From catching up to frontrunner
‘Key.’ ‘Performance.’ ‘Indicator.’ Or KPI for short.The term was first used by consulting firm McKinsey some 60 years ago and is now a mainstay in the strategies of just about every company. KPIs allow companies and organisations to check that they are on target with their operational goals. The economic action plan for Limburg, SALKturbo, aims to make Limburg a leading Flemish and European region, based on 4 priorities and 12 ambition targets. With this goal in mind, KPIs are obviously part and parcel of it.
Under the leadership of Professor Piet Pauwels, the Dean of the Faculty of International Business at Hasselt University, a team from POM Limburg and UHasselt took a close look at SALKturbo. And got results. In the rainy summer of 2021, the team presented a baseline with a set of KPIs for each ambition target from SALKturbo. In these socio-economic indicators, Limburg’s performance and evolution is always compared to that of Flanders and other comparable European regions. Together with the various stakeholders within the SALKturbo task force, measurable objectives were then linked to these. Monitoring these indicators should provide objective insights into how the ambitions will be realised in the coming years. Below we present a few growth paths for the Limburg economy.
Rich makes richer
One of the main conclusions from the socio-economic analysis of the SALK turbo plan, was that Limburg’s labour productivity lags far behind the rest of Flanders. Moreover, in recent years, the gap has only widened. We need to reverse this trend, to safeguard the economic competitiveness and prosperity of our province. Not coincidentally, the first priority in SALKturbo is “Competitive Limburg”. “Nonetheless, we obviously shouldn’t think that we can close that gap within a few years, it’s not that simple,” argues Professor Piet Pauwels. “Rich makes richer in this case. The higher the labour productivity, the more resources there are to reinvest in better machinery or labour optimisation, which in turn will again raise productivity. It is therefore more difficult for a region with low labour productivity to catch up, just look at the persistent discrepancy between Flanders and Wallonia. Nevertheless, we are counting on the fact that, partly thanks to SALKturbo, by 2028 the gap between Limburg and Flanders will no longer be widening. After that, we want to reduce the gap, with a target of less than 15% difference. In 2020, labour productivity in Limburg was 15.8% lower than in Flanders, and between 2015 and 2020 the difference had risen by one percentage point.”
‘Eliminate the economic disparities within a few years? It’s not that simple!”
Professor Piet Pauwels, Dean of International Business, UHasselt
30,000 additional jobs
To make Limburg more competitive, the SALKturbo task force has put forward a number of other ambitions. By broadly distributing resources across businesses in Limburg, our province must strive to secure a sustainable 11% of the Flemish support for Research and Development by 2028. In 2019, Limburg’s share was 7.1%. Another aim is that by 2028, more than half of Limburg’s young people between the ages of 18 and 24 will choose higher education. In 2019, the figure was 48.5%. In this regard, there is a specific focus on increasing the number of STEM graduates. Accelerated growth is also envisaged for exports and foreign direct investment, of course driven by the welcome management team at POM Limburg.
All of this should ultimately lead to more jobs in our province. And there is a clear objective in this regard: at least 30,000 additional jobs between 2019 and 2025. “Limburg has a 12.5% share of the salaried employment in Flanders,” explains Deputy for the Economy and Chairman of POM Limburg Tom Vandeput. “That roughly corresponds to our share of the working-age population in Flanders. The first goal is therefore to at least maintain this share. If we can keep pace with Flanders and maintain the growth rate we have had in recent years, we will add more than 30,000 jobs between 2019 and 2025. Although it can always be more of course.”
But who is going to fill all these jobs? Already now companies are struggling to find new people. “That’s why, besides making sure Limburg is competitive, we are also prioritising an inclusive Limburg,” Vandeput continues. “We want our province to have a labour market that leaves no one behind, where every talent has opportunities to grow. That starts in school. Currently, more than one in ten children in primary school in Limburg are falling behind in school. That number needs to come down. By finding the right balance of educational forms in secondary education, we are aiming to achieve a drop in the number of young people in Limburg leaving school without a secondary education diploma. Compared to other European regions, we can still make a lot of gains in that area. By offering more jobs, we want to retain talent in Limburg and attract talent from outside Limburg, so that we can turn the ‘brain drain’ into a ‘brain gain’. Of course, a robustly developed higher education system in our province definitely has to be part of the process.”
“The higher the labour productivity, the more resources there are to reinvest in better machinery or labour optimisation, which in turn will again raise productivity”.
Professor Piet Pauwels, Dean of International Business, UHasselt
Employment rate of 75% by 2028
With more jobs and more Limburg residents connected to the labour market, this should ultimately lead to a substantial but essential increase in the employment rate in the province. This is the percentage of working people among the population between the ages of 20 and 64. And, it must be said, Limburg currently scores rather poorly in this area, compared to the rest of Flanders. In 2020, the employment rate in Limburg was 71.9%. The average in Flanders was 74.7%. The frontrunner in Flanders is East Flanders, with an employment rate of 77.1%. But that other peripheral province, West Flanders, also scores significantly better than Limburg at 76.5%. Flanders has set the ambitious goal of achieving an 80% employment rate by 2030.
Limburg is aiming to gradually close the gap with Flanders, targeting an employment rate of 75% by 2028. But is that realistic? “In order to achieve an overall employment rate of 75% by 2028, Limburg needs to gain 0.5 percentage points each year,” explains Professor Piet Pauwels. “To give you an idea, over the period 2017-2019, that growth averaged 0.2 percentage points per year. So it’s ambitious, but not unrealistic. Unemployment in Limburg is as low as the rest of Flanders, so there don’t seem to be many gains to be had there. The potential in Limburg is primarily with the large group of non-professionally active people. So people who are neither working nor looking for work, for whatever reason. Among the low-skilled in Limburg, barely half have a job. The same applies to 55- to 64-year-olds, where the difference with Flanders is noticeably large. Especially in these two groups, Limburg has to catch up substantially with the rest of Flanders. The current tightness in the labour market may help in this regard. Employers will undoubtedly need to recruit more broadly and attract or retain workers through guidance and additional training. We will therefore mainly achieve a higher employment rate by enhancing the employability of the individuals who are currently not getting into the labour market.”
