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Entrepreneurship in Belgium : is the situation really so worrying ?

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Recent articles in newspapers pointed the decrease of firm creation in Belgium, especially in the Southern part of the country when the creation rate was said to have decreased 11.2%

We downloaded the figures from BeStat, the official repository of statistical figures for Belgium, and the reality looks slightly different. To evaluate the number of new firms, we used as proxy the application for VAT numbers.

Contradicting articles : what is the actual situation ?

Several articles in the last weeks that seemed to us to be contradicting and we wanted to investigate where was the truth.

Several articles appeared mid-September to alert on a declining number of firms in Belgium, especially in the southern part of the country.

In this article La Libre announced in particular that firm creation had decreased 11.3% in Wallonia  whereas in increased 2.14% in Flanders and remained stable in Brussels (article in French).

In another article published on October 4th, the same journal announced a sharp increase of firm creations in Belgium (article in French).

You can wonder where is the truth … we compiled and analyzed the figures of the Belgian National Bank for you. Read further.

2013 was a bad year in Flanders ; 2014 seems to be very good

If you look at the yearly graphs we compiled for you, you can see first of all that 2013 was indeed a really bad year in Flanders where the number of firm creations plunged. It remained stable in Brussels and Wallonia after a slight decline in 2012.

If we take a closer look and analyze the figures per semester, we see a sharp increase in all regions during the first semester of 2014 and especially in Flanders where a record has been hit. The exceptional figure of the first semester in Flanders is actually due to an incredibly high number of first registrations in January 2014. 13162 creations took place, half of them being from individuals who applied for an entrepreneurial status.

Increasing number of companies in difficulty

The figures of firms in difficulties (article in French) were also released in September by the CED (Center for Enterprises in Difficulty) and are more than worrying. The number of firms in troubles increased 6% in Brussels.

28% of the firms did not survive more than 24 months, and 52% of them died before 52 months.

Interestingly one fourth of the companies analyzed by the CED were more than 10 years old and suffered from a lack of adaptation to the ever changing market conditions. Another evidence that one needs to permanently question its business model, look for differentiation. Needless to say that under such conditions, performing a market research is more than recommended and will prevent you from failing (too quickly).

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Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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