Flanders masters of innovation john vz-fit-2012 10 31
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FLANDERS:
MASTERS IN INNOVATION
John Verzeele, Oct. 31, 2012
Taipei
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Belgium’s tale of the tape
10-98 - 080133
Flemish Region 58% of population
82% of Belgian exports
Brussels Capital 10% of population
2% of Belgian exports
Walloon Region 32% of population
16% of Belgian exports
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FLANDERS: Key Figures
Flanders: a prosperous region
with an open economy in the core of Europe
Population: 6.28 million (= 57.6% BEL)
Language: Dutch (NL)
Surface: 13.521 km² (= 45% BEL)
GDP: €194 billion
GERD: €4.15 billion (+- 2/3 of BEL)
% GERD/BBP: 2.12% (2009)
Total public budget STI policy: €1.7 billion of which €1.07 billion R&D
The region has constitutional competences on
research, innovation and economic policy
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Strategic Location in Europe
Unique location at European crossroads
Proximity to EU headquarters of major commercial & official organisations
The port of Antwerp is Europe’s n°2, its most centrally located one, and port of entry for thousands of products.
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Flanders offers logistics operations access to the
largest one-day-market in Europe: main markets can be served within 24 hours
750 km
236 Mio consumers (53%)
€ 6 Bn GDP (67%)
Belgium at the heart of Europe EU=EU-27
members
500 km
131 Mio consumers (29%)
€ 3,7 Bn GDP (42%)
250 km
54 Mio consumers (12%)
€ 1,5 Bn GDP (17%)
Total EU population: 490 Mio
Total EU GDP: € 12.00 trillion
Source: PricewaterhouseCoopers, Report 2004 11-00 - 170149
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000501
R&D & Innovation
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Main drivers for R&D
Knowledge driven
Customer market
History
Skilled labour presence
Source: Buck Consultants International 2009
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Best quality for education and schooling (The Global Competitiveness report World Economic Forum 2012)
03-04 - 170160 Source: 2012
Ranking Primary education
Educational System
Math and Sciences
Management Schools
Belgium 2 6 2 1
Netherlands 14 10 9 10
Germany 36 17 48 36
France 28 34 15 5
UK 23 20 43 2
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Reading skills + best foreign language skills PISA assessment score 2011
9
09-07 - 030125
Source: Education at a glance, OECD Indicators 2011
508
506
497
496
494
519
Flanders
Netherlands
Belgium
Germany
France
UK
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Mathematics achievement score PISA assessment score 2011
10
09-07 - 030125
Source: Education at a glance, OECD Indicators 2011
526
515
513
497
492
537Flanders
Netherlands
Belgium
Germany
France
UK
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Science achievement score PISA assessment score 2011
11
09-07 - 030126
Source: OECD, aps.vlaanderen.be, 2011
522
520
514
507
498
526Flanders
Netherlands
Germany
UK
Belgium
France
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2012 Survey of Japanese companies (BJA)
93% of Japanese companies think that the level of technological education in Belgium meets the needs of their business.
100% of the Japanese companies believe that the level of management education in Belgium meets the need of their business
94% of the Japanese companies agree that the level of language skills meet the needs of their business
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High quality and availability of R&D The Global Competitiveness Report World Economic Forum 2012
03-04 - 170160 Source: 2012
Ranking Availability of latest
technology
Capacity for innovation
Quality of scientific research
institutions
Availability of scientists
and engineers
Belgium 8 14 5 13
Netherlands 6 10 8 17
Germany 20 3 10 41
France 11 8 15 11
UK 7 13 3 14
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Most popular study branches in Flanders 2011 - 2012
students seem to prefer to choose science and technology as a major University of Antwerp Biomedical sciences: +31% Commercial engineering: +28% KU Leuven Chemistry: +105,88% University of Ghent Chemistry: +35,71% ICT: +35,13% VUB Brussels Engineering: +14% UCL Limburg Commercial engineering: +30% Civil engineering: +20% Veterinary medicine: +34%
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000501
Toplocation for R&D
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Research: a proven track record of market-driven innovation
Over the last few decades our dense network of universities has been complemented by market-driven strategic research centers in selected fields
10-98 - 020616
1986 IMEC 1993 VITO 1996 VIB 2004 IBBT/i-minds
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Flanders: The 6 domains of expertise in ICT (6/6)
Software products
• LMS, Materialise, Inventive Designers, Real Dolmen, ACA-IT-solutions, Invenso, Produmex, Metris, Helios-IT, …
• Speech & Language Technology: Nuance,…
• Gaming: Larian Studios
• Agoria ISV (Independent Software Vendors-platform)
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Smart hubs
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Flanders’ Vision for the Future
000509
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Why ‘smart specialisation’ is important for Flanders
‘Flanders in Action’: strategic framework for a new growth path
Future project (starting 2006) of the Flemish government, supported by +100 stakeholder organisations (‘Pact 2020’),
Aiming at a ‘top 5 region’ position in Europe = transition towards an innovation driven growth model,
Consensus that STI investments should be focussed on ‘spearheads’: domains that can position Flanders in future value chains with important societal and economic impact.
