On 18 September 2006, the Central Economic Council in Belgium hosted a meeting between the social partners on the Belgian system of innovation. At the meeting, the employers and trade union representatives reaffirmed the importance of the concept of innovation within the current economic and social network in Belgium. The partners emphasised the crucial role of innovation within the context of employment in a more competitive economy. This objective forms a pillar of the Lisbon Strategy and has a particular relevance in view of the current negotiations in Belgium towards a new inter-professional agreement for 2007–2008.
The European Lisbon Strategy has placed the concept of innovation at the core of a new debate in the EU Member States. By setting an objective for 2006 that each Member State should invest a minimum of 3% of national gross domestic product (GDP) in research and development (R&D), the European authorities reaffirmed the importance of such tools in the framework of a competitive knowledge economy and also in terms of employment.
In Belgium, this budgetary objective has been translated into many specific policy measures. Nevertheless, although innovation was already highlighted as being crucial in the Law of 26 July 1996, the first assessment measures were only conducted in May 2005. At that time, the joint body of the Central Economic Council (Conseil Central de l’Économie/Centrale raad voor het bedrijfsleven,CCE/CRB) was given the task of preparing a report (in French, 80Kb PDF) on the effective achievement of the 3% objective and also on the current state of innovation processes in Belgium.
Assessment of innovation in Belgium
The CCE/CRB report and that of the National Bank of Belgium (Banque Nationale de Belgique/Nationale Bank van België, BNB/NBB), published at the end of February 2006, provide an assessment of what has been achieved so far in terms of innovation. Both reports were submitted for consultation by the Belgian social partners.
On the trade union side, innovation is mainly interpreted to mean increased investment in training programmes, while the employer representatives believe that control of labour costs is an essential component of competitiveness through innovation. Both sides consider that innovation plays a crucial part in a more competitive economy and in the creation of employment. Moreover, innovation as a factor of competitiveness is certainly a crucial issue in view of forthcoming inter-professional negotiations. Indeed, for the worker and employer representatives – according to the Secretary of the Central Economic Council, Luc Denayer – ‘innovation is the way for Belgian employers and workers to perpetuate the (Belgian) socioeconomic model which they set up together, without outside interference’.
Issues in system of innovation
A report, presented to the CCE/CRB on 18 September 2006, highlights some issues in the Belgian system of innovation. The following points summarise its main findings.
- In 2003, an average of 1.92% of national GDP was allocated to R&D programmes in Belgium. Although this figure is in line with the European average, it is notably lower than the 3% objective laid down for 2006.
- The chemical and pharmaceutical sectors report the highest amount of investment in R&D.
- The complexity of the Belgian institutional structure, with its political fragmentation, hinders interaction between the various decision makers and those managing the financial budget.
- Researchers are paid relatively low salaries, in relation to the high cost of research.
- Small and medium-sized enterprises are not sufficiently involved in innovation processes, although such organisations play a significant role in the Belgian economy.
- A lack of follow-up on innovation processes emerged, with low priority given to R&D in general.
- Entrepreneurial activity in Belgium, measured by the creation of new companies with high potential, is lower than the European average.
Bonus initiative to encourage R&D
Conscious of the issues raised by innovation and the shortcomings of the current Belgian system, the authorities have already taken a series of initiatives to encourage R&D. The Federation of Belgian Enterprises (Fédération des Entreprises de Belgique/Verbond van Belgische Ondernemingen, FEB/VBO) has initiated a proposal to introduce a measure called the innovation bonus (prime à l’innovation); this bonus was adopted by the Law of 3 July 2005 (Articles 28–30) (BE0512304F). Each employee concerned will be exempt of personal social security payments for one year. Moreover, the amount of this premium will be tax free. The impact of this measure will be assessed at the beginning of 2007.
Cécile Arnould, Institut des Sciences du Travail (IST), Catholic University of Leuven