‘New Industrial Policy' in Flanders: An Integrated Policy Framework for a New Productivity Revolution

The New Industrial Policy in Flanders is part of a new generation of industrial policies for the 21st century. It repositions the competitiveness challenge of Flanders in a transformation policy agenda, targeting the growth of internationally distinctive knowledge-based clusters, in line with the Future Plan of the Flemish government ?Flanders in Action?.This article explores the success conditions for such policy for structural change from the perspective of the productivity slowdown that is a challenge for all mature economies, but in particular for the Flemish economy. A concrete analysis of the Flemish economic performance reveals that the competition and growth model has been based for too long on a strategy for capital intensification instead of innovation. In addition the institutional fragmentation in Belgium was conducive for structural imbalances in the Flemish innovation system between the science base and the industrial structure that hinder the transition to a new growth model. The launch of the ?White Paper for a New Innovation Policy for Flanders? by the Flemish Government in May 2011, marked the recognition that de-industrialization is a threat for the ambition to belong to the top regions in Europe and that a new approach towards industrial innovation based on value chains and clusters is needed. The White Paper has laid foundations for such a new transformation policy with a strong vision for the Factory for the Future, a strong policy coordination, a strong stakeholder mobilization.The new approach acknowledges that the transition to an innovation driven economy requires a new productivity revolution, mobilizing all underutilized resources in ?total factor productivity?, but success depends on the implementation of an integrated policy framework and adequate strategic governance.