# Size and impact of the Brussels knowledge economy

## Brussels Studies fact sheet

*Ampleur et impact de l'économie de la connaissance à Bruxelles*

*Omvang en impact van de Brusselse kennis economie*

Tom Van Puyenbroeck, Johan Eyckmans, Peter Teirlinck, André Spithoven and Gilles Van Hamme

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**Electronic version**

URL: https://journals.openedition.org/brussels/8000

DOI: 10.4000/12sx4

ISSN: 2031-0293

**Translation(s):**

Ampleur et impact de l'économie de la connaissance à Bruxelles - URL : https://journals.openedition.org/brussels/8020 [fr]

Omvang en impact van de Brusselse kennis economie - URL : https://journals.openedition.org/brussels/8023 [nl]

**Publisher**

Université libre de Bruxelles - ULB

**Electronic reference**

Tom Van Puyenbroeck, Johan Eyckmans, Peter Teirlinck, André Spithoven and Gilles Van Hamme, "Size and impact of the Brussels knowledge economy", *Brussels Studies* [Online], Fact Sheets, no 198, Online since 01 December 2024, connection on 01 May 2025. URL: http://journals.openedition.org/brussels/8000; DOI: https://doi.org/10.4000/12sx4

This text was automatically generated on May 1, 2025.

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# Size and impact of the Brussels knowledge economy

## Brussels Studies fact sheet

*Ampleur et impact de l'économie de la connaissance à Bruxelles*
*Omvang en impact van de Brusselse kennis-economie*

Tom Van Puyenbroeck, Johan Eyckmans, Peter Teirlinck, André Spithoven and Gilles Van Hamme

## AUTHOR'S NOTE

This text draws on our more extensive study [Eyckmans et al., 2022] as prepared for VOKA Metropolitan. Additional discussions of the study can also be found here.

### 1. Knowledge-intensive activities in and around Brussels

1. What is the extent of knowledge activities in Brussels? Are they atypical when compared to the rest of Belgium? As simple as those questions may seem, knowledge-intensive activities can be defined in different ways [Galindo-Rueda and Verger, 2016; Marsili and Verspagen, 2002].

2. Official statistics of the OECD and Eurostat rely on different sector classifications to define “knowledge industries”. Rather than working with a predefined list, we can assume that every sector hosts knowledge-intensive jobs and carry out an empirical count. This more detailed empirical approach captures knowledge intensity within a sector by combining both the educational attainment and the occupational status of employed persons. By combining labour force survey data with social security statistics, we consider a person who has at least a short-cycle higher education degree and who has an International Standard Classification of Occupations (ISCO) status of
either “manager”, “professional” or “technician or associate professional” (i.e. ISCO levels 1, 2 and 3) as a knowledge-intensive worker within a sector [see Eyckmans et al., 2022].

3. Based on the detailed breakdown described above, we obtain an average number of 323 677 knowledge-intensive jobs in the Brussels-Capital Region (BCR), in the 2008-2020 period. This implies that, in the year 2020, 45,2 % of the jobs in Brussels can be regarded as knowledge-intensive. In comparative terms, this makes the BCR the most knowledge-intensive region in Belgium. Similar intensities are observed around Brussels, in the wider Brussels Metropolitan Area (BMA – in light blue in figure 1), but the numbers for the rest of the Flemish (31,3 %) and Walloon (30,9 %) Regions are considerably lower.

4. However, over the 2008-2020 period, compared to an average of 1,11 % at national level, the compound annual growth rate of *knowledge-intensive employment* was lowest for the BCR (0,51 %) and highest in the surrounding BMA (excluding Brussels). In order to better explain and understand the rates in Brussels, a shift-and-share analysis was carried out. This involves applying the growth rates of each sector in a reference area – in this case, defined as the rest of Belgium (Belgium without Brussels) – to the different territories (in this case, Brussels). The aim of the analysis is therefore to distinguish between a structural effect – which assumes that growth is the result of the sectoral composition of local employment – and a regional effect. The regional effect is measured by the gap between the theoretical growth in employment (deduced from sectoral composition) and the observed growth [Murray, 2010]. In the case of Brussels, sectoral composition is characterised by the strong presence of dynamic sectors on average, but these sectors perform less well in Brussels. The analysis for Brussels therefore indicates that, while several important knowledge-intensive sectors such as financial services, human health, professional, scientific, legal and accounting activities and activities of head offices are still overrepresented in Brussels, it is precisely in those sectors that Brussels lost ground in terms of employment growth relative to the rest of Belgium. The picture is a bit different with respect to added value, since sectors such as finance have experienced strong economic growth despite a significant decrease in the number of jobs in the 2010s.

