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Where we talk about ideas, events, cases & more
7 April 2016

Why Belgium is still lagging behind in terms of digital maturity?

In this Point of View I want to address three questions about the Belgian digital landscape in which all companies and citizens operate at the moment. I wonder why Belgium is still lagging behind in terms of digital maturity and e-commerce compared with other countries within the European Union? But don’t be afraid, there are government measures underway or being applied as I write. And finally I’ll try to see what can be done better because, let’s be honest, in Belgium as in France and The Netherlands, there is a slight tendency to criticise what our politicians do. It’s all part of the game.

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Why is Belgium lagging behind neighbouring countries in terms of digital and e-commerce?

Today, you have to be digital or you can fire yourself immediately. In order for your organisation or project to succeed, you also need to have executives who are digital-minded and who will increase your digital IQ or the digital IQ of your organisation.

The business model of your company is changing, as is the economy in which you operate. The government therefore has to adapt the social and fiscal rules facing companies and individuals.

Uber has shown in recent times how weak economies are and how fast we will need to adapt the rules to be able to cope with this. “Uberisation” is changing the pace of the game with each passing day.

E-commerce also shows how unready the Belgian economy is. For example, if we take a look at the difference in working hours between distribution centres in Belgium and the Netherlands, we can already see that Belgium does not allow overtime or weekend working hours. This means that the distribution centres serving the Belgian market are more often located close to Belgian borders in the Netherlands or France instead of in Belgium. This means that the part of the money you devote to buying online goes abroad. Social and union constraints were created initially to protect our jobs, but at the same time they are now restricting business from operating 24/7 online. As such, they also destroy the value businesses and people create and are a threat to new jobs in Belgium, just because our laws are too conservative about the working flexibilities required in the new online economy.

In Belgium, we operate in a climate of mistrust. We usually begin a relationship by not trusting the other party and only start building trust along the way. For example, nobody trusted Uber in the beginning, but look at the US: Uber has made the taxi sector grow by a factor of 3 in the city of San Francisco.

Belgium's problems today are the same as they were yesterday, with rigid job markets and high taxes. This problem was there before, of course, but it has been enhanced since the digital age.

So, dear government, members of our beloved Kingdom, it’s time to act!

 

What measures is the Belgian Government taking to bridge the gap?

Digital has experienced the greatest growth in the past years. Today, it represents 3.8 million jobs in Europe. And Belgium is in the Top 5. Digital may destroy some jobs, but it also creates new ones. If 2 jobs are destroyed, 5 new ones are created around digital. This is a net gain of 3 jobs. The 2030 job will involve a digital component. There will also be more and more automation ahead. The added value of humans will be creativity and problem-solving skills.
 

Belgium has to take the opportunity created by this growth. It can become a start-up friendly country. For example, Brussels is the 10th friendliest start-up city in Europe. At the top of this ranking you have cities such as London, Berlin and Amsterdam. If we look at Belgium at large, it ranks 5th among EU member states. See this link to find out more. It’s encouraging, but is it enough in our global, interconnected world?

Some initiatives are on their way. For example, Minister De Croo has surrounded himself with 30 Belgian influencers in the digital industry such as Thierry Geerts, Dominique Leroy, Bruno Colmant, John Porter and many others. This task force plans to put Belgium on the Digital Radar. Its plan and beliefs have also be digitised and can be found here: http://www.digitalbelgium.be/en

Another initiative is that the government aims to help people invest in start-ups by developing a tax shelter. The goal is to have a tax that is 45% lower than in other sectors. It will make loans easier to access for starters and prompt hesitating entrepreneurs to finally take the plunge and jump into the digital business.

As the economy is impacted by digital, so are the citizens. Ministers want all interactions with the government and the authorities to be digital in the near future. Look how Daniel Bacquelaine has recently digitised interactions between citizens and the National Pensions Office. But to make this happen, our government and city officials will have to be trained to use digital as the main means of interacting with citizens. This is creating a huge opportunity for digital specialists to train these people.

The government must invest in digital talent! To defend our position as Belgian digital champions, we have to be more flexible in terms of education, work and laws, because the pace of change is faster than some people think. If you want to read more about how digital talents will be sustained, read http://www.digitalchampions.be/en/home

What is my personal opinion about these initiatives and what more could be done?

What’s great about Minister De Croo’s and Minister Bacquelaine’s initiative is that it exists at all. It shows that ministers take digital disruption into account when allocating budgets and creating laws.

But they could go even further. Think about the tax shelter initiative. Great! But the next burden for the digital entrepreneur is to defend it as an idea and take all the administrative steps to create the right venture. In Europe, our intrepid businessperson needs 20 documents to do so. In the US, it’s only 3! So there is room for improvement.

Furthermore, it only allows citizens to invest in digital ventures and deduct their investment from the taxes they pay. Some remarks crop up immediately. Are people going to be willing to invest money in such risky businesses? Not sure. The reason why the tax shelter for the Belgian cinema was so successful is that it allowed companies to invest and deduct this investment from their taxes. A wise choice would be to expand this measure to include companies. Another point for the minister’s agenda!

Education is also a weak point. There are budgets and initiatives but the results take too much time to get going. How come? Well simply look at the school educational programmes: you have courses about digital marketing, e-business and other variants. Shouldn’t all lessons be digital and integrate these points at their core? I think Joëlle Milquet and Jean-Claude Marcourt need to think about this.

Now let’s look at Belgian companies and organisations. To what extent have they jumped fully into digital and how far have they gone? It is difficult to find the right answer. Is the government helping them as much as it could? I’m not sure. The first reaction is to subsidise these investments. Shouldn’t a government agent help business-owners to get a full return on digital investments out of these subsidies? In addition to money, advice is also needed. It’s a win-win situation.

There is a lot of public investment in logistics and facilities. That’s great, but on the other hand there are measures put in place that further tax truck companies with the kilometre tax. What the government gives on the one hand is taken away on the other. Not a wise approach. Communication between government departments is not very good. A broader approach about solving logistics problems needs to be undertaken. So, initiatives and budgets are there – but they could go further. I’m not worried. Digital natives are growing and fresh elections are approaching. The next prime minister should hire a minister who is dedicated to Digital only. Not a Minister of Economy who adds in the odd online initiative here and there.

 

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