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In the recent past, medium-term projections were given less attention than short-term analyses. However, things appear to have evolved and mid-term prospects seem to be enjoying a renewed interest. Since the outbreak of the financial crisis, many countries have been confronted with large imbalances in terms of high unemployment, unused production capacities or financial deficits. In the longer term, demographic changes, including population ageing, are likely to cause massive changes in the composition of GDP. Addressing these various challenges can only be considered in the context of medium- and long-term scenarios.
This working paper analyses the performances of the Walloon innovation system in 2010. It concentrates on the six dimensions of the innovation system: knowledge development, human resources, R&D valorisation, innovation absorption capacity, entrepreneurial skills and financing capacity. These pillars are assessed by comparing the Walloon performances with those of European countries and regions with a similar industrial heritage. The analysis underlines the good performances of the mobilisation of financial resources in favour of R&D activities but also a potential problem in terms of human resources available for these activities. Maintaining a sufficient flow of competence by new science graduates and engineers and by the implementation of lifelong learning remains the key challenge in the years to come.
2011
Date : 24/11/2011
A better understanding of productivity evolution requires a specially adapted statistical tool that allows an industry-based analysis of the fundamental trends of the economy. Therefore, the Federal Planning Bureau is working with other European institutions on a project, financed by the European Union’s sixth framework programme for research, to develop the EUKLEMS database.
The database EUKLEMS contains the variables for analysing the evolution of productivity at the industry-level from 1970 to 2007, for all European countries, Australia, Japan, Korea and the US. The last release of the database was realised in November 2009, for 32 industries. The available variables concern production, value added, intermediary consumption, employment and the skill level of the labour force, capital with a distinction between capital linked to information and communication technologies (ICT) or not. The growth contributions of both the different production factors and total factor productivity are also available. An update was carried out in March 2011; it provides a 72-industry breakdown of variables published in November 2009, for most countries.
This Working Paper deals with the estimation of direct, inter-industry domestic and international R&D stocks for 25 Belgian industries over the period 1995-2007. Two categories of stocks are constructed to estimate potential rent spillovers and knowledge spillovers. Domestic inter-industry and foreign R&D stocks are weighted with Supply and Use tables and bilateral trade data to estimate rent spillovers (through intermediate consumption) and with international patent citations matrices to estimate knowledge spillovers.
In this Working Paper the growth in industry-level total factor productivity, i.e. the part of output growth that cannot be accounted for by growth in the production factors, is decomposed using Belgian firm-level data for the period 2000-2008. Decomposition permits to assess to what extent productivity growth in a given industry results from changes in firm-level productivity, from reallocation of market shares between existing firms or from firm entry and exit.
In this Working Paper the impact of potential determinants of total factor productivity, i.e. the part of output that cannot be explained by the quantity of production factors, is estimated for Belgium using industry-level data for the period 1988-2007.
Offshoring is generally believed to be productivity-enhancing and this belief is underpinned by economic theory. This article contributes to the growing literature that tests empirically whether offshoring does indeed help to improve productivity. Estimating the impact of materials and business services offshoring on productivity growth with industry-level data for Belgium over the period 1995-2004, we investigate this issue separately for manufacturing and market services. The results show that there is no productivity effect of materials offshoring, while business services offshoring leads to productivity gains especially in manufacturing. In addition, we look at the possibility of rent spillovers from offshoring. Productivity gains from offshoring in one industry may feed through to other industries that purchase its output for intermediate use if, due to offshoring, the user value exceeds the price of the output. The lack of evidence of such rent spillovers from either materials or business services offshoring in the data leads us to conclude that firms manage to internalise all efficiency gains from offshoring.
In this working paper the evolution of expenditures for research and development (R&D) in Belgium, in the period 1995-2007, is compared to the evolution in ten other EU countries. R&D expenditures by companies established in Belgium evolved quite favourably up to 2001 but subsequently not only did R&D intensity in Belgium decrease but the position relative to other countries deteriorated as well. This evolution seems to be due mainly to a decline in the share of a significant number of industries in Belgium in the overall R&D expenditures of the group of countries considered, and less the result of the type of industries in which Belgian companies have specialized.
For a better comprehension of the weak labour productivity growth in Belgium over the period 1996-2007, this Working Paper offers for both Belgium and its three neighbours an analysis of productivity levels and, subsequently, a decomposition of productivity growth using the growth accounting methodology for the main market economy industries. This decomposition allows to underline the relatively important contribution of capital deepening in production in the majority of manufacturing and market services industries.
This capital deepening per hour worked is mainly a quantitative increase in the manufacturing industry and a qualitative increase (investment composition effect) in the market services. Simultaneously, the decomposition of labour productivity growth also allows to underline the relative weakness of total factor productivity growth, i.e. the efficient use of the combination of production factors, in the majority of Belgian market economy industries.
The aim of this paper is to describe product market competition in the Belgian economy for the period 1997-2004 and to illustrate some causality with market regulation. The analysis is held at the industry level, for selected manufacturing and services industries. Emphasis is given to the profit elasticity (PE) measurement of competition (the “Boone” indicator) and the average profitability (AP) indicator (an approximation of the mark-up indicator). We applied the OECD Regimpact indicator as a proxy for regulation. We present some stylized facts, for Belgium in comparison with selected EU countries; and through an econometric exercise we illustrate the potential of regulation as an explanatory variable for competition.
This paper investigates graphically and econometrically the relationship between the relative positions, in terms of value added and relative prices, of Belgian manufacturing and market services in the European Union over 1970-2005. Relative prices are then decomposed into relative unit costs of factors of production. The analysis goes further by replacing relative unit labour cost with relative hourly wages and relative productivity. Finally, relative produc-tivity is replaced with relative capital deepening, relative labour composition effect and relative total factor productivity. All data are coming from the EUKLEMS database, March 2008 release.
The Working Paper analyses the performances of the Walloon innovation system in 2008. This analysis concentrates on the six dimensions of the innovation system: knowledge development, human resources, R&D exploitation, innovation absorption capacity, entrepreneurial skills and financing capacity. These foundations are evaluated by comparing the performances of the Walloon innovation system with the performances of innovation systems of other countries and regions in Europe. They were chosen for their socio-economic proximity to the Walloon region. The examination of the Walloon innovation system reveals a problem that is essentially connected with the capacity to turn research and innovation efforts into economic results that are sufficient for the Region.
The objective of the report is to provide an overview of the main drivers of economic growth and the productivity evolution in Belgium, in comparison with the EU and the US, between 1970 and 2005, based on a consistent data set. The growth accounting methodology is applied to explain value added and labour productivity growth for the total economy, manufacturing and market services. This decomposition exercise diverges from what has been applied in Belgium up to now, as it uses capital services flows rather than the capital stock and labour services flows rather than the number of hours worked to measure the contribution of these factors of production to economic and productivity growth. Contributions of the main industries to value added, employment and productivity growth are also estimated.
Using dynamic panel data on 20 Belgian market sectors over 1987-2005, the paper analyses the link between Multifactor Productivity (MFP) growth and three frequently cited determinants: business R&D, labour skills and ICT use. The theoretical framework of the analysis is given by the Aghion-Howitt model which explains the rate of MFP growth by the distance to the world technology frontier.
