Can technology lead to a competitive advantage? A case study of Flanders using european patent data

Abstract

The study tries to analyze regional technological capabilities, linking technological positions to economic strength of the region. To measure this link, we correlate the EPO patent data with trade data to assess the degree to which technological advantages are translated into comparative advantages for the Flemish region in Belgium. The analysis for Flanders provides some interesting insights. Following the skewed distribution of firms, the technological areas in which Flanders is able to build, a strong position are very specific: printing technology, weaving technology, photography and recently also telecommunications. Weak positions are outspoken in car technology. Linking these strengths and weaknesses in technological areas to economic activity revealed an important mismatch between both. Most of the Flemish patents are in sectors without any comparative advantage, while most of the sectors where Flanders does hold a comparative advantage, like chemicals and pharmaceuticals, do not show strong technological advantages in terms of patents. Given the mismatch that was detected between technological positions and economic advantages, it is of crucial importance to better understand the (missing) links between the various actors in the regional innovation system. The analysis points out two important issues. The large and growing number of foreign applications to Belgian/Flemish inventors and the large number of subsidiaries of foreign firms among Belgian/Flemish applications illustrate the pervasiveness of the foreign dimension in the Belgian/Flemish technological landscape. Also very specific to the Belgian/Flemish situation, is the limited importance of universities or research centers in terms of patenting activities.