Belgium has long been established as an epicenter of innovation. With a multicultural, collaborative, and business-friendly landscape, the heart of Europe continues to attract key international players. It's not only a conduit of global trade and commerce but also fertile ground for a diverse range of pioneering industries.
The Belgian regions of Flanders, Wallonia, and Brussels each offer unique advantages for industry-specific innovation startups, scaleups, and projects. Despite the unprecedented events of 2019 and 2020, Belgium saw an 8% increase in foreign direct investments (FDIs)—above the 2021 European average.
That's according to the EY Belgian Attractiveness Survey 2022, which ranked Belgium sixth worldwide (after countries with significantly bigger economies). The survey also noted new projects as the key driver of FDIs in 2021. Out of 245 investment projects (which created 6,970 jobs in 2021), 80% of them were new initiatives.
The European Commission also ranked Belgium fifth in its European and Regional Innovation Scoreboard 2021. As an innovation leader, the country performed particularly well in the following categories:
- Attractive research systems (most cited publications, foreign doctorate students, and international scientific co-publications).
- Use of information technologies (employed ICT specialists and enterprises providing ICT training).
- Linkages (public-private co-publications, job-to-job mobility, and innovative SME collaborations).
- Employment impacts (employment in innovative enterprises and knowledge-intensive activities).
- Innovators (business process innovators (SMEs) and product innovators (SMEs).
While sustainability and decarbonization are among Belgium's top priorities, the post-pandemic landscape has brought about new challenges. Creative solutions are emerging to navigate this "new normal," and international investors are noticing.
Whether you're an entrepreneur, CEO, or investor, innovation trends in Belgium can offer some valuable insights. Here are five groundbreaking developments worth noting.
CleanTech Takes a Front Seat
Belgium's cleantech ecosystem is focused on sustainability, transitioning to a circular economy, and reducing carbon emissions. Adopting clean energy initiatives such as the National Energy and Climate Plan 2030 is also a priority.
Cleantech trends and innovations among the Brussels-Capital, Flemish, and Walloon regions include:
- Renewable energy
- Green materials
- Low-carbon construction
- Sustainable mobility
- Carbon capture, use, and storage
- Circular waste management
- Sustainable automation
- Digital transformation
Renewable energy and sustainable construction remain two of Belgium's biggest cleantech industries. According to PwC's EU Green Deal Survey, solar energy remains the most-used source of clean energy in Belgium (87% vs. the EU average of 78%).
Wind energy is less developed than in other EU member states, while only 7% of Belgian businesses use hydrogen as an energy source.
But that's about to change. The federal government approved the Belgian Hydrogen Vision and Strategy in 2021, signaling a significant shift in renewable energy (and, therefore, more investment opportunities).
The strategy outlines four primary objectives and concrete actions, some of which are mentioned below:
- Positioning Belgium as a leading importer of renewable molecules for the rest of Europe: Supporting hydrogen import infrastructures and developing a certification system and a register for RNFBOs.
- Unifying Belgium's leadership in hydrogen technologies: Establishing a hydrogen testing infrastructure and an electrolysis capability of 150 MW minimum.
- Striving towards a robust hydrogen market: Construction of free access pipelines for hydrogen transport and adaptation of regulatory and legislative frameworks.
- Building cooperation: Increasing Belgium's representations in international hydrogen organizations and forums; and establishing a structural dialogue within the country.
On 8 June 2022, US electrolyzer manufacturer Plug Power announced plans to build a 100MW hydrogen plant at the Port of Antwerp-Bruges. It's expected to be in operation by 2025 as likely the largest of its kind in Northern Europe.
Belgian shipping company Compagnie Maritime Belge is also set to run "ammonia dual-fuel ships" from 2024, expanding its hydrogen refueling operations in Antwerp.
With the EU Green Deal and Belgium's 2030 greenhouse gas reduction targets, eco-innovation and clean technology remain pivotal sectors.
Double-Edged Digital Economy Drivers
In terms of digital maturity, Belgian businesses are ahead of the global average, according to a 2022 McKinsey and Company Report. During Covid-19, companies worldwide relied on digital solutions to keep operations running, causing an unprecedented shift in digital transformation.
Increased demand for online products and services, hybrid and remote working, and the adoption of new technologies brought digitization to the forefront. And while Belgium adapted comparatively quickly, the post-pandemic landscape has highlighted some weak points. Let's look at the trends.
Government Reforms and Investments
Along with climate, sustainability, mobility, and innovation, digital transformation is listed as one of the "strategic axes" in Belgium's National Recovery and Resilience Plan.