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Focussing on 10 spearhead initiatives in 6 ‘clusters’
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SWOT Analysis of Flanders vs EU
EU Foresight Study with 15 key areas
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NEW INDUSTRIAL POLICY: an integrated framework
White Paper ‘New Industrial Policy (27 May 2011): Integrated policy platform for economic transformation
A new Productivity Offensive
• Increase knowledge productivity in clusters (critical mass and specialisation)
• Support ‘lead companies’ ‘lead markets’ and ‘lead clusters’
• Factory of the Future
Transformational Sectoral Policy
• Focus on transformation strategies based on value chains, clusters and grand projects
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Productivity &
Competitiveness
Policy
New Industrial
Policy
Infrastructures
Policy
Competences
& Labour Market
Policy
Industrial
Innovation Policy
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Advanced manufacturing
Advanced manufacturing:
- flexible tailor-made production
- specialized high added-value products
- first series before mass production
Belgium, at the crossroads of different cultures, offers the ideal test market for new products
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1. specialized high added-value products:
High end products in Ostend (Flanders) vs
low end production in Czech Republic
2. first series before mass production
The heating and airco systems can be tested in simulation for the climats in more than 30 countries ranging from – 25 degrees (Nordic countries) to + 60 degrees for heat waves and African countries
3. flexible tailor-made production:
Special systems for wine culture
Daikin
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Examples of authentification and smart card technology-applications
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Cartography: a Flemish tradition
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Examples of digital audio-video and digital printing applications
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Recent investments
Genzyme’s biomanufacturing plant extension (€46 mio)
Janssen’s new pilot plant in Geel (€130 mio)
Pfizer’s investments in Puurs and Zaventem (€61mio)
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R&D Incentives and Tax Features
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1. Patent income deduction
Deduction of 80% of the income from patents from the taxable basis, resulting in an effective tax rate of maximum 6,8% on this income
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2. Investment deduction
Investment deduction for R&D related inv. deduction of 15,5% on the investment
value (in one shot) OR 22,5% on the annual depreciation
(spread deduction)
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3. Exemption from withholding tax on the remunerations of researchers
•Principle: the salary withholding tax is normally retained on the remunerations paid to the researcher, but the amount of tax so retained must not be totally paid to the Revenue Collector (= extra financial means for the employer) 80 % exemption !
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IWT: Subsidies IWT wants to encourage companies in Flanders to innovate in various ways.
1.Subsidies: IWT has a wide range of subsidy programs in fundamental, basic and Applied research, where can make use of, as individual company, as partner of a research institute or in collaboration with other companies, universities, etc…
2.Funding: financing innovative projects of companies, research centres, organizations and individuals through assignments set by the Flemish Government.
INCENTIVE between 25% and 70%
of your project
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000505
Belgium has a very long tradition of international trade : Origin of Stock Exchange Bruges 14th century (1309)
Financial expertise and innovation
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1. United States 226,9
2. China 123,9
3. Belgium 89,1
4. Hong Kong 83,1
5. Brazil 66,7
6. Singapore 64,0
7. United Kingdom 53,9
8. British Virgin Islands 53,7
9. Russia 52,9
10. Australia 41,9
2012 FDI inflows (UNCTAD) in billions of dollars
03-04 - 170160
Ranking
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Belgium number 1 investor in the USA!
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Tax advantages: unique system
-Notional Intrest Deduction
-Ruling
-No withholding taxes on dividends
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ForeignCo
BelCo
Bank Loan
Capital injection 200
Loan 200 Interest 10
Interests received : 10
N.I.D. : -6 (200 x 3%)
Income : 4
Corp. tax = 4 X 33,99% = 1,35
Effective tax rate : 13,5%
1. Notional Interest Deduction
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Dividend withholding tax exemption
Parent company (treaty partner of
Belgium)
Belgian Subsidiary
• No WHT
• No LOB
• 10% shareholding
• 12 months
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Belgium Effective (Average) Corporate Tax Rate (ECTR) 2009*
Sources : Report 2009, made by ZEW (Centre for European Economic Research) for the EU Commission Project : Taxud/2008/CC/099, Mannheim and Oxford, October 2009
*(based on asset and source of finance) Especially in Belgium, the ECTR is considerably below statutory tax rates (-9,3%)
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Innovative tax benefits
TOP 1000 companies with highest profits pay an average of only
5,73 % taxes
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000501
The effective corporate tax rate in Belgium is one of the lowest in the EU! This is confirmed by the Institute of International and European Affairs!
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R&D practical example
Example
Manufacturing company with a R&D division:
Share capital: 100 000 (of which 20 000 = contributed patent value)
Return on equity: 12%
Net profit: 12 000 (of which 3 000 = patent income ; 9 000 = product revenue)
To deduct
Invest. ded. on patents: 15,5% x 20 000 = 3 100
Patent Income Ded.: 80% x 3 000 = 2 400
N.I.D. 3% x 100 000 = 3 000
Taxable basis: 3 500
Corporate Tax: (3 500 x 33,99%) = 1 190
Effective tax rate: 9%
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Office Renting Prices (Cushman & Wakefield) 2012/prices in €/m²/year (1st quarter 2012)
Frankfurt: 408
Amsterdam: 423,53
Paris: 580
London: 708,75
Brussels: 352,06
Antwerp: 179,12 Prague: 297.36
Sofia: 178,56
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GET THE BEST OUT OF EUROPE: CHOOSE FLANDERS AND
MAKE A MASTERPIECE OUT OF YOUR PROJECT