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BELGIUM IN THE NEW GLOBAL ECONOMY Forum be.international A study commissioned by FEB-VBO and Deloitte Belgium. Emerging markets : centers of growth and essential trade partners for exports and imports Growing networks across countries : technology and flows of goods and services

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slide1
BELGIUM IN THE NEW GLOBAL ECONOMY

Forum be.international

A study commissioned by FEB-VBO and Deloitte Belgium

slide2
Emerging markets : centers of growth and essential trade partners for exports and imports
  • Growing networks across countries : technology and flows of goods and services
  • Scarcity of resources and ageing population
  • Negative public opinion towards globalization
  • Where is Belgium in the new global economy?
    • Part 1: worldwide exports
    • Part 2: internationalisation of value chains

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide3
Position of Belgium in globalmarkets
    • Belgium is losing market share

% of Belgium in worldtrade in goods

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide4
Position of Belgium in global markets
    • Activity in fast growing markets

Share of BRIC in exports of goods

Share of BRIC in

exports of services

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide5
Position of Belgium in global markets
    • High-tech goods in Belgian export

Share of high-tech in total exports of goods

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide6
Position of Belgium in global markets
    • Product specialization

Belgium's share in world exports by sector

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide7
Who exports?
    • Multinational enterprises in Belgium

Industry Net Trade Balance

Industry share of employment by multinational enterprises

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide8
Who exports?
    • Multinational enterprises in Belgium

Industry Net Trade Balance

Industry share of employment by multinational enterprises

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide9
Who exports?
    • Intermediategoods

Exports

Imports

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide10
Who exports?
    • Belgium as “middle-man” in global supply chains

Value added of trade

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide11
Who exports?
  • Large vs. small firms
    • Newly exporting SMEs

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide12
Survey results

Need for internationalization support and support received

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide13
Policy recommendations
  • To the business community
    • Make international expansion part of the strategy from the start.
  • To public authorities
    • International competitiveness: improve business climate
    • Focus on companies that are not yet internationally active
    • Develop expertise centers and international business development programs
    • Develop extensive (credit) guarantee and risk insurance programs

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide14
Zoom into services
  • Survey on international sourcing of services
    • March – May 2012
    • 80 companies in Belgium
    • Merged with Offshoring Research Network dataset
    • 5073 cases of imported services
      • 430 from Belgium
      • 2755 from the United-States
      • 2420 from other European countries (Netherlands, Germany, UK, Denmark, Spain…)
    • 74 Belgian companies that do not source services abroad

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide15
What services are sourced abroad?

‘Business processes’ = finance, accounting, human resources, marketing and sales, procurement, legal, and other back office functions

‘IT & Software’ = development and maintenance of IT infrastructure, development of software

‘Technology’ = R&D, product design and engineering services

‘Contact centers’ = inbound and outbound contact centers

Source: ORN global survey

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide16
Top 5 strategic drivers

Source: ORN global survey (average score on 1-5 scale)

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide17
Barriers (what would make you consider international sourcing?)

Source: ORN global survey (average score on 1-5 scale)

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide18
Missed opportunities ?
  • Outcomes

Source: ORN global survey

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide19
At least 3 explanations
    • Conservative sourcing practices
    • Lack of sourcing strategy
    • Weak global service delivery structures

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide20
Conservative practices – Country choices

Source: ORN global survey

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide21
Conservative practices - models

Source: ORN global survey

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide22
Lack of strategy

50% of Belgian respondents do not have a BU / corporate level sourcing strategy

Source: ORN global survey

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide23
Weak global delivery structures

80% of Belgian respondents do not optimize their global service delivery structures

Source: ORN global survey

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide24
Risks of international sourcing

Top 5

Source: ORN global survey

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide25
Experience gains

Source: ORN global survey

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide26
Key messages to managers
    • Don’t be afraid to look abroad to source services
    • Important gains
      • Competitiveness, organizational flexibility, productivity, focus on core business, and access to qualified personnel
    • To maximize the gains
      • Develop corporate sourcing strategy and optimize global delivery structure
      • Develop skills and capabilities in strategic planning and change management, risk assessment and mitigation, cross-cultural and virtual management, and contract and supplier relationship management
    • Continuum of sourcing options with usual risk / benefit tradeoff
      • Internal nearshoringfarshore outsourcing

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

slide27
Despite positive growth of exports we are losing shares in global markets
    • High-tech, knowledge intensive product and services
    • Fast growing markets (BRICs)
  • Importance of ‘born globals’ and SMEs
    • Generate new exports, create value and employment
    • Specific needs for public policies
  • Int’l sourcing as road to competitiveness
    • Lower gains compared to USA and European neighbours
    • Need for strategy, structure, and update in skills and capabilities
    • Should we learn to lose control and work with other cultures?

Belgium in the New Global Economy

Prof. Dr. Sleuwaegen (Vlerick) and Prof. Dr. Peeters (Solvay)

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