Further initiatives have been announced in Brussels’ Strategy 2025, most notably the objective to transition Brussels to a “Smart City”, whereby the precise agenda will be determined jointly with the smart specialisation strategy that will be updated in the future Regional Innovation Plan 2015-2020.

Policy assessment: 

The wave of recent reforms undertaken at all regional levels shows that Belgium has put knowledge transfer and innovation at the very top of its agenda. This effort needs to be sustained. Public innovation support can still be simplified and more targeted to increase Belgium's performance in maximising the commercial benefits of R&D. In addition, the competitiveness clusters and the research and technology centres created over the last decade need further sustained funding, regular evaluation and expert management in order to contribute effectively to the economy. A clear opportunity to capitalize further on Belgium’s excellent science base is to make universities and public research organizations more entrepreneurial. While some universities already display quite strong performance in this respect, entrepreneurial universities and PROs could take up an even stronger role as catalysts of Triple Helix interactions.

Addressing the expected shortage of human resources for R&I
Challenge description: 

While the labour force in Belgium is generally well-qualified, the share of science, technology, engineering and mathematics (STEM) graduates is low (15.74%; EU28: 25.44%) and declining and the demand exceeds the number of graduates. Shortages in these fields are considered as a potential major barrier for future innovation and are already emerging for certain functions, such as ICT experts. In the Flemish Community, STEM graduates has started to rise again in recent years. In 2014, 37.7% of enterprises with job vacancies requiring specialised ICT skills reported problems in filling these positions. For the ICT workforce alone, the shortfall is expected to rise from about 8,000 in 2012 to 30,000 in 2020.

More generally, a skill mismatch is observable - particularly acute in the Brussels-Capital region - and is mainly related to a lower supply of highly-skilled job-seekers than employers need and to an over-representation of low-skilled job seekers.

Policy Response: 

At all levels, different measures have been taken to tackle the issue of human resources for innovation. Belgium developed a Youth Guarantee Implementation Plan, updated in 2014, which constitutes an early intervention strategy to ensure young people are maximally integrated into the economy through job and traineeship offers. In 2012, Flanders launched the STEM Action Plan in combination with a science communication plan to increase the number of secondary and higher education students in STEM. This initiative will be extended: the Policy Note Work, Economy, Science & Innovation 2014-2019 has announced the development of a new strategy, jointly with the Minister for Education, in order to increase the inflow of students into STEM curricula and to increase the share of students with a first work experience. In order to lower the threshold for Flemish students to become entrepreneurs, from 2016 they will be able to obtain - whilst studying at a university or college - a ‘certificate of management knowledge’, which is a formal requirement to start a business for people who do not (yet) have a Bachelor degree. Wallonia's Beware Fellowships support researcher mobility and promote awareness of S&T among youth.

The Marshall Plan 4.0 (see in particular its Axis 1) aims to better align the supply of graduates in Wallonia to business needs, amongst others through the set-up of an inventory of ‘professions of the future’.

Complementarily, all regions have developed action plans against early school leaving in the last years to reduce the mismatch between low-skilled workers and high-skilled occupations. Policy attention has also increasingly turned towards attracting foreign researchers or researchers from the own Community that are active abroad, in Flanders Odysseus, [PEGASUS]²),  the French Community  (Ulysse) and the Brussels Capital Region (Attract). Another noteworthy initiative in this regard is the plan of several universities to increase the number of Master programs offered entirely in English. At federal level, the government increased the wage withholding tax deduction for the employment of researchers to 75% in 2009, and 80% as from 1 July 2013. The tax incentive amounted to €761m in 2014 compared to €696m in 2013.

Policy assessment: 

Some progress is being observed towards addressing skill mismatches and early school leaving. The number of measures that have been taken in the last year denote an awareness and concern at all government levels regarding the human resource problem and its implications for innovation. Since the successful translation of science and technology into products and services is strongly related to the availability of a pool of aptly skilled workers, these efforts should be sustained, and if possible increased. In particular the efforts to increase inward mobility of human capital, and the introduction of more flexible higher education trajectories to mitigate the strict separation of education and work are commendable.

1. Overview of the R&I system

Belgium is a small densely populated federal State (11.2m inhabitants in 2013, about 2.21% of the EU28 population). Total gross domestic product (GDP) was €400.6b (at market prices) in 2014 (2.9% of EU28). Per capita GDP in 2014 was €36,000. This is 31.9%% above the EU28 average (i.e. €27,300). There are significant regional differences in the GDP per capita: Wallonia lies just below the EU28 average (98.3% in 2010), Flanders lies well above (132.7%) and Brussels-Capital lies extremely high above (250.2%).

The main responsibility for research and innovation policy and funding in Belgium lies with the three regions (Brussels-capital, Wallonia and Flanders) and the three communities  (Flemish, French and German-speaking, with the latter not deploying R&I policy due to its small size and lack of related institutes - but being included in the Walloon Region). The regions are the main source of innovation and business R&D support, while the communities are the main sources of scientific research support. The federal level does not function as an umbrella body above regional and community levels, but is a complementary layer alongside the regions and communities. Jointly, there are thus five active levels of public governance for R&I policy (the Flemish government responsible for both Community and Regional policy). It is important to point out that R&D tax credits, a major R&D instrument in Belgium, is a competence of the federal state and is not devolved to the regions or communities. Belgium’s R&D intensity has been increasing over the past years from 1.97% in 2009 to 2.42% in 2013 and 2.46% in 2014, which is above the EU28 average of 2.01% (2013).

