VARIO-colloquium 2024
VARIO presented its advisory report on productivity growth on November 7. Productivity growth has been declining in Flanders for two decades, more so than in comparable economies.
At the VARIO colloquium, speakers, panelists, and business testimonials discussed productivity growth in relation to innovation: What is productivity, and how can it be measured? And through which policy interventions can innovation be leveraged to enhance efficiency and, consequently, productivity?
What is productivity
In this 'explainer' video, Prof. Luc Hens provides an introduction to productivity.
Productivity measures how efficiently we produce goods or services. It’s about how much we can make with a given amount of resources, such as labour, capital, land, and raw materials.
Flanders ranks among the regions with the highest productivity internationally. To further increase prosperity, improvements must primarily come from higher productivity.
The video addresses the various definitions, Flanders' performance, and the current challenges.
Chief of Cabinet Simon Gheysen and VARIO Chairman Lieven Danneels discussed the Flemish Coalition Agreement and the new VARIO advisory report in a joint interview.
On behalf of Minister-President Matthias Diependaele, the Chief of Cabinet announced a dialogue with all stakeholders to shape a Flemish productivity agenda and reverse the trend of stagnating productivity growth.
The VARIO advisory report calls for a more thorough study of Flanders' productivity performance, a sharpened R&D&I policy, and for a transverse innovation policy.
Productivity & Market Power: Challenges & Opportunities
In his presentation, Prof. Jan De Loecker highlighted how market power and externalities are a challenge in our economy. Competition must come first, and that requires smart policy interventions aimed at opening markets to international competition and at removing barriers to labour, including foreign labour.
Testimonial: Spin-off BIO INX
BIO INX develops bio-inks, materials that enable the 3D printing of cellular tissues. In their testimonial, they elaborated on their transition from university to company, their technological and societal potential, the importance of collaboration, and their path to further growth.
Start-ups and scale-ups are crucial drivers of long-term productivity growth.
The drivers of this engine of prosperity
Caroline Ven first discussed the history of productivity. She emphasized the importance of science and innovation, STEM skills, and both public and private investments as essential conditions for achieving high productivity growth.
She advocated open value chains, where entrepreneurial dynamism (creative destruction) and a smart approach to state aid and market power are paramount.
Boosting productivity through new technologies and innovation: Evidence and policy options
Dr. Filiz Unsal identified significant room for improvement in Belgium in terms of product market regulation, which requires structural reforms to enhance competition. She also highlighted the importance of facilitating labour mobility to achieve a better match between employee and company.
Testimonial: Alcon
This testimonial explains how Alcon, since becoming an independent company in 2019, has embarked on a large-scale automation initiative and leveraged innovation projects to achieve further productivity growth.
Panel discussion
Mark Andries, Administrator-General of VLAIO, talked about the recently introduced possibility to use productivity growth as an eligibility criterion for VLAIO R&D projects, where they mainly look for companies eager to leverage their own innovations to boost their productivity. The aim is to encourage less technological sectors, such as the building and construction industry, to find their way to VLAIO more easily.
Prof. Luc Soete, Maastricht University, spoke about the choice between continuing to focus on frontier companies, where productivity is already very high, or focussing more on catching up of laggards. He also addressed the objective outlined in the Flemish Coalition Agreement to aim for 5% of GDP for R&D expenditure. This is an illustration of the continued priority that successive Flemish governments make of R&D, which is undoubtedly a positive thing.
Lieven Danneels emphasized the importance of ensuring a sufficiently large public share of R&D expenditure, as this delivers the greatest societal returns.
Caroline Ven addressed the challenges around knowledge diffusion, particularly in areas such as AI, and the need for talent to achieve our innovation goals.
Testimonial: GEOxyz
GEOxyz has become a major player in maritime measurements. Through the use of unmanned vessels and automatic data processing, the company strives for productivity gains. To this end, internal innovation projects are set up. The resulting global scaling up is thereby accelerated even further.
Wrap-up Danielle Raspoet
In her wrap-up, VARIO Director Danielle Raspoet summarized the key messages. She noted that it is reassuring to see how closely the policy recommendations discussed align with those in VARIO’s advisory report.
Related advices
VARIO Advisory report 37: Towards higher productivity growth
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