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This book deals with aspects of the national innovation system of Belgium. It is the result of a study jointly undertaken by teams of the University of Antwerp (RUCA) and the Free University of Brussels (ULB) in the context of the OECD­ DSTI Working Group on Innovation and Technology Policy, which brought to­ gether specialists from most of the OECD countries in an effort to streamline and co-ordinate research on national innovation systems. The 'systemic' approach - as opposed to the traditional 'linear causal' ap­ proach - has, in recent years, increasingly become the framework for the study of the complex relationships between R&D, innovation, the economic performance of firms and of the economy in which they operate, technological policy, and, fi­ nally, the institutional framework of the national economy, including its transna­ tional aspects. Obviously, the systemic approach did not fall out of the blue but has its roots in different schools of economic thought. The theoretical foundations of the national innovation system approach are therefore first discussed in Chapter 1. Chapters 2 and 3 introduce the reader to some peculiarities of the Belgian economy. Chapter 2 deals with the sources of Belgian prosperity, looked at from a long-term perspective and with particular attention being given to the small-open-economy characteristics of Belgium.



Introduction and Institutional Setting


Chapter 1. The Theoretical Foundations of the National Innovation Systems Approach

The concept of ‘national innovation systems’ (NIS) as used by professional economists is fairly recent. According to Edquist (1997) the term made its first appearance in the literature on the relations between technology, innovation, and economic performance in a book published in 1987 by Chris Freeman on the subject of technology policy and economic performance in Japan (Freeman, 1987),
Wim Meeusen

Chapter 2. The Sources of Belgian Prosperity

As pointed out by Edquist (1997), adopting an historical perspective is natural in an analysis of national systems of innovation. ‘To have an historical perspective is not only an advantage when studying processes of innovation, but also necessary if we are to understand them…. History matters very much in processes of innovation as they are often path dependent: small events are reinforced and become crucially important through positive feedback’ (Edquist, 1997, p.19). In his retrospective of a survey of some national innovation systems, Nelson (1993) was struck by the institutional continuity in countries with long histories, with many institutions in France, Britain, Germany, and Japan having been in existence for more than a century. In these countries, the behaviour of actors has been ‘shaped by a shared historical experience and culture’. Although Belgium changed into a federal state mainly because of major cultural differences, the regions and communities remain linked by strong historical and cultural factors and will certainly so remain for a long time.
Henri Capron

Chapter 3. The Institutional Profile

If the present-day institutional profile of the Belgian innovation system can be characterised in one word, ‘complexity’ seems — as the reader who manages to struggle through this chapter will probably agree — the most obvious candidate1. However, this chapter is essential if one wants to understand the specific situation of a country like Belgium that, in a period of internationalisation and European integration, initiated a far-reaching process of regionalisation. This process has probably yet not reached its final conclusion. The major transformation with regard to science, technology and innovation occurred during the various state reforms initiated since 1980. They remodelled Belgium from a unitary national state to a federal state with a high degree of autonomy and a large number of competencies having been transferred to the regions and the ‘communities’.
Henri Capron, Michele Cincera, Michel Dumont

The Inputs in the National Innovation System


4. R&D Expenditures and the National Innovation System

The conduct of science and technology policy differs radically in small countries from what occurs in large ones. Johnson (1988, p. 297) rightly pointed out that “the need for an institutional system is relatively strong for small countries. The possible benefits of such a system are considerable, and so are the potential costs of institutional rigidity”. He added that the coherence and the consensus-generating capacity of the institutional system are vital elements for its efficiency. As implied in the previous chapter, there is at least the suspicion that the Belgian innovation system has problems more with the volatility of its institutional setting rather than with its rigidity. High volatility leads to high uncertainty and adverse effects on the propensity to invest in technology.
Henri Capron, Michele Cincera