With 15 projects in the pipeline, the Belgian NRRP's major investment areas and example activities under digital transformation include:
- Cybersecurity (€79 million)
- Public administration (€584 million)
- 5G, optic fiber, and new technologies (€100 million)
- Digital tools for trade
- Simplifying administrative procedures through digitalization
- Digitalization of federal public services
- Digitalization of Flemish Government services
Although ranking sixth, the EY 2022 Attractiveness Survey found Belgium's workforce lacking crucial skills in:
- Artificial intelligence and robotics
- Cybersecurity
- Big data and analytics
Like a double-edged sword, these industries also happen to be trending in Belgium's digital transformation arena. Their use cases extend to almost all other industries, including high-tech niches like Information Technology, FinTech, RegTech, and Blockchain tech.
Here are some innovation trends encompassing these and other sectors under digital transformation.
Starting Up Artificial Intelligence
Flanders is home to 255 AI startups and scaleups, while Brussels has 88 and Wallonia, 94. According to AI 4 Belgium, ongoing AI research projects in Belgium include:
- AI technologies and robotics in the production and manufacturing industries.
- The optimization of decentralized machining processes.
- Data-driven monitoring to improve efficiency.
Cloud computing is one sterling example of AI use across industries. In Belgium, 94% of all e-banking, 80% of e-learning, and 40% of HR solutions were cloud-based, according to a 2018 Lexology Report.
But the post-pandemic landscape has evolved, with the European Union economy—and other global economies—looking to adopt a more future-focused approach. As organizations seek increasingly efficient and automated processes, software vendors and cloud giants are meeting this demand by creating "common core" vertical solutions to address shared needs across industries.
Moving away from generic platforms, hyperscalers like Microsoft Azure, Google Cloud Platform, and Amazon Web Services (AWS) are starting to offer solutions unique to sectors like retail, healthcare, automotive, etc.
Cloud computing is going vertical. Thanks to AI-driven technology and machine learning, hybrid cloud infrastructures can offer industry-wide solutions, allowing organizations to focus on differentiation and innovation.
In April 2021, the European Union proposed unprecedented regulations governing artificial intelligence. The EU's Artificial Intelligence Act lays down harmonized rules regarding AI, though it's still in the early stages.
Meanwhile, the Belgian Data Protection Agency approved the first-ever transnational EU Cloud Code of Conduct. It sets out requirements for practical implementation within Belgium's cloud market, which is projected to garner revenue of $2.05 billion (€1.99 billion) in 2022.
Big Data and Big Ambitions
Big data and AI are inextricably linked—especially in research and technological innovation. While AI relies on large datasets, big data uses AI methods and theories to extract and analyze vast volumes of data.
The Belgian government is actively committed to bringing in digital investments. One such instance is the multi-year Digital AmBEition initiative launched in November 2021.
In partnership with the Belgian government, Microsoft is opening a new datacenter region to fast-track the digitalization of the public and private sectors. Once Belgium joins the world's largest cloud infrastructure, Belgian businesses of all sizes and industries can access Microsoft Azure.
The investment plan allows anyone in Belgium to use cloud services and capabilities in areas like computing, analytics, artificial intelligence, networking, databases, and the Internet of Things (IoT).
While other government initiatives like the Digital Wallonia 2019-2024 Strategy are ongoing, the private sector has also been busy. One Belgium-based major data center operator, LCL Data Centers, is expanding its portfolio to include wholesale colocation services.
With hyperscale data center development, the company is set to expand its Wallonia One data center campus to 60 MW within the next few years. Meanwhile, other mega colocation providers continue to enter the Belgian market.
In 2021, EdgeConneX announced the development of its new Brussels-based data center, while Google and Microsoft revealed investment plans. As such, the Belgian market is projected to grow significantly.
The EU also recently adopted a new internal digital strategy to prioritize strategic goals such as the EU Green Deal and Europe's Digital Decade.
Cybersecurity: A Safe Bet?
Digital transformation can't exist without cybersecurity. An ever-growing third-party ecosystem, increased use of 5G-connected devices, and the widespread adoption of remote working models is fertile ground for cybercrime.
The Belgian government has implemented substantial cybersecurity reforms with significant investments. A vibrant cybersecurity ecosystem exists at the regional level too. As such, market expansion opportunities abound.
- Flanders is home to the IMEC strategic research center for digital and nanotech, various IT and data security incubators, and world-class research groups focussing on security, data sciences, and analytics.
- Wallonia's dedicated Digital Wallonia 4 Cyber program implements ongoing research projects on cybersecurity, computer systems, and networks. The region's EDIH Industry 4.0 project also includes cybersecurity as a key technology to speed up digital transformation in manufacturing.
- Brussels' Initiative on Cybersecurity Innovation (BICI) encourages national and EU partnerships to promote cybersecurity technologies and their industry-specific conversions.
