Can digital revive the Belgian Economy?

Transcription

1 Can digital revive the Belgian Economy? Filiep Deforche Senior Partner and Managing BCG Trends Summer University, June 10, 2016

2 Can digital revive the Belgian economy? a new world 1 the opportunity 2 the call for action Belgian Internet Economy - F Deforche - BRU.pptx 2

3 a new world We live in an exponential world log (price) ($) 1,000, , , ,000 40,000 20,000 22,000 10,000 1, Industrial Robots Drones Sensors (3D Lidar) 3D Printing Year Belgian Internet Economy - F Deforche - BRU.pptx 3

4 a new world Digital has many facets IoT Cloud Mobile Multitasking Speed AI/ Robots Technology Social Personalization New customer habits Simplicity 3D printing Analytics Augmented reality Sharing Communication Availability Sharing economy Pro-sumers Safety Generation Data Consumption Agile Collection Analytics Visualisaton Rental economy Ecosystem Subscription Exponential organization New ways of working Customer centricity New business models Open innovation Lean start up Market places On demand Freemium Belgian Internet Economy - F Deforche - BRU.pptx 4

5 a new world Digital is reshaping the economy Digital DIY E-commerce Industry 4.0 Sharing economy through digital platforms Services 4.0 (Fintech) Belgian Internet Economy - F Deforche - BRU.pptx 5

6 A a new world E-commerce in Belgium lagging 2014 share of online retail market in country retail market (%) 25 23% 20 16% 15 14% 13% 13% 13% 13% 12% 11% 10 9% 9% 9% 5 6% 5% 4% 4% Belgian Internet Economy - F Deforche - BRU.pptx 6

7 A a new world... leading to an average digital economy Bn (2014) % of GDP Bn e-commerce Consumption 5.0 Investment 2.7 Government spending 18.6 Exports Imports Internet economy Ireland 22.8% UK 8.4% Finland 8.2% Sweden 8.2% Denmark 7.6% Netherlands 6.8% Germany 5.1% France 5.0 % CAGR '10-'14 17% 1% -1% 9% 9% 9% 1. Includes 2.3Bn import and 4.4 Bn Belgian e-commerce reflecting 34% cross-border e-commerce. Note: export/imports include e-commerce and internet share of IT goods and services import and export; E-commerce includes M-commerce Source: EIU, Eurostat, WorldBank, Gartner, Ovum, annual reports, BeCommerce, Ecommerce Europe, UN Comtrade, WTO, BCG analysis Belgian Internet Economy - F Deforche - BRU.pptx 7

8 B a new world Key industrial innovations fuel digital economy Big Data and Analytics Comprehensive evaluation of data Real-time decision-making Advanced Robots Robots with integrated sensors Standardized interfaces Cloud and Cyber-security Managing data in open systems Network security of linked machines Industrial Internet Network of machines and products Network objects communication Horizontal/Vertical Integration Cross-company data integration Fully automated value chain Industry 4.0 Simulation Additive Manufacturing Spare parts and prototyping Decentralized to reduce transport Augmented Reality Maintenance and logistics Information display Simulation and optimization of value networks Test and optimize machine settings Belgian Internet Economy - F Deforche - BRU.pptx 8

9 B a new world Belgian productivity increase lagging Eur average Increase in GDP per hour worked between 2010 and % 5.8% % 3.1% 3.1% 2.8% 2.6% 2.2% 1.7% 1.0% 0.7% 0.6% 0.6% 0.4% 0.3% % Source: OECD Belgian Internet Economy - F Deforche - BRU.pptx 9

10 C a new world Emergence of strong BE Fintech player landscape FinTech Ecosystem Payments Security Cash management Financing Data and Investments Insurance Enablers analytics Source: Quid, Crunchbase, Belgium Fintech Group, Sway.com, BCG research Belgian Internet Economy - F Deforche - BRU.pptx 10

11 C a new world... thanks to strong VC funding Relative importance on GDP of VC investments in top 10 countries (%) 0,15 0,12 0,10 0,09 0,09 0,05 0,06 0,05 0,02 0,02 0,02 0,00 SE IR UK BE NL FR DE PL ~ 300M received VC funding '00-'15 Note: top 10 countries in Europe considered, Russia and Cyprus excluded. Funding over period 2000 to 2015 Source: Eurostat, Quid, BCG DV, BCG analysis Belgian Internet Economy - F Deforche - BRU.pptx 11

