European R&D Strategy: impact and feasibility study for Belgium [ Working Paper 03-05 - 14/03/2005]

The nemesis simulation allows to quantify the positive impact of the intensification in r&d efforts under the conditions of the Barcelona objective. At the macroeconomic level, it demonstrates an important positive impact on long-term economic growth, foreign trade and employment, as well as on productivity for every European country. However, at the sectoral level, structural changes occur and some sectors end up as net losers from this European common strategy.

The accounting exercise based on economic forecasts reveals that the 3% objective seems feasible in Belgium. The results show that the current efforts in r&d investment have to be at least maintained and at best intensified up to 2010. Indeed, the necessary annual average growth rates in r&d expenditure and in demand for r&d personnel are slightly higher than those recorded between 1993 and 2001, but equivalent to those of the last few years. Furthermore, the trends observed in the supply of human resources do not seem to be problematic.

However, the analysis is less positive at the regional level. Recently, the Walloon and Flemish regions have individually adopted the 3% objective. The regional estimates indicate that this target seems to be more difficult to reach for the Brussels-Capital Region. As a consequence, it is of major concern that the regional and federal authorities plan their future efforts in close consultation, in order to achieve the Barcelona objective at the national level.