Chapter 5. R&D Activities at the Firm Level

It is often said that the relatively weak performance of the Belgian economy in terms of innovativeness is due in part to the comparatively small average size of its firms and the scarcity of home-based multinational corporations. The question whether firm size is related to R&D intensity is, therefore, of particular importance for a country like Belgium. This section describes some aspects of the orientation of R&D activities of Belgian firms beginning with the distribution of the R&D activities of firms in several components: research versus development, process versus product innovation, and capital- versus labour-intensive R&D (Section 5.2). The Schumpeterian hypothesis concerning firm size and innovativeness is examined in Section 5.3. This section also includes a first analysis of the relationship between firm size and innovativity, as measured by the percentage of ‘new products’ in total sales. We conclude in Section 5.4.
Klaus Vandewalle

Chapter 6. The National Innovation System and its International Linkages

Because of its size, its geographical location, and its openness, the Belgian innovation system interacts intensely with foreign countries. The influence of foreign innovation systems on Belgium technological and economic performance is shown both by the impressive number of R&D co-operation links between Belgian and foreign firms, and by the substantial share of foreign-based firms in the Belgian production capacity and knowledge base. Patel and Pavitt (1991), for instance, estimate that about 40% of the technological activity in Belgium comes from large non-Belgian firms. This ratio is one of the highest of the industrialised countries.
Henri Capron, Michele Cincera, Bruno Pottelsberghe van Potellsberghe de la Potterie

Chapter 7. The Network of Joint Research Projects and Alliances

In this chapter, we will present results of a graph-theoretical analysis of the Belgian network of research co-operation and research agreements as it is operationalised in the projects falling under the general heading of the R&D Framework programmes of the EU, the projects of the EUREKA initiative, and finally the private agreements and other forms of co-operation registered in the MERIT/CATI database.
Michel Dumont, Wim Meeusen

The Outputs of the National Innovation System and Conclusion


Chapter 8. Technological Performance

Research and development expenditure is the most commonly used indicator to gauge the technological position of countries. However, there are large differences between countries in their allocation of R&D expenditure. Some countries devote more effort to fundamental research while others are more oriented to applied research and experimental development. Moreover, R&D expenditure is an input measure. Thus, it is important to know how to measure the outcome of inventive activity. In other words, efforts in the field of R&D are only important as far as they yield results in terms of innovation. Indeed, this contention should be taken to its logical conclusion. Innovation is only important insofar as it leads to tangible results with respect to what is really economically and socially important: a high per capita income and its fair distribution and, therefore, good performance in terms of economic growth and, especially for a small, open economy like Belgium, international competitiveness. We will deal with the last element in the next chapter.
Henri Capron, Michele Cincera

Chapter 9. Technological Performance and Performance in International Trade

In the previous chapter, we examined the technological performance of Belgium in the strict sense. But technological performance of a nation is, of course, not a goal in itself. A strong technological position should be instrumental in terms of higher rates of economic growth, welfare, etc. Indeed, the performance of countries is measured in the first place by very basic economic indicators like the level and evolution of per capita income, the relative inequality of the distribution of income, the unemployment rate, and the degree of indebtedness to the rest of the world. For very open economies like Belgium, one of the main determinants of these basic variables is its share in world trade and the evolution of that share. As it happens, the Belgian market share in OECD exports of manufactured goods, although still high relative to the size of the country, has shown a marked decline since the beginning of the 1970s: from about 6.0% in the early 1970s to about 5.5% in the early 1990s (see Figure 9.1). This is a drop of more than 8% in relative terms.
Wim Meeusen, Glenn Rayp

Chapter 10. Conclusions

This book has a linear structure even though it focuses on the systemic as opposed to the classical approach of the relations between science, technology, R&D, innovation, and economic performance. After a review of the theoretical aspects of the systemic approach, the historical background of the Belgian economic structure was discussed. We then studied the institutional setting, continued with the ‘inputs’ in the technological system, and concluded with an examination of the identifiable technological ‘outputs’. We will structure this concluding chapter accordingly and look in turn at the historical background and institutional setting (Section 10.1), the NIS inputs (10.2), co-operation and diffusion aspects (10.3), and the NIS outputs (10.4). In Section 10.5 we draw conclusions with respect to technological policy. Section 10.6 asks ‘What next?’
Henri Capron, Wim Meeusen


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