Drivingtobe Europe's Heartlandof Innovation
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FT SPECIAL REPORT Doing Business in Wallonia Tuesday November 13 2012 www.ft.com/reports | twitter.com/ftreports 2011, and unemployment levels of around 20 per cent, continues to be substantially behind Flanders, the Inside » Dutch-speaking region that comprises the northern half of Belgium. Driving to be However, although the Flemish region is considered to be better run, Liège with an economy 30 per cent larger than that of Wallonia, the gap is Continental rail and shrinking, especially when it comes to road connections attracting business and foreign direct Europe’s investment. are reviving the “The gap is still there and the [Wal- city’s fortunes loon] government has not always been great,” says Marcel Claes, head Page 2 of the American Chamber of Com- merce (AmCham) in Belgium, which represents 9,000 US companies. “Hav- Economy heartland of ing said that, one has to recognise that they have been increasingly The clusters that lie proactive in trying to attract new at the heart of the business.” Mr Claes says that despite Wallonia region’s grand being governed by the Socialist party recovery plan ever since greater autonomy was innovation Page 3 ‘We have given companies Taxation concrete aid that has Belgium has high The region’s assets are being deployed to create helped them cut their taxes but also many an international hub and efforts are starting to capital expenditure costs’ loopholes for those Jean-Claude Marcourt, prepared to look pay off, says James Fontanella-Khan Wallonian minister of economy and trade Page 3 allonia, once the heart of bear scars from the 1970s and 1980s, the industrial revolution such as certain battered neighbour- given to the Belgian regions in the Politics in continental Europe, is hoods of Charleroi – which suffered 1970s, in recent years they have desperate to be relevant the most when hundreds of busi- actively promoted more pro-business The spectre of a in the 21st century. The nesses shut as they became obsolete – measures than their centre-right federal break-up WFrench-speaking southern half of the others are clearly flourishing. counterparts in Flanders. country, the poorest region in Bel- Liège, with an impressive new train “A good support environment from is undermining gium, has been working hard to boost station, a revamped opera house and the regional government, the creation investor confidence productivity after 30 years of ups and several new museums, is testament to of several innovation-focused clusters, downs following the collapse of its such rejuvenation. Like many subsec- strong ties between business and local Page 4 steelmaking industry. Its efforts are tions of Wallonia it has invested heav- universities, and financial incentives beginning to pay off. ily in creating high-value sectors, have all helped make Wallonia an The so-called “Marshall Plan” – with emphasis on education, network interesting destination to do busi- Brewing which has provided investments of creation and innovation. ness,” says Mr Claes. more than €4.5bn since its introduc- This transformation has turned the Tax exemptions for companies in The world’s tion in 2006 by the socialist-led city into a frontrunner to host the innovative sectors such as green tech- growing taste for regional government – as well as a World Expo in 2017, placing it in the nology, pharmaceuticals, biotechnol- new era of more market-oriented local same league as emerging cities such ogy and logistics have led several Trappist ales is leftwing political leaders, have helped as Astana, its Kazakh rival for the research-focused multinationals to set creating jobs revive the flagging economy for the event, and China’s Shanghai, which up shop in Wallonia. first time in a generation. hosted the expo in 2010. Google, the internet search group, Page 4 Although parts of Wallonia still Wallonia, with a GDP of €73bn in Modern outlook: Liège station is one of many urban renewal projects Alamy Continued on Page 2 2 ★ FINANCIAL TIMES TUESDAY NOVEMBER 13 2012 Doing Business in Wallonia Continental Network of connections talent fosters prompt revival research challenging global environ- Life sciences ment, says Pascal Lizin, ‘Marshall Plan’ is head of public affairs at in city fortunes GSK Vaccines. producing results, In addition, the consensus is the Marshall Plan is a big writes Nicholas Hirst attraction for the biochemi- cal and biotech sectors. Launched by the Walloon Of the six sectors selected government in 2006, the by the second Marshall plan focused resources of Plan, life sciences is one €4.7bn on innovation and where Wallonia has long growth in sectors, includ- excelled and whose good ing life sciences. health has not diminished These sectors are organ- Liège A prime location and a financially savvy with age, accounting for ised into “clusters” through some 15 per