7.3.9RECOMMENDATION 9: POLICY MEASURES FOR SHORT-TERM ECONOMIC RECOVERY

Measures to slow down the spread of COVID-19 have largely halted the global economy. However, innovative companies usually seem to get through crises better.[1] During the 2008/2009 economic and financial crisis, innovative companies lost considerably fewer jobs than other companies[2]. In the context of the economic recovery following COVID-19 and a possible hard Brexit in the near future that could even exacerbate the crisis, VARIO advocates in the short term for:

1. An ambitious innovation policy that ensures that companies don’t interrupt their innovation activities during the crisis. Direct and indirect financial policy instruments can help overcome liquidity problems for innovation projects. This is especially true for small and medium-sized enterprises; larger companies often have more internal financial resources and better access to credit markets[3];

2. In line with the resolution of the Flemish Parliament (9 June 2020[4]) to support entrepreneurship and entrepreneurial spirit, with special focus on (early) startups and scale-ups to boost entrepreneurial confidence;

3. As Flanders is very export-sensitive, strengthening (high-tech) exports, including knowledge-intensive services should be a priority in the recovery of the Flemish economy;

4. Strategic innovative procurement and investments in large (innovation) infrastructure, such as green energy, CO2 reduction, mobility, ICT infrastructure, Health infrastructure…. to stimulate demand as soon as possible[5]. Although it is currently almost impossible to predict which innovations COVID-19 will produce, digital technologies will in many cases play an important role[6]. VARIO therefore asks the competent authorities, together with private partners, to prioritize and accelerate the roll-out of the 5G network;

5. In line with the resolution of the Flemish Parliament (9 June 2020[7]), VARIO asked to accelerate efforts to sharpen digital skills in the labor force. In addition - obviously taking into account possible (international) flare-ups of COVID-19 - a boost should be given to programs such as Erasmus+ to study abroad as well as internships in business for those who graduate during the period of COVID-19 and do not find a suitable job quickly enough due to the economic crisis.

[1] Santiago, Dachs & Peters (2020). Foster recovery from COVID-19 through science, technology and innovation. https://iap.unido.org/articles/foster-recovery-covid-19-through-science-technology-and-innovation
[2] Dachs & Peters (2014). Innovation, employment growth, and foreign ownership of firms. Research Policy 43(1), 214-232.
[3] Santiago, Dachs & Peters (2020). Foster recovery from COVID-19 through science, technology and innovation. https://iap.unido.org/articles/foster-recovery-covid-19-through-science-technology-and-innovation

[4] https://www.vlaamsparlement.be/parlementaire-documenten/parlementaire-initiatieven/1397773
[5] Santiago, Dachs & Peters (2020). Foster recovery from COVID-19 through science, technology and innovation. https://iap.unido.org/articles/foster-recovery-covid-19-through-science-technology-and-innovation
[6] https://www.en24.news/2020/06/covid-19-and-rd-in-companies-experiences-from-previous-crises.html
[7] https://www.vlaamsparlement.be/parlementaire-documenten/parlementaire-initiatieven/1397773