Flanders RIM Report 13-03-12
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Version: Final Date: 12 April 2012 Regional Innovation Monitor Regional Innovation Report: Flanders To the European Commission Enterprise and Industry Directorate-General Directorate D – Industrial Innovation and Mobility Industries Jon van Til Technopolis Group www.technopolis-group.com PREFACE The Regional Innovation Monitor (RIM)1 is an initiative of the European Commission's Directorate General for Enterprise and Industry, which has the objective to describe and analyse innovation policy trends across EU regions. RIM analysis is based on methodologies developed in the context of the INNO-Policy Trendchart, which covers innovation policies at national level as part of the PRO INNO Europe initiative. The overarching objective of this project is to enhance the competitiveness of European regions through increasing the effectiveness of their innovation policies and strategies. The specific objective of the RIM is to enhance the scope and quality of policy assessment by providing policy-makers, other innovation stakeholders with the analytical framework and tools for evaluating the strengths and weaknesses of regional policies and regional innovation systems. RIM covers EU-20 Member States: Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Poland, Portugal, Romania, Slovakia, Spain, Sweden and the United Kingdom. This means that RIM will not concentrate on Member States where the Nomenclature of territorial units for statistics NUTS 1 and 2 levels are identical with the entire country (Estonia, Latvia, and Lithuania), Malta which only has NUTS 3 regions, Slovenia which has a national innovation policy or Cyprus and Luxembourg which are countries without NUTS regions. The main aim of 50 regional reports is to provide a description and analysis of contemporary developments of regional innovation policy, taking into account the specific context of the region as well as general trends. All regional innovation reports are produced in a standardised way using a common methodological and conceptual framework, in order to allow for horizontal analysis, with a view to preparing the Annual EU Regional Innovation Monitor reports. European Commission official responsible for the project is Alberto Licciardello ([email protected]). The present report was prepared by insert Jon van Til (jon.vantil@technopolis- group.com). The contents and views expressed in this report do not necessarily reflect the opinions or policies of the Member States or the European Commission. Copyright of the document belongs to the European Commission. Neither the European Commission, nor any person acting on its behalf, may be held responsible for the use to which information contained in this document may be put, or for any errors which, despite careful preparation and checking, may appear. 1 http://www.rim-europa.eu Table of Contents 1. Main Trends and Challenges in the Regional Innovation System 1 1.1 Recent trends in regional economic performance 1 1.2 Recent trends in regional innovation performance 3 1.3 Identified challenges 5 2. Innovation Policy Governance 7 2.1 Degree of institutional autonomy 7 2.2 Institutional-set up, co-ordination and implementation mechanisms 7 2.3 Availability and use of policy intelligence tools 10 2.4 Key challenges and opportunities 11 3. Innovation Policy Instruments and Orientations 13 3.1 The regional innovation policy mix 13 3.2 Appraisal of regional innovation policies 19 3.3 Good practice case 20 3.4 Portfolio of innovation support measures 21 3.5 Towards smart specialisation policies 22 3.6 Possible future orientations and opportunities 23 Appendices Appendix A Bibliography................................................................................................25 Appendix B RIM Repository information ......................................................................26 Appendix C Statistical data.............................................................................................27 Regional Innovation Monitor i Figures Figure 1-1 GDP per capita at current market prices and projected growth rates ............1 Figure 1-2 Economic and innovation performance indicators ....................................... 4 Figure 2-1 Management and implementation structure of regional innovation strategy .......................................................................................................................................... 9 Figure 2-2 Flanders in Action (ViA): the role of strategic intelligence in Flemish policy making............................................................................................................................. 11 Figure 3-3 Estimated government funding for R&D in Flanders by source (€m and %) ........................................................................................................................................ 22 Tables Table 3-1 Overview of the regional innovation policy mix – for a full overview of policy priorities of the individual measures, see Table 3-2 ......................................................13 Table 3-2 Existing regional innovation support measures ............................................16 ii Regional Innovation Monitor Executive Summary 1. Introduction: Main recent trends in the Regional Innovation System Flanders is the largest region in Belgium, with a high and increasing economic performance. GDP grew substantially over the past decades to €32.2 per capita, and it is steadily about 25-30% above EU27 average. The Flemish economy is open (3rd in Innovation Scoreboard): it realised high exports and is characterised by a high number of multinationals, often decision centres abroad. Unemployment in Flanders is typically low. The economic recession hit Flanders hard (GDP: -3.4% in 2009), as its economy is largely depending on manufacturing and international trade. However, already in 2010 the Flemish economy showed sings of recovery (GDP +2.2%). Unemployment showed a relative small decrease when compared to the decrease of economic production (-1%); but labour efficiency decreased as well as the labour time due to flexible working time arrangements. The Gross Expenditures on Research and Development (GERD) was €4.2b in 2009, or 2.12% of GDP; which is above the levels of Belgium (1.96%) and the EU27 (1.91%). Governmental expenditures are relatively low (92% of EU27 average); business expenditures typically high. Over time the government expenditures on R&D have increased significantly, but the effects on GERD is levelled out by a relative decrease of BERD and an increase of GDP, so the research intensity is stable. BERD is depending on a large share of foreign-owned companies and multinationals with decision centres abroad. Hot spots in the Flemish economy are the chemical sector, ICT and Telecom, machinery and transport. The business sector is fit to innovate and has a rather high innovation rate of 52%. The most innovative sectors are ICT and electronics (84%). Flanders has strong knowledge production: both the publication and impact rate of Flemish scientists are high. Performance on patents is above EU27 level, but not as high as expected from a country with sound knowledge production. Moreover, the innovation capacity of Flanders is relatively high: Flanders has a high share of researchers in the active population, and human resources are well trained. Participation of the Flemish youth and young adults to higher education is very high: as a result a large – and growing – share of the population is higher educated. 2. Major innovation challenges and policy responses Given the relative good innovation performance of Flanders, analysis of reports and reviews (Soete et al. 2007; Ziaroko et al. 2010, Bruno & Van Til 2010; Bruno & Van Til 2011); ECOOM, 2011) of Flanders and Belgium reveals the following challenges. Regional Innovation Monitor i Challenge 1: Research investments largely depending on foreign companies Flanders acknowledges the importance of R&D in the knowledge economy and adopted the Lisbon targets. This led to intensified public investments in R&D over the last decade in both absolute and relative terms, but the absolute increase of public expenditures on R&D were levelled out by economic growth. Given the recent economic downturn and its negative effect on public spending, it will be hard to reach the target of the Lisbon treaty to let public R&D funding increase to 1% of GDP. Similarly, it seems too ambitious to increase business expenditures in R&D to 2%. Although Flanders is very successful in attracting foreign companies and foreign investments, high tax burden and relatively high labour costs remain a negative element for conducting research in Belgium (Bruno & Van Til, 2010). A main challenge to the Flemish economy is thus to anchor the multinationals with headquarters abroad in the Flemish system. The New Industrial Policy of the Flemish government (2011) aims to do so, using the leadplant concept. Older policy measures coordinating public-private research efforts in strategic research centres and competitiveness poles are proven measures in embedding and attracting R&D players in the Flemish system. Challenge 2: Changing industrial structures: renewal of the industrial sector with focus on strengths The industrial competitive position of Flanders is under pressure. The global market share of Flanders is decreasing, which in turn may lead to decreasing exports, employment and productivity. Indicators