Innovation clusters form heart of grand revival plan

Il y a 4 years
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Since 2006 Wallonia has implemented an ambitious and experimental economic stimulus policy that is aimed at returning prosperity to a region where the industrial revolution flowered in continental Europe. The so-called “Marshall  Plan” has provided investments exceeding €4.5bn, in addition to existing funds, for the period 2006-2014. Yet rather than being used to prop up heavy industry, the funds have focused on certain high-value sectors, with an emphasis on education, network creation and innovation.

The policy has proved a success. Jean-Claude Marcourt, a socialist and Wallonia’s minister of the economy, points to above-average growth in the sectors favoured by the plan. “The crisis has affected us, but we have done better than our EU neighbours in terms of growth and employment,” he adds. Wallonia’s attractiveness for logistics as well as the arrival of Google, the internet company, which has set up a data centre there, are further examples of the region’s broader reemergence from post-industrial gloom, he continues. Indeed, Mr Marcourt is just back from China, where he secured a promise to create a business incubator linked to the Catholic University of Louvain.

With a 2011 gross domestic product of €73bn and perennially weak growth, Wallonia compares starkly with Flanders. The latter has enjoyed impressive growth and GDP per capita is more than 30 per cent higher than in Wallonia. With greater powers following regional devolution and the prospect of an ever less solid Flanders, in 2005 the Wallonian government sought to adopt radical measures.

Yet the scale of the Marshall Plan surprised many, even in a region used to economic dirigisme. It also broke with earlier broadbrush economic policy, concentrating on only five sectors – life sciences, aerospace, logistics, agribusiness and mechanical engineering – and externalizing much decision-making.

The arrival of the Greens in the regional coalition in 2009 introduced a sixth priority sector, the “eco-economy”, and a rebranding of the economic stimulus policy as “Marshall Plan 2.Green”. The plan is novel in the way it mixes top-down and bottom-up approaches, says Marcus Dejardin, professor of economics at the University of Namur. It  preselects certain broad sectors but then leaves companies and university research centres to devise the commercial projects.

Indeed, each sector has its own cluster that brings together the various actors and channels funding for research and development, education, start-ups and spin-offs.

One condition of funding is that companies must be involved in the R&D process from the start. Officials are also on hand via the clusters to co-ordinate research, draw up business plans and conduct market studies.

Wallonia has also created AWEX, an agency with a dual aim of promoting Walloon companies internationally and of attracting foreign investment to the region. Much of that role involves helping foreign companies to navigate the Belgian administration and understand what assistance is available, in particular through the Marshall Plan. A report assessing the first Marshall Plan in 2010 trumpeted the creation of 27,000 direct jobs and 1,250 new researchers, as well as the training of 115,000 people.

In addition, although incubating innovation is a lengthy process, the first Marshall Plan-sponsored products are being rolled out. These include security software for supply chains and biodegradable food packaging.

“Wallonia has been catching up with Flanders, including in terms of per capita income,” he says Wallonia, he says, has come through several “tests of credibility”, beating off competition from several regions to attract distribution centres on two occasions from Johnson & Johnson, the healthcare company, and Google’s €250m investment in 2007 in a European data centre.

“Wallonia is very favourable for investors,” he continues. Between Belgium’s “notional interest” tax rate, the fiscal rebates offered by the region and AWEX, investors are well looked after, says Mr Marcourt.

Source: “Doing Business in Walonia”, Financial Times

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