Minister-President of the Flemish Government and Flemish Minister for Economy, Foreign Policy, Agriculture and Rural Policy

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1 Policy Paper ECONOMY The open entrepreneur Kris Peeters Minister-President of the Flemish Government and Flemish Minister for Economy, Foreign Policy, Agriculture and Rural Policy Design: Department of the Services for the General Government Policy, Communication Division November 2009 Flemish authorities

2 Executive summary Due to economic globalisation and the ever growing turbulence in the economic environment, we will focus the economic policy for in the first place on the sustainable transformation of the Flemish economic fabric. The aim of this sustainable transformation is to ensure that a lot more small and large Flemish companies open themselves to innovations, are willing to learn and are able to easily adapt to the constantly changing circumstances on local and especially on international markets. Flanders therefore needs open entrepreneurs : entrepreneurs that are open to the possibilities of sustainable economic growth, the green economy, innovation and internationalisation. For this purpose we want to place strong emphasis on new spearhead domains, including the green economy, the white economy and smart logistics, but also on the need for SMEs whose activities extend beyond our national boundaries. We will raise international awareness in our entrepreneurs and foster the ambition to become top players on a global scale in certain niches. In order to achieve this we will focus on essential elements such as sense of enterprise, labour market, taxation, a decent infrastructure as medium, innovation which is open to future opportunities, and sustainability and greening. In this, we will focus our efforts and make sure, through permanent evaluation, that optimal use is made of available resources and instruments. 2 However, we must initiate this policy in extremely difficult circumstances as a result of the financial-economic crisis. The consequences of the crisis threaten to seriously affect the Flemish economic fabric and drag along healthy companies as well. That is why we will remain on the alert by taking appropriate measures. Strategic objectives In order to realise the sustainable transformation of Flemish economy we will concentrate on a limited number of strategic objectives. These objectives outline the essential building blocks of the new economy in Flanders which is much more oriented towards innovation. To achieve these different strategic objectives we will also measure ourselves with the major world players so as to learn from the policy options they are taking and which have proved successful. This will allow us to constantly evaluate and adjust the strategic objectives we have set ourselves, if necessary. In order to detect these good practices, we will make the best possible use of our international network of economic representatives. The outcomes of these exercises will also be checked within the framework of Flanders in Action and be discussed with the social partners within VESOC (Flemish Economic and Social Consultative Committee). More generally speaking, the SERV (Flanders Social and Economic Council) will be frequently involved in the design and evaluation of policy in its capacity of strategic advisory council. In this way, the economic and entrepreneurship policy in this changing and turbulent global environment will be a policy which is constantly learning and innovating itself. We must without any delay also take targeted measures to combat and turn the economic crisis in order to help healthy businesses through the economic crisis.

3 Strategic objective 1: to help businesses through the crisis We want to help healthy businesses through the crisis because they can provide the sustainable jobs of the future. That is why the economic policy must in the short term enable these businesses to cope with the acute consequences of the crisis. The biggest challenges we are faced with during this credit crunch are to save jobs and to allow businesses to maintain their normal pace of investment. In this crisis it is therefore of the utmost importance to devote attention to entrepreneurs in difficulty and to actively support them. Our companies, especially SMEs, must come out of this crisis stronger, which means they must be more dynamic, and more knowledge-oriented, in other words, ready for the globalised competition. The creation of new jobs and the competitiveness of our economy depend on this. Strategic objective 2: to enhance and strengthen entrepreneurship We want to make sure that a sufficient number of people set up their own business and that there are many high quality start-up companies in Flanders. For this reason we will introduce measures to promote an entrepreneurial culture and to create a favourable entrepreneurial climate for all the businesses. We will also provide sufficient space for start-up companies and companies seeking to expand or relocate. Strategic objective 3: to green the economy 3 Eco-efficient materials, products, services and energy production reduce the environmental pressure, but may also foster the creation of many green jobs and strengthen our companies competitive position. Apart from that, knowledge development and innovation in this field may offer our economy fresh opportunities. Therefore, we will fully focus on the instruments that can turn the Flemish economy into a green economy. Strategic objective 4: to support growing enterprises Our aim is to make sure that successful companies in Flanders can develop rapidly into international businesses that continue to be open to innovation. To this end we will develop, among other things, the Gazellensprong (gazelle leap), a policy which is specifically aimed at providing support to fast-growing companies. Strategic objective 5: to make the economy more innovative and knowledge-intensive We intend to give new promising activities within the Flemish economy the chance to develop more efficiently and safeguard the competitiveness of traditionally strong sectors by continuing to foster innovations in these sectors as well. Innovation should become a priority for as many companies as possible. For this reason we will fully focus on marketing innovations and disseminating knowledge and in this way respond to initiatives that are taken by the Minister responsible for innovation and science policy.