12 Can digital revive the Belgian economy? a new world 1 the opportunity 2 the call for action Belgian Internet Economy - F Deforche - BRU.pptx 12

13 the opportunity BCG assessment: Internet economy 37Bn by '20 Belgian Internet Economy at 5.2% of GDP in Euro Bn... can grow to 8.4% of GDP in 2020 at 12% growth per year... Euro Bn Consumption 12.1 Consumption % Investment 5.0 Investment 5.4 1% Government Spending 2.7 Government Spending 2.7 0% Exports 10.4 Exports % Imports 11.5 Imports % Internet Economy 18.6 Internet Economy % % of GDP 5.2% 8.4% '14-'20 CAGR Note: All growth rates are nominal. i.e. including inflation. Source: EIU, Euromonitor, Eurostat, Broker reports, Agoria, Gartner, Ovum, National Institute of Statistics and BCG analysis Belgian Internet Economy - F Deforche - BRU.pptx 13

14 the opportunity Important local opportunity for e-commerce... Bn + 7.8Bn E-commerce (excl. import and export) Rest of internet economy (excl. e-commerce) 0 Share of cross-border e-commerce 2014 internet economy 2014 updated with average European level of cross-border e-commerce 34% 15% 2014 updated with reduced cross-border and increased online presence and spend 15% Online shoppers as % of population Average spend per online shopper 54% 68% 1 1,100 1, Western European average Source: Ecommerce Europe, BCG analysis Belgian Internet Economy - F Deforche - BRU.pptx 14

15 the opportunity... and Digital Single Market with huge further upside GDP (B EUR) % yoy growth, from 1.6 to 3.2% p.a. 450 Potential for Belgium Increased GDP CAGR per frontrunner country Frontrunner The Netherlands GDP CAGR '14-'20 2.2% Growth increase 94% Potential GDP CAGR 4.3% 2020 GDP (B EUR) Belgium 1.6% 106% 3.2% Denmark 1.8% 83% 3.3% Sweden 2.8% 42% 3.9% 35.5 Finland 0.9% 96% 1.8% ~1.6% annual growth Business as usual Estonia 2.5% 63% 4.1% ~2.4% annual growth ~3.2% annual growth Full DSM Full DSM & accelerated digitization Luxemburg Ireland Frontrunners tot. 3.1% 160% 7.9% 4.1% 46% 6% 2.2% 80% 3.9% Source: BCG study and report on "Digitizing Europe" June Belgian Internet Economy - F Deforche - BRU.pptx 15

16 the opportunity BCG assessment: Industry 4.0 with major impact 5 Bn productivity gains by Bn industry output Bn add'l revenues by 2020 Source: BCG.perspectives: Industry 4.0, BCG analysis Translating into 10Bn of additional GDP by Belgian Internet Economy - F Deforche - BRU.pptx 16

17 Can digital revive the Belgian economy? a new world 1 the opportunity 2 the call for action Belgian Internet Economy - F Deforche - BRU.pptx 17

18 the call for action Realizing potential will require Belgium to create enabling environment 1 Belgium should persevere on its ambitious Digital Agenda... Support VC and investments Develop talent and education Build demand, transparency and trust Establish egovernment & Infrastructure Harmonize taxes and policy support 2 in time for the DSM to expand beyond the Belgian market The Digital Single Market will open up international ecommerce opportunities... Provided that we can counter the import/export balance Belgian Internet Economy - F Deforche - BRU.pptx 18

19 the call for action Threat or opportunity? Yes we can Offline to online retail: local or import? Retail and logistics employment Export revenues Delocalisation due to labor arbitrage and productivity issue? Manufacturing employment, Industry 4.0 products/services Productivity gains translated in export revenues New business models in FI Local bank revenues and employment Digital bank Belgian Internet Economy - F Deforche - BRU.pptx 19

20 Thank you bcg.com bcgperspectives.com Belgian Internet Economy - F Deforche - BRU.pptx 20