Work program 2025

Complementary to foreign knowledge-intensive investments (see Advisory Report 28), we should continue to focus on ambitious companies with control in Flanders that have the potential to grow into international 'flagships' in the longer term. For this advice, we started from Joseph Schumpeter's paradigm of creative destruction, which puts the dynamic ambitious entrepreneur at the centre to creating economic and social added value. We refer a.o. to the book by Philippe Aghion and colleagues (2021) 'The power of creative destruction', which formed the basis for this advice. The advisory process is therefore strongly linked to the recent paper by Mario Draghi on the future of European competitiveness.

New dynamics are at work in our society, where commercialisation and financial profitability, on the one hand, and social and ecological objectives, on the other, have seemingly come into conflict. In this advisory report, VARIO maps out the business forms for Flanders. Business forms for entrepreneurs pursuing social impact are underused today because they are less well known. Specifically, we think of steward-owned enterprises and cooperatives. Moreover, much more can also be shaped in the private limited company than is standard today. In addition, our research also shows that impact companies in general face a number of difficulties, mostly in terms of financing.

The Committee on Social Affairs, Employment and Pensions of the Federal Chamber of Deputies is currently discussing a draft resolution for a proactive policy and coherent strategy on the use of algorithms, data and artificial intelligence in the workplace. In response, VARIO, along with some other organisations, was asked for advice on this text

VARIO examined the volatile situation for researchers in the US, possibly resulting in a brain drain, and the possible implications for the Flemish R&D&I system. This is being addressed at the European level and things are also moving in several EU member states. VARIO wants to bring this issue to the attention of the Flemish Government and looks at how Flanders can respond strategically to the volatile situation for researchers in the US: what are the possible risks and opportunities, and how can Flanders differentiate itself from initiatives of other member states and regions within Europe to attract international top talent. To this end, VARIO used its previous advisory reports on knowledge migration (i.e. Advisory report 1, Advisory Report 25 and Advisory Report 39) and current information from Flemish stakeholders and the network of European STI Councils.

Improvements in productivity in the long term mainly arise through technological changes. This requires a combination of disruptive and incremental R&D&I efforts. Disruptive innovations cause a shift in the technological paradigm and business routines by creating new products that replace existing ones. Incremental innovations strengthen existing technologies and business routines and their diffusion. Internationally, there is attention to the apparent increasing difficulty in achieving disruptive innovation.

In its advisory project, VARIO aims to investigate the trend around groundbreaking research in Flanders and the potential underlying factors. To this end, a data study is being carried out with new breakthrough research indicators to enable international benchmarking of Flanders. A qualitative study is also under way. Based on this, recommendations will be formulated.

The Flemish coalition agreement 2024-2029 contains information on focusing support on strategic sectors 'with high future potential and added value'. In the context of the Flemish Acceleration (see above), VARIO will be asked for advice on this. VARIO can draw on studies conducted by ECOOM in this regard.

VARIO aims to investigate how the R&D&I system can deliver more output. Despite the 3.5% GDP investment in R&D, Flanders is struggling with valorisation challenges of its knowledge-intensive ecosystem. To streamline the use of (public) financial R&D&I resources and instruments as a function of increasing productivity growth, bottlenecks along the innovation chain must be avoided. This relates to the systemic distribution of financial resources and instruments, but also to the associated modalities. In addition, understanding the distribution of resources among the ultimate beneficiaries, namely individual knowledge institutions or companies, can lead to more informed choices.

VARIO is preparing a background report with a TRL-based analysis of government support for R&D, as well as a background report with an analysis of the Flemish subsidy register on R&D spending.

The service economy plays a crucial role in overall economic productivity because of its sizeable share. This is an important observation, especially in the context of the Flemish Government's Productivity and Competitiveness Agenda, Flemish Acceleration. However, the tertiary sector in Belgium and Flanders is said to be characterised by lower average productivity and lagging innovation capacity.

Among other things, Belgium has relatively strict regulation within the services sector compared to other OECD countries. The services sector remains too closed due to lobbying. This hinders new entrants from entering the market, reducing competition (see, among others, Advisory Report 39). This also leads to less innovation, lower investment, slower productivity growth and higher prices. In the past, we have missed the train for E-commerce, for example, as a result. How can the innovation dynamics within the services sector be increased and what is the role of Artificial Intelligence in this? What policy levers are available, including for exporting our services? What role can government play through its own (public) service delivery and innovative procurement? Etc.

There is huge dynamism and potential in many low- and middle-income countries. For example, for economy, innovation and entrepreneurship, there are great opportunities in fast-growing countries on the continents of Africa, South America and Southeast Asia. VARIO will focus on sub-Saharan Africa, a region that still receives too little attention, but has the youngest and fastest-growing population and the greatest social needs. By focusing more on cooperation with fast-growing countries through innovation, we can strengthen both them and our own region. VARIO wants to elaborate in the advisory report how this can be done concretely. In its memorandum, among others, the council already referred to the Finnish Developing Markets Platform as an example. On the one hand, this is about solving global challenges through innovation, and on the other hand about giving Finnish companies access to international growth markets in times of limited growth of their own market. Here, R&D funding is complemented by resources for development cooperation. VARIO is also looking at the Impact Licensing Initiative for the advisory trajectory. Social impact licensing is a time-bound permission granted by a technology holder to bring an IP, a technology, a product or a service to a predetermined market on preferential terms for the creation of social value. Here, the win-win collaboration happens through economic valorisation and (frugal) innovation. For this advisory trajectory, both entrepreneurship and academic exchange and knowledge transfer are relevant because they are inextricably linked.

In 2021, the Flemish industrial climate transition program – Klimaatsprong – was launched and anchored in legislation. Klimaatsprong guides the transition to make the energy-intensive industry in Flanders carbon-circular and low in CO₂ emissions by 2050, without losing its competitiveness. This transition program is managed with a program note based on a roadmap to 2050. Every five years, a new program note is presented, including an evaluation of the previous note and an approach for the next five years. The current, second program note covers the period 2026–2030. For this program note, as with the first note, advice was requested from VARIO, as well as from SERV and the Mina council. VARIO responded to the request mainly from the perspective of innovation and entrepreneurship.

In July, VARIO received a request from Flemish Minister for the Environment Jo Brouns for advice on the draft policy note for the Flanders Spatial Policy Plan. In its recommendations, VARIO focused primarily on concerns relating to innovation. Spatial policy has a major impact on this, but this is not always given sufficient consideration. The advice was delivered in October.

VARIO is planning a study tour to the United Arab Emirates (UAE) in January 2026. The purpose of such visits is to draw lessons for Flanders from other innovation systems. What can we take away as inspiration for Flemish science, technology, and innovation (STI) policy? In the case of the UAE, attention will also be given to opportunities for Flemish knowledge institutions and companies . The study tour is being organised in collaboration with the local office of Flanders Investment and Trade (FIT).