## 2. Spatial distribution patterns of knowledge-intensive activities

5. A municipality-based mapping presents the geographical distribution of highly knowledge-intensive activities in Belgium. It illustrates the concentration of such activities in and around Brussels, far ahead of Antwerp, the second biggest Belgian city in terms of knowledge activities, as well as the high level of specialisation of Brussels in such activities.
<figure><img src="image_3.png" /><figcaption>Figure 1. Knowledge-intensive jobs according to municipality in 2018</figcaption></figure>

Source: ONSS 2018
Auteur: ULB - IGEAT 2022

These data are the sum of wage employment and self-employment. Wage employment is classified directly into NACE sectors. INASTI-RSVZ uses other categories; VTA data from the National Bank are used to convert these data into NACE classes.

See Eyckmans et al. [2022] for calculation details

6 This spatial distribution pattern can be further detailed according to specific sectors. It confirms the high concentration of several knowledge services in the BMA, with its large and qualified labour pool, attractiveness for international workers, connectivity at European and global level, airport and high-speed rail connections, etc.

7 However, spatial analyses also indicate that the geographical concentration of knowledge-intensive activities in Belgium is sector specific. Concentration in the BMA ranges from around half of all Belgian jobs in finance to a third in other sectors, such as legal and accounting services. Additionally, within the BMA there are very different locational patterns: some clusters of activities (e.g. finance) are mainly located in the city centre, while others may favour a location in the outskirts (e.g. the pharmaceutical industry, with large plants in Walloon Brabant, or large accounting firms located in Zaventem). Thus, our analysis underscores that - just as with other economic activities - the “Brussels” knowledge base implies an unequal geographical spread within Brussels, and necessarily implies that one should also take the relationship with the outskirts of Brussels into account.

### 3. Knowledge-intensive activities in Brussels and the creation of high- and low-skilled jobs

8 The impact of knowledge-intensive activities can be assessed through the lens of econometric models which examine the relationship between the growth of
knowledge-intensive employment and total employment, i.e. a so-called (relative) employment multiplier [see for example Moretti, 2010, or Dotti et al., 2021].

9. The estimated coefficient in a simple regression comes conceptually closest to the conventional definition of a multiplier. We find that each additional knowledge-intensive job in Brussels can be associated with the creation of another 2,12 jobs in the BCR. This is a relatively low figure when compared to other parts of Belgium (e.g. 2,44 jobs in the Flemish Region). However, it is important here to recall the relative nature of such multipliers: a lower ratio of total employment growth to total knowledge-intensive employment growth might as well be the result of a lower value for the numerator as the result of a comparatively high value of the denominator (and vice versa). And in fact, Brussels fares comparatively well, precisely in terms of the denominator (see above).

10. In reality, the change in knowledge-intensive jobs is not exogenous, and several variables have an impact on total employment change. By taking into account sector composition and economic and knowledge-related indicators, the coefficient associated with knowledge-intensive jobs remains statistically significant: all else being equal, in the BCR an extra job in a knowledge-intensive activity generates an additional job in total employment.

11. Employment multipliers can alternatively be derived directly from the interregional input-output tables of the Federal Planning Bureau. Consistent with the underlying economic (Leontief) model from which they are derived, these multipliers can be used to assess the employment effects following a demand shock which affects one or more knowledge-intensive sectors located in the BCR [Avonds et al., 2021].

12. A virtue of the input-output framework is that in addition to breaking down direct and indirect employment effects, we are able to see the intra- and interregional ("spillover") employment effects of such shocks. Moreover, based on a method discussed by Miller and Blair [2022, pp. 25-26], our empirical information on the knowledge intensity of sectors (see section 1) can be used to break down all of these effects further in the creation of knowledge-intensive jobs as well as less qualified jobs.

13. As an illustration, consider the job impact of an additional 10-million-euro demand for particular knowledge-intensive sectors in Brussels. The ensuing employment effects for Belgium as a whole range from 131 extra jobs in the arts, entertainment and recreation sector (NACE 90) to 37 extra jobs in the financial services industry (NACE 64). The large majority of these extra jobs are in the BCR: 88 % in NACE 90 and 75 % in NACE 64¹.

14. Next, consider a 1 % demand shock affecting all knowledge-intensive sectors. This would lead to about 3000 extra jobs (the exact number depends on the definition of the relevant sectors discussed in section 1). Table 1 shows more details for the case in which the OECD definition is used to identify the sectors experiencing a demand shock.

