2019 Belgian R&D Barometer
- 8 out of 10 enterprises keen to optimize the financing of their R&D.
- 1 out of 3 managers unaware of the concept Industry 4.0
Brussels, June 2019. Ayming Belgium, a consulting group specialized in Business Performance, publishes its second Belgian R&D Barometer. In 2019 76% of the interviewed enterprises had an optimistic view of their innovation portfolio for the years ahead compared with 88% the previous year.
After the first Belgian R&D Barometer, published in March 2018, Ayming Belgium was ready to analyse the following developments between 2018 and 2019:
- the perception of R&D-related issues in Belgian enterprises
- the degree of optimism of innovative enterprises in R&D for the coming years
- the approval of the various financing instruments for R&D
- the generosity and applicability of the stimulants and subsidies for financing R&D projects.
In this second Belgian R&D Barometer Ayming Belgium also examined the knowledge and implementation of the digital transformation process in enterprises.
What are the foremost conclusions that may be drawn from this study based on the replies of 193 CEOs, CFOs and R&D managers of leading enterprises in innovative industrial sectors in Belgium?
1. Finding innovative ideas: the main problem for enterprises
- 76% of the interviewed enterprises are optimistic about their innovation portfolio for the coming years, compared with 88% in 2018
Laurie Pilo, Managing Director of Ayming Benelux: “Optimism increases with the size of the enterprise, but confidence in the future of the innovation is generally less in 2019. The growth of optimism is one of the biggest for the future. Pessimism about the potential for innovation in the short term is more pronounced in medium-sized enterprises (with 50 to 499 employees). In this segment nearly one in three managers describe themselves as “rather pessimistic” about their future innovation portfolio.”
In 2019, just as in 2018, the three big challenges for enterprises in innovation:
- the identification of new ideas, new products and/or profitable markets
- recruitment of qualified profiles
- access to government financing (tax benefits and subsidies)
- 66% of the enterprises think that the identification and reporting of their R&D activities must be optimized
Laurie Pilo: “This percentage rises to three out of four enterprises if the optimization of financial resources in R&D is regarded as a priority because these two approaches happen to be simultaneous (see below). The identification and reporting of research and development activities requires scientific mapping, which isn’t easy if you don’t have the necessary perspective. Hence the importance of seeking assistance in this procedure. This helicopter view is essential, because it sharpens the long-term vision for innovation in the company and at the same time it boosts optimism among the management!”
- 61% of the enterprises neglect innovation in production processes
In 2019 the rate of innovation is generally somewhat lower than in 2018 (“frequently” less often in the replies), but the intensity seems to be higher (less often “never”), so the differences between 2018 and 2019 are not significant.
Nadège Bonny, Innovation Performance Manager: “The main conclusion is that innovation in products and services, in just the same way as scientific and technical innovation, comes before innovation in production processes. The crossover to Industry 4.0, which is designed to keep Belgium competitive in the future, is – by extension – a major issue in these particular sectors. There’s still a long way to go in this regard.”
2. Collection and analysis of data is regarded as essential.
- More than one third of the managers of innovative companies have never heard of the concept Industry 4.0
Industry 4.0 (or Smart Factory) is the product of the 4th Industrial Revolution: it refers to a new generation of connected, robotic and intelligent factories. These use technologies such as artificial intelligence (AI), robotics, Big Data, Virtual and Augmented Reality, connected objects (IoT). They can operate autonomously and are able to auto correct.
Ayming’s research reveals that the more staff in the enterprise is involved in R&D, the more its managers are familiar with the concept of Industry 4.0 – which is no particular surprise. “We observe that this challenge is more difficult for enterprises with fewer than 500 employees, that most often have to fight financially to remain competitive. It is interesting to note that 57% of the interviewed enterprises regard the financing of the transition to Industry 4.0 as a real challenge”, says Nadège Bonny.
- Data management of primary importance for 55% of the enterprises
Laurie Pilo: “Data management is central to an enterprise: respectively 55% and 58% of the interviewed managers are of the opinion that the integration of data collection tools and structured data analysis are essential steps in the transformation to Smart Factories. The automation of the production processes comes only third (45%), while three out of four of the enterprises say that they work on projects to automate or digitize their industrial processes. This contradiction is all the more striking because the key to success of the transition to the Smart Factory is precisely there.”
3. R&D stimulants seriously underused
- 72% of the innovating enterprises apply for a partial exemption from the withholding tax on revenue from the work of their researchers …
Optimization of the financing of R&D is a priority for 81% of the enterprises. However, only few of them feel sufficiently experienced and adept with administrative applications. One consequence of this, as in 2018, is that there is still a flagrant underuse of the direct and indirect government financing for R&D, besides the fact that major changes happen year on year. Use of the partial exemption from the withholding tax on wages for researchers shows a slight increase (72%). It is in fact used by enterprises with more than 10 employees in R&D. The other subsidy that is increasing, as a consequence of the work of Ayming and its partner Inspiralia, is the SME instrument that supports innovative European SMEs with high growth potentials (15%). “The measure will evolve to become a more complex system by late 2019”, warns Nadège Bonny.
- … but 83% find the system too complicated …
Although generally welcomed, mainly for its “generous” character, 83% of the interviewed enterprises regard the partial exemption from the withholding tax on revenue from the work of researchers as relatively or as very difficult to apply. This complexity is also cited by nearly one third of the enterprises that do not apply the measure, along with other factors such as lack of knowledge of the system and lack of time.
Also 44% of enterprises audited by the tax authorities found themselves corrected for an incorrect application of the system, either in terms of validity of the researchers’ degrees or in terms of pro rata and/or the nature of the R&D projects. That is 10% more than in 2018!
Furthermore, 71% of the interviewed enterprises considered that the measure would have only a “limited” or “average” impact on their recruitment of R&D personnel. “This score is interesting because it appears to suggest that enterprises only ever make use of the measure reactively. There’s still no strategic, proactive use of these advantages “, says Nadège Bonny.
- 69% of the enterprises find regional subsidy mechanisms complicated
Only 9% of the interviewed enterprises find applying for subsidies for R&D projects “easy” or “very easy”. 69% of them find the procedure “difficult” or “very difficult”.
Laurie Pilo: “Enterprises are fully informed of the support possibilities that the government offers for R&D activities but lose their nerve because of its complexity. A general reading of the proposed stimulants at European, federal and regional level also seems difficult. Lack of time doesn’t help the concerned enterprises much either.”
Ayming is an international business performance consulting group covering four areas of expertise: human resources, operations, finances and innovation. Ayming is present in 15 countries throughout Europe, North America and Asia. Ayming Belgium has been present on the Belgian market for more than sixteen years and has nearly 600 corporate clients, ranging from young innovative enterprises to international enterprises.
 Online research conducted from 19 February to 14 May 2019 by independent survey agency iVox. The target sectors include chemicals, energy, environment technologies, health and pharmaceuticals, business services, consultancy, ICT, industrial capital goods, etc.