Countering economic slowdown through an increased focus on the Industry 4.0 strategy
"2018 was a good year for the Flemish manufacturing industry. Our companies succeeded in realising growth again. According to Agoria, the industry also created a few thousand extra jobs. Still, we notice that the overall economic growth is starting to slow down, a phenomenon that is expected to continue in 2019. The growth prospects for Europe have already been downgraded by the European Central Bank. In 2019, a 1% growth is expected for the whole of Europe and this figure has also been forecasted for Belgium by our National Bank. We also see a number of risk factors announcing instability starting to emerge at the same time. Think, among others, of the Brexit but also the trade wars between the United States and China, for instance, play a role here. In addition, there is still the threat of high American import duties on European cars.
Because China and the United States are major export markets for the German and thus also for the Flemish manufacturing industry, this will not remain without consequences for our region. Every slowdown in the global economy has repercussions in Flanders.
Cost competitiveness, lower labour cost and focus on innovation
As from 2019, we will thus be pedalling with a little less tailwind. This implies that, more than over the past few years, the good news will have to come from the companies themselves. An important element in this regard remains their cost competitiveness. In Flanders, the wage cost but also the energy costs play a crucial part in this. At the same time, companies have increasing difficulty finding the right people for their vacancies. Additional labour market reforms are therefore urgently called for. Furthermore, Flemish companies will have to increase their focus on innovation. Then, real competitiveness is not only reflected by cost competitiveness but also by the ability to create new products, such in a very efficient way through digitally optimised processes.
Industry 4.0, something we press very hard for, encourages new products and production processes. With success, as is proven not only by our increasing number of members and projects but also because our pool of talented people has grown to about 500 employees. Also the ecosystem around our organisation is getting stronger and stronger. We work together with the five Flemish universities and much confidence has been created between Flanders Make and our 150 partner companies. This increases our clout and our impact. That is why, in the past year, we’ve invested in our co-creation centre for the vehicle industry in Lommel and moved into a new co-creation centre for machine building in Leuven. In 2019, works will be started for the construction of our third major research centre in Kortrijk, where we will operate a state-of-the-art research centre for Industry 4.0 production.
Our existing strong companies export worldwide and are competitive. They make the difference through full-fledged innovation. A recent survey has shown that they are strongly committed to the strategic challenges of Industry 4.0. These businesses know that the future cannot be conquered with yesterday’s products and production processes. And, thus, that they will have to invest in new technology. Artificial intelligence, big data and digital twins are key supporting technologies that can increase production efficiency and result in even smarter products.
New Flemish world leaders in the making
At the same time, we witness the incorporation of quite a few new technology companies, which gives us hope for the future. This innovation in the form of start-ups and scale-ups gives us confidence that there is a next-generation world leaders in the making that goes international from the very start, creating extra momentum in Flanders. For Flanders Make, it is an important challenge to reach out to these growing young businesses, today and tomorrow. By involving them in research projects, we support them and bring them into contact with large existing players. The dynamics that they bring with them can also enhance innovation in these larger companies.
Co-shaping the future
Flanders Make wants to co-shape the future of the Flemish manufacturing companies – both large and small – through a wide range of activities that we’ve developed over the years. We want to continue to involve businesses in Flemish and European research projects. We also want to offer direct services to companies and help them, through co-development, to make new products and production processes. We have comprehensive in-house knowledge and expertise, with which we can really make a difference for the industry. For this, we work closely together with national and international partners. ‘Partnering’ is a key word for us: towards customers and businesses but also towards local and international research institutions.
For the period from 2018 to 2023, we’ve received considerable investment resources from the Flemish government. We use these funds to further expand our workforce, our competences and our talents but also to expand and renew our infrastructure.
A major concern that we wish to raise towards the future is the quality of our education. More efforts are needed here considering our declining position in international rankings. From a long-term perspective, Flanders needs excellent education that creates talented young people who show commitment and are interested in technology, have had a broad and multidisciplinary education and are capable of teamwork.
If we want to keep our industry competitive, talent development and excellent education are probably the most important contributing factors. This is primarily a mission for our education institutes but also for our companies, which – through increased cooperation with schools, among others through twin-track learning systems – can and will have to contribute to this.
By showing ambition to belong to the international front-runners, by investing in full-fledged innovation and through cooperation and top-class education, we can continue to co-shape the future of our industry and the future of Flanders."
Urbain Vandeurzen, Chairman of the Board of Directors of Flanders Make