<table><caption>Table 1. Aggregate employment impact of a 1 % increase in final demand of all knowledge-intensive sectors in Brussels (using the OECD definition)</caption><thead><tr><th>Extra jobs:</th><th>Knowledge-intensive</th><th>Non-knowledge-intensive</th><th>Total</th></tr></thead><tbody><tr><th>In BCR:</th><td>1618</td><td>1092</td><td>2710</td></tr><tr><th>• Initial effect</th><td>1406</td><td>860</td><td>2266</td></tr></tbody></table>
<table><tr><td>• Indirect effects</td><td>212</td><td>232</td><td>444</td></tr><tr><td>In the Flemish Region</td><td>118</td><td>248</td><td>366</td></tr><tr><td>In the Walloon Region</td><td>59</td><td>126</td><td>185</td></tr><tr><td><strong>TOTAL Belgian Economy</strong></td><td><strong>1795</strong></td><td><strong>1466</strong></td><td><strong>3262</strong></td></tr></table>

15

This and similar aggregate approaches show that extra jobs are created predominantly in the Brussels-Capital Region itself, with room for noteworthy interregional job creation spillovers. Furthermore, even if our impact analysis is such that these jobs are generated by knowledge-intensive sectors, a substantial share of the extra employment within Brussels (about 40 %) actually concerns less knowledge-intensive labour².

## BIBLIOGRAPHY

AVONDS, L., HERTVELDT, B. and VAN DEN CRUYCE, B., 2021. *Opmaak van de interregionale input-outputtabel voor het jaar 2015: databronnen en methodologie*, FPB WP 07-21.

DOTTI, N.F., SPITHOVEN, A., WAUTELET, A. and YSEBAERT, W., 2021. The “certain” returns from expenditures for “uncertain” activities: a local multiplier approach to evaluate regional R&I policy. In: *European Planning Studies*, 29(2), 389-409.

EYCKMANS, J., SPITHOVEN, A., TEIRLINCK, P., VAN HAMME, G. and VAN PUYENBROECK, T., 2022. The knowledge base of Brussels. In: *BSI/VOKA*.

GALINDO-RUEDA, F. and VERGER, F., 2016. OECD Taxonomy of Economic Activities Based on R&D Intensity. In: *OECD Science, Technology and Industry Working Papers*, no 2016/4. OECD Publishing.

MARSILI, O. and VERSPAGEN, B., 2002. Technology and the dynamics of industrial structures: an empirical mapping of Dutch manufacturing. In: *Industrial and Corporate Change*, 11(4), 791-815.

MILLER, R. E. and BLAIR, P. D., 2022. *Input-output analysis: foundations and extensions* (3rd edition). Cambridge University Press.

MORETTI, E., 2010. Local multipliers. In: *American Economic Review*, 100(2), 373-377.

MURRAY, A.T., 2010. Quantitative geography. In: *Journal of Regional Science*, 50(1), 143-163.

## NOTES

1. These numbers were calculated using the regional IO-multipliers published by the Belgian Federal Planning Bureau and tables prepared under the “Agreement for the compilation of monetary interregional input-output tables for Belgium for the year 2015” between the FPB and BISA, VSA/EWI and IWEPS. See Eyckmans et al. [2022] for more details.
2. Of course, the underlying Leontief model is well established but has its limitations. Being a stylised ("fixed input proportions") production model, it does not consider capacity constraints, labour market pressures, input substitution, etc. separately. In other words, many real phenomena in our economies today are not considered. When considering large shocks such as the one displayed in the table, such limitations should be taken into account.

ABSTRACTS

We analyse the extent, growth and spatial distribution of knowledge-intensive employment in the Brussels Capital region and larger Brussels metropolitan area and compare it to its neighbouring geographical entities. We look at its impact on total employment, using both econometric and input-output analysis. Close to one out of two jobs in Brussels can be regarded as knowledge intensive. Over the period 2008-2020, the compound annual growth rate of knowledge-intensive employment was highest in the surrounding Brussels functional metropolitan area. A strong concentration of several knowledge services can be found in the Brussels metropolitan area, with different location patterns. Finance remains very central in the Brussels metropolitan areas, while others favour peripheral location, as it is the case for the pharmaceutical and accounting industry. A negative total employment growth rate differential between Brussels and the rest of Belgium is due to an industry-mix effect. Each additional knowledge intensive job in Brussels can be associated with the creation of another two jobs. For jobs generated by knowledge intensive sectors, forty percent of the extra employment within Brussels is accruing to less knowledge intensive labour.

Nous analysons l'ampleur, la croissance et la répartition spatiale de l'emploi à forte intensité de connaissances dans la région de Bruxelles-Capitale et dans l'agglomération bruxelloise au sens large, et les comparons à celles observées dans les entités géographiques voisines. Nous en examinons l'impact sur l'emploi total, au moyen d'une analyse économétrique et d'une analyse entrées-sorties. Près d'un emploi sur deux à Bruxelles peut être considéré comme étant à forte intensité de connaissances. Pour la période 2008-2020, le taux de croissance annuel composé de l'emploi à forte intensité de connaissance le plus élevé a été enregistré dans l'aire urbaine fonctionnelle de Bruxelles. L'agglomération bruxelloise présente une forte concentration de plusieurs services à forte intensité de connaissances, avec des schémas d'implantation différents. Le secteur financier reste très présent dans les centres-villes de l'agglomération, tandis que d'autres activités s'implantent plutôt en périphérie, à l'instar de l'industrie pharmaceutique et du secteur de la comptabilité. L'écart négatif du taux de croissance de l'emploi total entre Bruxelles et le reste de la Belgique est dû à un effet de mixité sectorielle. Chaque nouvel emploi à forte intensité de connaissances à Bruxelles peut être associé à la création de deux emplois supplémentaires. En ce qui concerne les emplois générés par les secteurs à forte intensité de connaissances, 40 % de ceux créés à Bruxelles concernent une main-d'œuvre à moindre intensité de connaissances.