Key cluster organizations like the Cyber Security Coalition, the National Center for Cybersecurity Belgium, and Infosecurity Belgium also support innovation in the IT security space.
Ongoing trends in cybersecurity include AI and machine-learning technologies that accelerate data analysis, detect threats, and identify anomalies. In April 2022, Naval Group Belgium opened two new R&D labs in Brussels to primarily focus on cybersecurity and novel mine countermeasures.
Biotech is Booming
Belgium is home to leaders in academic research, big pharma or agro enterprises, and small SMEs—the perfect ecosystem for biotechnology innovation. With the Flemish Research Institute for Biotechnology and other industry stakeholders, the government has introduced two new knowledge centers conducting foundational biotech research.
The world's top ten pharmaceutical companies, including Pfizer, GSK, and Janssen Pharmaceutica, also have key research activities in Belgium. By collaborating with biotech startups, these corporations drive innovation in the biotech sector—along with public and private R&D investors.
Belgium's biotech industry played a pivotal role during the pandemic, allowing the sector to spearhead the country's economic revival. In the past decade, companies have invested €5.5 billion in biotech alone. Now, industry leaders are looking to expand biotech production techniques in the health, industry, and agricultural sectors.
In June 2022, the University of Antwerp and Ziphius Vaccines entered a collaboration agreement to optimize the delivery of saRNA-based therapeutics and vaccines.
Belgium-based Galapagos NV also recently acquired AboundBio and CellPoint— a move towards next-generation cell therapy. Meanwhile, European venture capital firms Forbion, Jeito, and Inkef Capital have invested €80M in a Belgian firm in the radiopharmaceutical sector.
Leading the Way in Logistics Innovation
Post-pandemic challenges have accentuated the need for more efficient, responsive, and optimized supply chains. As a global exporter and importer, logistics innovations play a central role in Belgium's market.
Log!Ville, the largest logistics innovation and demo center in the European Union, opened its doors in October 2021. Situated in Flanders, the center offers companies (big and small) to test the latest innovations in logistics, including:
- Drone-based inventory management
- Digital yard solutions
- Hydrogen trucks
- Automated mobile warehouse robots
- Smart city logistics
- Digital product passports
- Additive manufacturing
Regional initiatives like Flanders' spearhead cluster, VIL, and Logistics in Wallonia focus on green supply chain solutions, hinterland connections, last-mile logistics, and digital transformation—such as blockchain technology solutions.
Burgeoning Blockchain Tech
As one of the nations assisting with the European Blockchain Services Infrastructure (EBSI), Belgium is no stranger to blockchain tech and its potential.
It's home to the Fujitsu Blockchain Innovation Center, which collaborates on innovative blockchain projects in areas like supply chain management, logistics, smart contracts, voting IDs, and smart cities.
Tioga Capital Partners was recently established in Belgium. It's a new venture capital fund focused solely on blockchain technology. In 2021, the Belgian government implemented registration requirements (effective May 2022) for virtual asset service providers. A new European licensing regime for crowdfunding service providers was also implemented.
In the same year, a Belgian blockchain technology company completed a €1.55 million funding round. Meanwhile, Belgium-based investment firm NXMH reportedly owns an 80% equity stake in the cryptocurrency exchange Bitstamp.
The Belgian blockchain startup, SettleMint, raised €1.9 million in 2020 after developing a securities trading proof-of-concept for Standard Chartered. Another Belgian startup, NGRAVE, developed an extremely secure hardware wallet to store various crypto assets.
As yet, no major decentralized finance (DeFi) initiatives have materialized, and non-fungible tokens (NFTs) remain largely unknown to Belgium's general population. Still, blockchain tech opens the door to countless use cases and industries.
Belgium: A Paradigm Shifter
From logistics and digital to cleantech, biotech, and blockchain tech, Belgium is a hotspot for pioneering industries. With a future-forward approach and favorable R&D environment, it continues to break new ground and set innovation trends.
Belgium welcomes foreign investors, companies, and entrepreneurs across a broad spectrum of industries and niches. With a commitment to sustainability, innovation, and digital transformation, the gateway to Europe offers unique and diverse opportunities.
If you're considering setting up shop, scaling up, or launching your innovative startup in Belgium, you can find out about innovation grants and global business solutions here.
Sources: Ernst and Young, European and Regional Innovation Scoreboard 2021, PwC, Hydrogen World Expo, economie.fgov.be, Consultancy.eu, Belgium's National Recovery and Resilience Plan, AI 4Belgium, Lexology, EUR-Lex, Belgian Data Protection Agency, Microsoft, Wallonia.be, European Commission, Fujitsu, VIL, Logistics in Wallonia, Flanders Trade & Investment, Reuters.
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