4 The leverages of economic policy In order to meet these strategic objectives, we will work on the three leverages of economic policy. After all, we are to conduct a policy which is adapted to a company s life cycles, focus on the success factors which promote enhanced and reinforced entrepreneurship and make sure that a framework is available in Flanders which facilitates enterprise. Leverage 1: a comprehensive approach to company life cycles 4 In order to effect the sustainable transformation of Flemish economy, we will pursue a policy that is tailored to company life cycles. We will provide the proper incentives and support instruments for each life cycle. This also means that we will be implementing a policy which is entirely oriented towards the SME core of our economic fabric. Firstly, we must continue to raise awareness so as to create a general positive attitude towards entrepreneurship. In order to achieve high-quality start-up companies we will also have to invest in the training and assistance of prestart-up companies. To provide actual support to start-up companies a specific policy will need to be designed for them and we will have to examine whether aid measures are required that can effectively support these companies in the first fragile years. Fast-growing companies on the other hand require an approach and instruments which foster their growth and facilitate their transition to the international market. In addition we will design a policy which is aimed at promoting the business continuity of existing companies by encouraging generational transfer or take-over and keeping it on the right track. In other words, we aim to draw up an economic policy which duly caters for the needs of enterprises, irrespective of the life cycle they are currently in. Leverage 2: focussing on crucial success factors For us to be able to give the proper support and incentives to companies, irrespective of their current life cycle, we will invest in the most important factors which make a company more successful. We first of all need to encourage entrepreneurial talent by providing (potential) entrepreneurs with the proper training and guidance. In addition, a climate must be created which allows new knowledge and innovations to emerge as well as gives them the opportunity to quickly find their way to the market and become embedded in other companies. An efficient system of knowledge dissemination will therefore play a crucial role in the transformation of the Flemish economy. Indeed, although Flanders strongly invests in the development of expertise and innovation, many of these innovations are hardly ever, or in the worst case never, introduced in other businesses. A lot of SMEs indeed do not have the necessary means to keep abreast of these innovations. For this reason we will foster the efficient dissemination of knowledge about innovations to a broader target group of enterprises. Together with the Minister who is in charge of innovation and science policy we will work on a policy for the marketing of innovations and the dissemination of knowledge by knowledge centres. Because we find that there is still a lack of venture capital, we will also establish a framework which will keep promoting business investments through proper access to capital. In addition, we intend to facilitate the granting of credit by financial institutions. It will also be of vital importance to provide sufficient space for start-up and growing companies in Flanders, including retail businesses. To this end we will pursue a policy which is aimed at providing sufficient space for economic activities in line with Flanders economic ambitions,

5 increasing the productivity in the development process of corporate housing and ensuring a sustainable use of the space, focussing on redevelopment and brownfield sites. Leverage 3: creating a framework which promotes entrepreneurship Apart from these vital success factors which we have to focus on in order to facilitate the transformation of the Flemish economy, we must also pay attention to aspects of the wider environment that may support enterprise in Flanders. We will for instance continue on the path towards administrative simplification and examine, together with the Minister responsible for administrative affairs, how we can further reduce the administrative burdens for enterprises in Flanders. To this end we will also try to achieve a better alignment between and within the different levels of competence. An efficient and effective government should after all not remain a mere written slogan. Optimal use is to be made of our scarce resources on the basis of a good coordination between all the actors in the field. This should be done by avoiding complex and overlapping measures for aid and by keeping the measures transparent for those who apply them. With an innovating sector-based policy we will shape the complementary economic policy, in dialogue with the stakeholders, which is to accelerate the valorisation of new spearhead domains in the fields of employment and international enterprise. This is outlined in the diagram below. Leverages of economic policy Strategic objectives Comprehensive approach to company life cycle Crucial success factors Framework which promotes entrepreneurship 5 Helping businesses through the crisis Pre-start-up companies Entrepreneurial talent Administrative simplification More corporate investments Increased and reinforced entrepreneurship Greener economy Start-up companies Fast-growing companies Generational transfer and take-over Dissemination of knowledge Space for enterprise Access to capital Coordination between the different levels of competence Innovative sector-based policy More growing companies More innovative and knowledge-intensive economy

6 Flanders in Action as long-term perspective This economic policy and the realisation of the aforementioned strategic objectives form the concrete implementation of essential points of action of the ViA breakthrough open entrepreneur. This will be done in view of the long-term objectives of the Pact 2020 (which was signed by the Government, the social partners, the associations and the public administration). Only in this way will we be able to take the necessary vital steps during this term of office to achieve these goals: By 2020 Flanders is to create a strong entrepreneurial culture, promote entrepreneurship and enhance its appreciation to a considerable extent, as well as increase the number of enterprises in the Flemish Region. This will allow us to score as well as the top five of the European regions. Young start-up companies are to be encouraged so as to increase the rate of establishment. Entrepreneurship among women, immigrants and older people is to reach a level which is proportional to their number in society. In 2020 there should be an increasing number of existing enterprises that grow. Flanders will have to make major planning efforts to be able to meet the long-term demand for industrial sites. The space needed for this will be defined scientifically within the framework of the Spatial Structure Plan for Flanders 2020 (RSV-2020). An economic activation policy and the philosophy of building a reserve of industrial sites should increase the number of industrial sites that can actually be used by 2020 to at least 95% of the total number of designated industrial sites. 6

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