Four in ten have limited digital skills
One stumbling block to reconnecting with the labour market is often limited ICT skills. Digital skills are crucial in today’s job market. Even applying for a job has become increasingly digitalised, knowledge of software programs is nowadays almost a standard part of job descriptions and jobs in which you don’t come into contact with ICT or digital tools are the exception rather than the rule.
However, the problem is that a large group of people do not even have basic digital skills to enter the labour market. A large-scale survey by Statbel in 2019 examined the extent to which an individual can process information online, communicate online, solve problems digitally, and find their way around software. The results showed that 63% of people in Limburg between the ages of 16 and 74 have basic or advanced digital skills. That means that 37%, or nearly four in ten people in Limburg, are less familiar with digital, or not at all, with digital applications. Incidentally, the percentages are the same for the rest of Flanders.
“The digitisation of our economy, and in fact of our entire society, has accelerated over the past decade,” explains Deputy Tom Vandeput. “Moreover,the spread of the coronavirus has significantly increased the pace of that acceleration. As a result, a large group of people are at risk of being left behind both economically and socially. Our ambition is to make everyone in Limburg digitally literate, at home and beyond.
Through targeted SALKturbo initiatives, we want to make a contribution in this regard, and are aiming for three quarters of the 16-74 year olds in Limburg to have sufficient basic digital skills within 6years. But we also want to support businesses in Limburg in their further steps towards digitisation. In recent weeks, the Province of Limburg, Hasselt University and POM Limburg have conducted a large-scale survey to gauge the level of digitisation among businesses in Limburg. This ranged from developing their own website to, for example, using artificial intelligence. Based on the results, we will get a good idea of where we stand right now, and we will take targeted actions within SALKturbo to support companies as they move further into the digital economy. Later this year, we will also gauge the level ofdigitisation in healthcare, both among healthcare providers and citizens.”
Business parks a huge trump for Limburg
The KPIs and associated ambitions for a more competitive, inclusive and digital Limburg economy are already well-known. But what about that fourth priority from the SALKturboplan: a sustainable Limburg? Well, in the area of energy in particular, Limburg is doing rather well compared to Flanders. The task therefore is to maintain our lead at the least, and preferably increase it. Energy-related CO2 emissions have declined more sharply in Limburg than in Flanders in recent years. If we keep this up, it will be possible to get Limburg’s share of the Flemish CO2 emissions to below 12% by 2025. This sharper decline has also allowed Limburg to increase its gross domestic product (GDP) per ton of CO2 emissions more substantially in recent years, compared to Flanders. Nevertheless, there is still a 6% gap between Limburg and Flanders. By 2028 at the latest, Limburg wants to have closed this gap.
‘Do I sleep well? (laughs) Like a baby. Look, our commitment and belief in SALKturbo is rock solid. As is the strong confidence in the Limburg companies, knowledge institutions and employees. You know, Limburg has excellent trumps to excel on the economic front.’
Deputy for the Economy and POM Chairman Tom Vandeput
Further reducing CO2 emissions goes hand in hand with generating more green electricity. Today, Limburg accounts for more than a fifth of the total generation of green electricity in Flanders (wind, solar, water, biomass, biogas). However, the average annual growth rate was slightly stronger in Flanders in recent years. To maintain its relatively high share, Limburg must at least follow the Flemish growth trend.
We see a more serious challenge in the economic valorisation of our business parks. In 2020, economic value creation in GDP per hectare of business park in Limburg was more than half or about 54% lower than in Flanders. Moreover, in recent years, Flanders has made more progress than Limburg, further widening the gap. “Of all the Flemish provinces, Limburg has by far the most room for entrepreneurship,” Professor Pauwels continues. “The active supply of business parks in Flanders is currently 745 ha. Of that, over 525 ha, or 70%, is in Limburg. Logically, the occupancy rate of business parks in Limburg (79.6%) is therefore significantly lower than the average in Flanders (84.9%). Less occupancy generally also means less value creation (GDP). Add to that the lower labour productivity in Limburg and you already have a large part of the explanation for why Limburg is trailing. At the same time, the available supply of business parks is a huge trump in Limburg’s economic fabric, so it is clearly possible to narrow the gap in the coming years. Limburg must use its available space smartly and sustainably.”
The objective of SALKturbo is to strengthen Limburg’s economic fabric within Flanders and Europe. To what extent this is successful should be visible in the KPIs and their associated ambitions. When the final balance sheet of the KPIs is drawn up in a few years, it will have to be undeniable that SALKturbo has given the Limburg economy a solid boost. “Do I sleep well? (laughs) Like a baby. Look, our commitment and belief in SALKturbo is rock solid. As is the strong confidence in the Limburg companies, knowledge institutions and employees. You know, Limburg has excellent trumps to excel on the economic front. We know where we need to step up our efforts and in what areas we need to keep up the good work. We’ve got what we need to get going. Various SALKturo projects have already been started up and many others are in the pipeline. Earlier this year, the Flemish government approved the implementation of four European support programs. Over the next six years, Limburg can count on €200 million of European support, which increases to some €340 million through co-financing from project partners. The fact that Limburg is fully behind SALKturbo, and the support of Europe and Flanders, we will definitely achieve our ambition of making Limburg a leading Flemish and European region.”