23 September 2022

Every year, the Department of Economy, Science and Innovation (EWI) publishes the Flanders 2022 Guide to R&D. This publication gives you an overview of Flemish government budgets for both economic and science and innovation policy.  

What can you find in the publication?  

Flanders 2022 Guide to R&D aims at policy monitoring: in this document, the appropriations from the Flemish budget related to the support of economic, science and innovation policy in the broad sense are analysed in an integrated way. In 2022, 4,446 million euros were made available for this purpose. 

Several institutions are collaborating on this, including:  

  • The policy domain Economy, Science and Innovation (EWI)  
  • The Education and Training (O&V) policy domain  
  • The eight other policy domains of the Flemish government  

To then divide the available budget among different types of resources:  

  • The resources for economic policy (policy domain EWI): 467.6 million euros  
  • The resources for science and innovation policy from the EWI and R&I policy domain: 3.978 billion euros 
  • Resources for science policy from the eight other policy domains: 157 million euros 

The total in commitment appropriations registered in the 2022 budget for all areas of competence of the Flemish government is rounded to 52 billion euros.  

Below, we take a closer look at spending related to Research & Development, and Innovation. Finally, we also take a look at the progress of the Flemish Recovery Plan ‘Flemish Resilience’.  

Belgian target for Research & Development  

Belgium targets the European 3% standard for research and development spending. The assumption is that 2% is realised by the private sector and 1% by the public sector.   

In Belgium, competence for R&D and innovation is divided between different policy levels.  

  • The communities and regions are responsible for direct R&D support   
  • The federal government for indirect R&D support  

The regions grant a lot of direct support in the form of subsidies for research, technological development and promotion of innovation.   

The communities are responsible for education and grant direct support in the form of funding for higher education.   

For its part, the federal government encourages corporate investment in research and development mainly through fiscal measures, such as:  

  • Exemption from withholding tax on the wages of certain target groups (e.g. researchers)  
  • Tax deduction for investments in R&D  
  • Tax credit for R&D  
  • Tax deduction of income from patents.   

In 2019/2020, the tax support measures have a budgetary impact of €3.3 billion.   

In order of budgetary size for tax year 2019, the federal tax breaks consist of: 

 

The patent deduction was recently abolished and replaced by the innovation deduction, from 1 July 2016. The innovation deduction is valid not only for income from a patent, but also for income from copyrighted software, plant breeders’ rights, orphan drugs and data and market exclusivity.  

‘Flemish Resilience’ recovery plan  

In 2020, the Flemish government proposed to release 4.3 billion euros for its recovery plan. That plan should help strengthen Flemish prosperity and well-being after corona.   

The recovery plan rests on seven spearheads:   

  • Making economy and society more sustainable   
  • Investing in infrastructure   
  • Digitally transforming Flanders   
  • Investing in people and talents   
  • Strengthening the Flemish care and welfare system   
  • Managing the corona crisis and Brexit   
  • Making government more efficient  

The 4.3 billion euros in funds were divided into:  

  • 158 projects with an underlying reliance budget;  
  • Bundled into 34 larger logical clusters;  
  • With 22 projects without funds from the Flemish relance provision, bundled in the 35th cluster  

The Flemish Recovery Plan is thus based on three categories of projects:   

  • Projects with funds from the Flemish Resilience Provision that will be contributed to the ‘National Plan for Recovery and Resilience’ and thus will be financed with European funds (allocated to Belgium)  
  • Projects with resources from Flemish Resilience that are not contributed to the ‘National Plan for Recovery and Resilience’ and will therefore be financed through Flemish debt creation  
  • Projects that do not call on Flemish Resilience and are financed with the regular budget resources. 

 A total of 511 million euros of funds from the Flemish Resilience of 4.3 billion euros supplemented by 50 million euros of Brexim funds and by 70 million Flemish ESR-8 capital investment funds for imec.   

Together, therefore, 631 million euros.  

Flemish EWI Resilience projects funded with European resources  

Flemish EWI Resilience projects not contributed to the National Plan for Recovery and Resilience and thus Flemish funded  

Flanders’ R&D public expenditure  

The Innovation Pact  

In 2003, Flanders concluded the Innovation Pact as a result of the 2002 Barcelona European summit. What exactly does this mean?  

The target is to increase R&D spending in the EU to 3% of GDP (gross domestic product);  

  • With one-third of R&D spending funded by government;   
  • And two-thirds by industry.  

By 2021, Flanders will account for almost 60% of direct R&D support.  

The Flemish innovation landscape addresses this commitment by tracking GDP by implementation sector. Thus, spending is analysed by location of activity:  

  • Companies and research centres  
  • Governments  
  • Higher education  
  • Non-profit institutions  

In addition, the funding of R&D expenditure is also taken into account – is it private or public? Here, the origin of the funds is considered, regardless of the sector where the research is carried out. Under the Innovation Pact:  

  • Private sector aims to fund 2% GDP of R&D spending  
  • The public sector (governments) aims to fund 1% of R&D spending  

All this translates into ‘R&D’ intensity: one of the most widely used indicators to reflect a region’s R&D activity. This is the percentage of a region’s GDPPR (gross domestic product) spent on R&D.  

By 2020, Flanders will rank first within Europe in terms of R&D intensity.  

FI Group has 20 years of experience and wants to support you in understanding and exploiting available R&D+I opportunities. Our experts are at your disposal to analyse your project and take the next steps with you. 

Yvette Poumpalova 

× How can I help you?