The Flemish government over the last five years spent about one billion euros on support for innovative businesses, but one euro in four went to one of the 25 largest companies in the region, according to figures collected by Flemish member of parliament Maurits Vande Reyde (Open VLD).
The top names on the list were Janssen Pharmaceutica (pharmaceuticals: €48.2 million); Umicore (materials: €32.9m); Barco (technology: €25.5m); Siemens (technology: €20.2m) and CNH Industrial (capital goods: €19.4m).
In the past five years, Flemish innovation support has almost doubled, to €297.5m last year. But the government of minister-president Jan Jambon has given itself the task of making government support more targetted to places where it can make a difference. That appears not to be the case at present.
“A survey by consultant IDEA shows that only 8% of recipients of transformation aid would scrap their projects if the government did not support them,” Vande Reyde said.
In other words, companies are taking subsidies for projects they would be working on anyway.
“We think it is more efficient and effective to use those resources for economic infrastructure and tax reduction. Naturally, this is only possible when corporate tax becomes a regional matter. I think we should go for that in the next state reform.”
The chances of that happening are slim, admits Philippe Muyters (N-VA), minister for the economy in the previous Flemish government.
“For me, [subsidies were] about compensating for the high tax burden in this country,” he said.
“For years I have been asking the regions to be given at least a share of part of corporate tax income, so that we can reduce it in Flanders and scrap subsidies. But we are alone in that.”
Innovation support, however, is not dispensable, he said.
“Excellent research is expensive and does not guarantee success. If risks are not shared, many developments will not happen.”
In the meantime, according to the Flemish agency for innovation and enterprise Vlaio, the imbalance among recipients of innovation aid is being ironed out. Last year, more than half of all subsidies went to small and medium-sized businesses.