In dit artikel analyseren we de omvang, groei en ruimtelijke spreiding van de kennisintensieve werkgelegenheid in het Brussels Hoofdstedelijk Gewest en het grotere Brussels grootstedelijk gebied en vergelijken we die met de omliggende geografische entiteiten. We onderzoeken de impact van de kennisintensieve activiteiten op de totale werkgelegenheid aan de hand van zowel
een econometrische analyse als een input-outputanalyse. Bijna een op de twee banen in Brussel kan beschouwd worden als kennisintensief. Voor de periode 2008-2020 was de samengestelde jaarlijkse groei van de kennisintensieve werkgelegenheid het hoogst in het omliggende Brussels grootstedelijk gebied. Er is een hoge concentratie van verschillende kennisdiensten te vinden in het Brussels grootstedelijk gebied, met uiteenlopende locatiepatronen. De sector van de financiële dienstverlening blijft zeer centraal in het Brussels grootstedelijk gebied, terwijl andere sectoren de voorkeur geven aan een locatie in de rand, zoals farma en accountancy. Het negatieve verschil qua totale werkgelegenheidsgroei tussen Brussel en de rest van België is toe te schrijven aan het effect door de mix van sectoren. Elke bijkomende kennisintensieve baan in Brussel kan in verband gebracht worden met de creatie van nog eens twee banen. Voor banen die gegenereerd worden door kennisintensieve sectoren, heeft 40 % van de extra werkgelegenheid in Brussel betrekking op minder kennisintensieve arbeid.

## INDEX

**Subjects:** 6. économie - emploi

**Keywords:** economic development, employment, job market, knowledge, research and development

**Mots-clés:** développement économique, emploi, marché de l'emploi, connaissance, recherche et développement

**Trefwoorden** economische ontwikkeling, werkgelegenheid, arbeidsmarkt, kennis, onderzoek en ontwikkeling

## AUTHORS

### TOM VAN PUYENBROECK

Full professor of economics at KU Leuven and academic director of the KU Leuven Brussels campuses. See e.g. Verbunt, P., Rogge, N. and Van Puyenbroeck, T., 2022. Non-parametric estimation and evaluation of capability sets. In: *Oxford Economic Papers*, Vol 74, no. 1, pp. 265-296.
tom.vanpuyenbroeck[at]kuleuven.be

### JOHAN EYCKMANS

Full professor of environmental Economics, KU Leuven, Cedon Research Group. Member of KU Leuven Institute for Energy and Society and SIM², KU Leuven Institute Sustainable Metals and Minerals. See e.g. Chapman, D., Eyckmans, J. and Van Acker, K., 2024. The impact of demand-side strategies to enable a more circular economy in private car mobility. In: *Sustainable Production and Consumption*, no. 49, pp. 263-275.
johan.eyckmans[at]kuleuven.be

### PETER TEIRLINCK

Full professor of Innovation Management, Department of Management, Strategy and Innovation, at KU Leuven. Vice-dean for International affairs at Faculty of Economics and Business, KU Leuven. Policy Advisor at Belgian Science Policy Office. Recently published: Zhang, L., Teirlinck, P., Su, T. and Yu, Y., 2024. How to configure the supply chain to stimulate firm innovation performance? In: *International Journal Of Production Economics*, no. 277.
peter.teirlinck[at]kuleuven.be
ANDRÉ SPITHOVEN

Policy Advisor at Belgian Science Policy Office, Senior Researcher at VUB, Visting professor at UGent. Expert in regional economics, innovation studies and policy analysis. Recently published: Spithoven, A. and Phalet, E., 2024. Wage Subsidies, Slack Resources and Behavioural Additionality: Evidence from Universities. In: *Higher Education Policy*, pp. 1-22.
aspitje[at]yahoo.com

GILLES VAN HAMME

Professor of economic geography at the Université libre de Bruxelles, focusing on European territorial globalisation dynamics and European metropolitan dynamics. Recently published: Van Hamme, G., 2024. The Regionalization–Globalization Pair: A Reading of the Evolution of World Trade. In: *Regionalization of the World: Comparing Regional Integrations*, no. 67.
gilles.van.hamme[at]ulb.be