Belgian defence companies want banks to give them greater access to loans that will allow them to invest more, says the Belgian federation of technology businesses Agoria, which also represents a lot of defence companies. Agoria also notes Belgium’s export rules for military goods are particularly strict.
‘When I talk to company executives, they say they have difficulty accessing loans,’ says Agoria’s defence expert Pascal Acket. ‘Banks are still reluctant to give loans to the defence industry.’
‘Yet they desperately need these loans for the major investments they need to make today to grow and face international competition,’ Mr Acket explains.
‘Strict export rules’
In addition, the federation is voicing concerns about the way export licences for military goods are regulated in Belgium. ‘This is now a regional power,’ says Acket. Flanders, Brussels and Wallonia each have their own departments that grant export licences for military goods.
‘We see that the different regions approach this differently. That creates uncertainty for our companies.’ According to Acket, the different regions are also ‘much stricter than other European countries’.
Agoria also complains about a lot of ‘paperwork for our SMEs’. ‘They want to be able to engage in research and development and not to have to deal with filling in paperwork.’
Small and specialised
According to Acket, the Belgian defence industry mainly consists of ‘specialised niche companies’. Looking at the number of jobs, ‘44 per cent of our defence industry is in Wallonia, with rather traditional defence companies, making weapons and vehicles,’ says the defence specialist.
‘Flanders, which also represents 44 per cent of the total, is mainly committed to research and development. And then there is Brussels, with about 12 per cent of our defence business, which specialises in aerospace, aviation and cybersecurity.’
Most Belgian defence companies are small: 73 per cent have fewer than 50 employees and they supply various sectors.
Prospect of more jobs
If you only consider direct suppliers of military goods and services to the armed forces, the Belgian defence industry comprises more than 80 companies, accounting for 2 billion euros in annual turnover and 5,000 direct jobs.
But if you take the broader picture of all companies and organisations active around defence activities into account, Agoria says it involves 892 companies with 5 billion euros in turnover, and 16,300 direct jobs from these defence activities.
‘If the defence and security industry manage to double in size, it could also create more than 4,000 direct jobs and another 4,000 indirect ones,’ Agoria's study service estimates.