This means 40,000 additional jobs in all that will be created on top of the replacements of those who change jobs or retire, assuming that the sector can maintain or strengthen its competitive position and the labour market allows for upward mobility through the permanent training of all employees.
Exactly one week before the Prime Minister's "state of the union", Agoria wants to reach out with this "new deal" to the various governmental authorities in our country to ensure together that at least eight out of ten people aged 20 to 64 will have a job by 2030. The technology sector, which accounts for 315,000 jobs, is the first sector to make such a commitment.
Bart Steukers, CEO of Agoria: "1,500 more jobs than at the outbreak of the coronavirus pandemic, a fifth more exports than last year, production that is almost back to the level of 2019... when you look at the state of the technology sector, it would appear that the coronavirus crisis is gradually being digested. What's more, we could have created a lot more jobs and growth, but there is a huge brake on our level of activity due to supply problems and the record number of vacancies. Today we have 15,860 open jobs we cannot fill, and one reason is that one in four people who are perfectly capable of working are simply not looking for work. The scarcity in the labour market is now a much greater challenge for us than the coronavirus crisis. That has really surprised me the most in the first six months that I have been CEO of Agoria."
"After all, the technology industry is back at the 2019 level in terms of economic activity. It has digested the coronavirus crisis well and is looking to the future with confidence. Supply problems and a record number of job openings are nonetheless threats to further economic growth and wealth creation. In times of rising public debt, there is a third way besides reducing government spending and possible increases in taxes, namely every percentage in improving the inactivity rate brings in 2 billion euros. However, sustainable labour productivity through accelerated implementation of new technologies (such as the superfast 5G mobile Internet) and new forms of working, also deserves more attention. This is absolutely necessary to fill these new jobs with value," Bart Steukers believes.
Employment in the technology sector was never higher in the past decade than it is now. At the end of March 2021, exactly 314,398 people worked for 15,359 employers in the technology sector in our country. That is 1500 more than at the start of the coronavirus crisis. Three-fifths work in the manufacturing industry, two-fifths in the service sector (mainly IT solutions).
Not only have there never been more people working in the tech sector in the past ten years than today, but the number of vacancies is also at its highest level ever, namely 15,860. Since the outbreak of the pandemic, an additional 3,750 job openings have been added. This corresponds to a loss of turnover of €1.5 billion.
Bart Steukers: "The number of open jobs is enormous. Anyone who wants to work can work for us. We must do even better in activating enough people for the labour market and linking the available candidates to the vacancies. The inactivity rate in our country at this time stands at 26%. That means that in the 20- to 64-year-old age category, our country today has as many as one in four, or 1.6 million people, not officially working and not looking for work. This puts us among the top in Europe. That 26% inactivity must fall back to 18%. Our study centre has calculated that a drop of one percent in the inactivity rate could reduce the annual government deficit by €2 billion. After all, this is going to provide more tax revenue and less replacement income. So the ministers who are considering the budget these days know what has been done."
The story behind the figures
New deal: 16 additional jobs every working day by 2030 while maintaining competitiveness
Not only does the budget have to be in order, but the various governmental authorities also want to achieve an employment rate of 80% by 2030. That is why Agoria, as Belgium's largest sector federation, is also expressing its commitment today. The technology sector will create and fill sixteen additional jobs every working day between the beginning of 2020 and the end of 2030. Together, 40,000 additional jobs will be created on top of the replacements for those who change jobs or retire -- provided that the sector can maintain or strengthen its competitive position and provided that the labour market allows for sufficient upward mobility through continuous training of all employees.
The competitive position must not be eroded by all kinds of dangers, such as inflation, tax levels or wage costs. Exactly one week before the Prime Minister's "state of the union", Agoria wants to reach out to the various governmental authorities in our country with this "new deal" so as to ensure that by 2030 at least eight out of ten people between 20 and 64 have a job.
For Bart Steukers, who also sits on the VDAB board of directors, 'Be The Change' is not just a study or project, but also a call to usher in change together. He is consequently calling on all other stakeholders (governments, trade unions, education and training initiatives, career funds, employment organizations, activation initiators and other sectors) at this time to make similar commitments and to join forces in order to meet the challenge of having eight out of ten people of working age in work by 2030. "Only together are we Be the Change," the saying goes.