cent of the which funding is chan- mayor have been crucial, writes Nicholas Hirst region’s economy. nelled for R&D, education GlaxoSmithKline and and new businesses. Baxter have long had signif- BioWin, the cluster dedi- ith a breathtaking new ing how this well-connected mayor icant R&D presences in cated to biotechnologies, railway station, a with limited powers is most effective Wallonia, surrounded by counts among its 500 mem- revamped opera house operating as a “facilitator” within Bel- homegrown forces such as bers some 100 companies, 50 and several new muse- gium’s myriad federal structures. UCB, a biopharma company research centres and 11,000 ums, green shoots are “You need to battle at all levels,” that focuses on diseases researchers. It brings uni- Wsprouting in this bustling city on the says Mr Demeyer. “This allowed us to affecting the nervous and versities and companies river Meuse that was at the heart of put the city’s finances in order and at immune systems and gener- together for applied Wallonia’s industrial rise and fall. the same time re-equip it.” ated revenues in 2011 of research projects supported After the near-complete collapse of Indeed, in addition to the sleek San- €3.2bn across 40 countries. by funding from the govern- steel production in Wallonia, public tiago Calatrava-designed station, Morgan Stanley rated its ment, says Mr Lizin. authorities at all levels have striven which hooks Liège into the European shares as one of 20 to hold “This is the first time that to reorient Liège’s economy. This high-speed rail network, several new for 2015, while Goldman industry people are respon- effort appears to be paying off as mul- retail centres have sprung up and the Sachs described a UCB pipe- sible for orientating new tinationals arrive to take advantage of city’s cultural sights have been line drug as a top 10 most research,” he says. The aim the city’s natural strength in logistics. revamped. Tourism has increased and likely to transform the is to ensure research is Small and medium-sized businesses a tram line through the city centre is pharmaceutical industry. market-driven. are carving a niche in fields such as planned for 2017. Fast track: Technical expertise in the area, This includes making decent commer- Smaller companies The cluster is also respon- space technology and broadcasting. As Liège’s major steelworks closed, a new station including research emanating from cial real estate available to them. include Eurogentec, a sup- sible for recruiting talent to The province of Liège’s gross leaving unemployment at close to 20 has linked the the University of Liège, has been a “There is enormous demand for plier of reagents and diag- the industry and scouting domestic product is €24bn with more per cent, some jobs migrated to the city to the powerful incubator for small compa- commercial property in and around nostic kits, and Mithra out international markets than 23,000 companies and rising, growing logistics sector. Liège’s river high-speed nies, including several specialist pro- Liège,” says Christophe Nihon, Phamaceuticals, focused on for its members. according to official estimates. port is Europe’s third largest, han- network Alamy viders in the space sector. founder of ImmoQuest, a commercial female healthcare. Both are In a typical example of a Some credit for this revival must go dling 21m tonnes of cargo a year and Spacebel, for example, designed soft- property agency. Multinationals are spin-offs from Liège Univer- BioWin investment, Mithra to Willy Demeyer, the socialist mayor catering for 25,000 jobs. It has direct ware for the Pléiades project, an earth taking advantage of the location, while sity and export to more lead an early project devel- re-elected in October for another term connections to the sea ports of Ant- observation satellite programme led small businesses have been moving than 40 countries. oping a treatment for cervix after 13 years in charge of Wallonia’s werp and Rotterdam. by France. out of the historic centre, he explains. The biochemical sector cancer resulting from HPV, economic capital. Its attractiveness will increase In parallel, Liège’s expansion into More business parks are on their has solid foundations in done in collaboration with Foremost among his achievements when work is finished in 2015 on the the audio-visual sector has been led way, as Liège pushes to host the 2017 Belgium, says Pierre another SME and the uni- has been the shedding of Liège’s Trilogiport, a multi-modal port facility by EVS Broadcast Equipment, which International Exposition. Liège hosted Hauser, head of external versities of Brussels and colossal debt, which stood at €5bn in that will better integrate the city’s has become the world’s leading pro- the 1939 Expo, although this was scup- research at GSK Vaccines. Liège. The project received the late 1980s and was finally paid off road, rail and waterway networks.