November 9, 2023
Captain of industry and Flanders Make chairman Urbain Vandeurzen proposes a ten-year plan with Ambition 2030 that should grow the Belgian economy by 50 billion euros annually. The key? ‘A reindustrialization of Flanders and the long-promised reforms in pensions, the labor market and licensing policy.’
In recent years, a sleek white building has been built in Kortrijk. It has 6,000 square meters of laboratories and offices over four floors. It is the new innovation temple of Flanders Make, which opens its doors on Thursday. Flanders Make is the strategic research center for the manufacturing industry, which also has branches in Lommel (automotive) and Leuven (machine construction) and was established in 2014 in response to the closure of the Ford assembly plant in Genk.
The driving force behind Flanders Make is the entrepreneur-investor Urbain Vandeurzen, who is also chairman of the investment fund Smile Invest and was chairman of the employers’ organization Voka from 2006 to 2009. In the 1980s he co-founded the university spin-off LMS, a global player in simulation and test software for the automotive and aerospace industries. It was sold to the German Siemens for 700 million euros in 2012.
The combination of reforms and industrial investments can boost our GDP by 8 to 10 percent through productivity gains.
Chairman Flanders Make
‘Did you know that 25 years ago, when the Renault, Ford and Opel factories were still in full swing, our country produced the largest number of cars per inhabitant in the world?’ Vandeurzen tells it as a fait divers, but it fits the message he wants to convey at the opening of the third Flanders Make hub in Kortrijk. ‘The closures of car factories were indicative of the declining importance of the manufacturing industry in our economy. In 2003, our manufacturing companies still accounted for 23 percent of Belgian gross domestic product (GDP), the same as in Germany. In Flanders today that is still 17 percent. For the whole of Belgium, even only 14 percent, 5 percentage points less than the average in the European Union. That is a major problem for the prosperity and well-being of our country.’
The finding comes at a time when dark clouds are gathering over the Belgian and European industry. Vandeurzen refers to the mix of high energy, raw material and labor costs that plagues manufacturing companies in particular. ‘The consequences of this for Belgian companies are already palpable: in 2023 their revenues will fall by 6 percent, the highest in all of Europe. One in four companies uses temporary unemployment, and another one in four is considering using it. This does not necessarily require large new investments. Look at Agristo, which is setting up its new fries factory in northern France, or at Umicore, which may also go to France for its new battery recycling factory. Ineos’ mega-investment runs into problems because the government does not develop a clear framework for nitrogen emissions.’
‘In the meantime, our country’s debt ratio has risen to one of the highest in Europe and we will have a budget deficit of almost 5 percent in 2023, worth 26 billion euros. While we need to be able to spend 5 percent of GDP more just to finance an aging population.’
Result: our governments have no reserves to tackle a new crisis. We are not ready for the future. That is why the Flanders Make chairman is putting forward a complementary plan: Ambition 2030, a plan with two spearheads. One: governments must finally work on reforms in, among other things, the labor market, social security and licensing policy – ‘which have been planned for some time and will have to come anyway under pressure from Europe or the financial markets’. And two: a reindustrialization of our economy.
The potential productivity gains are 40 percent higher in the manufacturing industry than in the services sector. Then you know what to focus on: reindustrialization.
Chairman Flanders Make
‘Increasing the actual retirement age, lower labor costs, a better quality education system, a smoother licensing policy, a more efficient tax system and better valorization of innovation budgets would, according to calculations by the OECD, the think tank of the rich countries, increase our GDP in ten years’ time. increase by 7 percent or 40 billion euros per year.’
Plant new manufacturing companies in that favorable breeding ground and you will gain an additional 20 to 25 billion euros in GDP every year, says Vandeurzen. ‘Since the 2000s, we have been missing out on 50 to 75 billion euros in GDP every year because our productivity engine is no longer running sufficiently, Vandeurzen explains, with the figures from the European Commission in hand. ‘And the potential productivity gains are 40 percent higher in the manufacturing industry than in the service sector. Then you know what to focus on: reindustrialization. If we can increase the importance of the manufacturing industry again to 20 percent of GDP, as it was until 2003, this, in combination with the necessary reforms, would generate 50 billion euros more income every year.’
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Vandeurzen sees this reindustrialization as an important ‘catalyst assignment’ for Flanders Make. ‘We want to help our manufacturing companies with their digitalization, robotization, AI and automation, the sustainability transition and talent development. They could already go to our branches in Lommel and Leuven for the development of innovative cars and machines (products). The development of the factories of tomorrow (production processes and industry 4.0) will be the specialization of the new site in Kortrijk. We will also set up a Talent Academy there, where operators and product developers can receive advanced training.’
‘The combination of reforms and industrial investments can boost our GDP by 8 to 10 percent through productivity gains. In this way we maintain our prosperity, but also our well-being, our social system, our health care and our education. That positive message seems to me to be worth more than the complaining and complaining that you so often hear.’
Strategic research center for the manufacturing industry, such as VIB for biotechnology, VITO for, among others, the energy sector and Imec for chip and ICT technology.
Between 2014 and 2022, the number of researchers tripled to 850 and the number of innovation processes increased fivefold to 1,200.
200 member companies (including Picanol, Van de Wiele, Case New Holland, Atlas Copco, Crops and Sabca) that together generate 45 billion in turnover and employ 100,000 people.
In 2023, Flanders Make received 52 million euros from the Flemish government. The plan is to increase this to 70 million euros per year by 2027. For every euro of subsidy, companies put an extra 2.5 euros into the pot.
Estimated impact over ten years: 13 billion euros in additional turnover and additional direct employment of 7,600 people (plus 22,500 derived jobs).