Business confidence is at record levels and above the long-term average. "There is intrinsic optimism in our industry so companies are investing in the future, namely their human capital. There is work for everyone with us. Fortunately, the areas of expertise in our sector are also in demand in other sectors. There is a future for everyone -- just think of the societal challenges like digital or green transformation. With us, everyone gets education or training. We make quite a commitment to society," says Bart Steukers.
Activity back to pre-coronavirus level
In 2021, a record turnover of €137 billion will be generated, higher than the €132 billion figure in 2019 – quite a feat after already five consecutive years (2014-2018) that the Belgian technology industry has grown.
In the first six months of the year, activity increased by 7 percent. The best performers were first processing, foundries and non-ferrous products (33%), metal products (15%) and mechanical engineering (14%). Only telecom showed a limited increase of 2%.
Exports are up by a fifth year-on-year; market share remains stable
The Belgian technology exports are strengthening their European position. In the first half of 2021, exports rose by 22% compared to the first half of 2020. The largest increases are in South America (plus 30%) and the European Union (plus 24%). In 2020, exports were still down 8% compared to 2019. Our exports amounted to some €80 billion. Exports fell mainly to East Asia, by 14%.
Exports may have fallen last year, but the market share of the Belgian technology industry still rose significantly, namely by a third of a percentage point. For this year, Agoria estimates that the market share is down very slightly by 0.04 percentage points because our growth engine is sputtering a bit due to supply problems.
Potential brakes on growth: inflation, finance, supply and vacancies
Agoria also identifies four potential brakes on the sector's growth, to wit inflation, public finances, supply problems and the record number of vacancies.
For example, inflation, or the rise in prices in the economy as a result of sharply rising gas prices, followed by a deterioration in competitiveness due to the automatic pegging of wages to the index, is far from innocent. The calculation of the available margin by the Central Business Council for indexations in 2021 and 2022 was 2.85%. Today it looks like we are heading for an indexation of at least 3.8%. This is an overshoot of at least 0.95% of what was provided for in the wage standard. If we do not pay attention, our competitive position risks deteriorating seriously. That is why Agoria underscores the importance of the law for the promotion of employment and for the preventive safeguarding of competitiveness, the Act of '96, as it is known. For Agoria, this piece of legislation cannot be undermined, so both the ex-ante correction mechanism and the ex post safety margin are of the utmost importance.
Agoria also points to public finances. The national debt increased by €70 billion between the end of 2019 and the end of June 2021, from €467 to €537 billion. Agoria does not want to erode competitiveness through higher taxes, but rather through less spending. "Everyone talks only about spending less or raising taxes. But there is also a third way, namely striving for activation," says Bart Steukers.
The supply problems around chips, steel, non-ferrous metals, wood, logistics ... also remain valid. Steel, aluminium and copper prices nearly doubled between May 2020 and May 2021. Chip supply is still uncertain until well into 2022. Delivery times of five months are becoming the "new normal." This means additional cost, additional uncertainty, and additional pressure on the supply chain. Agoria expects only a slow decline in these timescales. Closures due to supply problems have meant a loss of €1 billion in turnover, according to Agoria.
Vacancies on the labour market are at their highest level ever. The Belgian economy is also creating jobs faster than expected after the coronavirus. As many as 80,700 were added between the second quarter of 2020 and the second quarter of 2021.. To reach an employment rate of 80% in our country by 2030, we need to create a 16,000 jobs net every quarter until the end of 2030, including 1,000 in the technology industry. In our country, the employment rate in 2020 was 70%, in our three main trading partners Germany, France and the Netherlands 77.4%, and in the European Union 72.5 percent. According to Agoria, a decrease in the number of people who are not working and not looking for work (the inactivity rate) is not only good for the employment rate itself (because fewer vacancies), but also for our competitiveness against other European countries, and also for the affordability of our social security and public finances.
Graph: vacancies in the technology sector (source: Agoria)