2. Recent developments in research and innovation policy and systems

Key developments in the R&I system in 2015 included:

(1) At inter-regional level:

-  A joint call targeting collaborative projects with SMEs was launched in early 2015 by the three regions. 

(2) For Wallonia:

- The Marshall Plan 4.0 (2015-2019) was approved by the Walloon Government in May 2015, as the successor of the earlier Marshall Plan 2.Green and Marshall Plan 2022 of the previous legislatures.

- The Smart Specialisation (S3) strategy of Wallonia, titled "Towards a regional policy for sustainable industrial innovation" was adopted in September 2015.

- The Agence de l’Entreprise et de l’Innovation (AEI), which is the new single point of contact for companies, has been operational since January 2015.

- A Digital Plan (Plan du Numérique) was proposed in September 2015. The goal is to develop the digital economy and its dissemination throughout all sectors, particularly in the areas of health, smart cities and mobility.

- The Walloon Small Business Act 2015-2019, which, as part of its 1st objective (entrepreneurship) aims for early detection of SMEs with high growth potential to offer them customized guidance. 

(3) For Flanders

- Flanders: Vision 2050. This strategy was adopted in September 2015 and substitutes the previous long term vision of the Flemish Government, the Flanders in Action initiative (VIA).

- In 2015, preparations started for the announced organisational reform of the EWI policy domain. The Research Foundation Flanders (FWO) as of 2016 will include the programmes of the Hercules Foundation for research infrastructure and computing (which is being liquidated) as well as 3 support programmes of the innovation agency, IWT: TBM (applied biomedical research), SBO (strategic basic research), and the SB-fellowships (strategic research fellowships). As of 2016, FWO is the single contact point for researchers active in the Flemish Community. Also, the new Flanders Innovation and Entrepreneurship (AIO, Agentschap Innoveren en Ondernemen), as of 2016 is the one-stop shop for all business support. AIO is the result of the merger of Enterprise Flanders (AO) with the business-related support programmes of the IWT (agency for Innovation by Science and Technology), which is suspended.

(4) For Brussels-capital

- Strategy 2025: This new multi-annual strategy for Brussels adopted in June 2015 lists the rationalisation of the institutional landscape for business support as one of its 18 objectives.

(5) At Federal level

At the federal level, as of 1 July 2013 the fiscal support for the partial wage withholding tax exemption for researchers is increased to 80%. The space activities at the federal level are further strengthened and will be integrated in an “independent” space department as of 2016. The scientific public service and the research role of the Federal Scientific Institutions will be maintained, but independent from the Belgian Science Policy Office. The Belgian Science Policy Office is expected to be integrated as a directorate within another Public Service.

3. Public and private funding of R&I and expenditure

Total public funding of R&D in Belgium in 2013 amounted to €3.5b. Government budgetary appropriations for R&D (GBAORD) in Belgium were €2.5b in 2013, a 5% increase compared to 2011. They further increased to €2.7b in 2014, but preliminary figures for 2015 show a decrease (for the Flemish and Walloon Region) to just above the 2013 level.

Regarding R&D intensity, Belgium is behind Germany (2.84%), but ahead of France (2.26%), the Netherlands (1.97%) and the United Kingdom (1.72%). This trend of R&D in Belgium for the period 2011-2014 is largely explained by the R&D performed by firms, which accounts for 69% of spending in Belgium (2013). The privately funded component of R&D, strongly linked to the economic situation, saw its growth stagnate at 1.16% of GDP in 2009, but recovered in subsequent years, and reached 1.38% in 2013.

4. Quality of science base and priorities of the European Research Area

Belgium is aligned with most ERA policies and proves to have a high quality research system. One of the few drawbacks regard open and transparent recruitment processes, which are generally applied by the Belgian institutions, but for which the information is often difficult to find for an external user. The reason is that vacancies for researchers or open academic positions are published by the universities themselves, so there is a variety of publication channels and methods.

5. Framework conditions for R&I and science-business cooperation

While it offers a stable business environment, Belgium has never been among the top countries in terms of its regulatory environment and how conducive it is to start or run a business. In the World Bank’s “Doing Business” index, Belgium is positioned 42nd in 2014.

At the supply side, indirect support for R&D&I has been supplemented by the increasing use of tax incentives which allowed reducing the labour cost of researchers and established a tax reduction for income from. The Federal Government Declaration of October 2014 consolidated the federal portfolio of tax incentives and even foresees to expand it to incomes from software licences. While public procurement is not yet widespread and used to foster innovation, some important new initiatives were recently taken in this regard. Especially the regions, responsible for industrial research and innovation, have gradually developed new demand-driven tools such as lead-user platforms, living labs or innovation platforms.

Belgium has gradually developed its portfolio of instruments, adding demand-side policies to supply-side direct and indirect support. The whole portfolio is impressive but in a next stage the various governance levels should evolve together towards further cooperation, which remains a structural challenge for the Belgian R&D&I system.

6. Conclusions

The two identified challenges put forward in the executive summary are summarised in the conclusions. The chapter lists relevant policy actions, assesses their appropriateness, efficiency and effectiveness.

Geo coverage
Report year
Country Report file
Official publication date
Tuesday, 3 May, 2016
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