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Competition for R&D heats up

Belgium is known for offering a favorable environment for R&D and innovation activities, but how does the country fare in an international comparison? We take a look at Belgium’s innovation performance through the lens of the Global Innovation Index and the EU Innovation Scoreboard.

Belgium fell four places in this year’s Global Innovation Index (GII), slipping to 27th of the 127 economies evaluated, and while the country is still classed as a ‘strong innovator’ in the 2017 EU Innovation Scoreboard, it trails behind the ‘innovation leaders’. (There are small discrepancies within Belgium, but all three regions do well.) In both rankings, Belgium is outperformed by its neighbors, particularly Germany and the Netherlands.

Knowledge transfer is key for innovation, and this is one area where Belgium excels. Belgium is the EU leader in innovation linkages and collaboration, and the country is ranked 9th in the GII for university/industry research collaboration.

According to the GII, Belgium is among the top innovators in the areas of school life expectancy (2nd place), logistics performance (6th place) and knowledge-intensive employment (11th place). Worryingly, however, Belgium ranks last for foreign direct investment (FDI) net inflows.

While the EU Innovation Scoreboard credits Belgium’s attractive research systems and firm investments, the report also flags weaknesses relating to employment impacts, sales impacts and intellectual assets.

The Belgian Government is taking measures to strengthen the country’s position as an innovator with the introduction of the Innovation Income Deduction earlier this year and, more recently, as part of the Summer Agreement, a proposal to expand the partial withholding tax exemption for researchers to also include bachelor degrees. These are steps in the right direction, but a continued effort to attract R&D investments will be needed to ensure Belgium’s competitive position on the regional and global market.