What impact does the second corona wave have on Belgian companies? Do you see a big difference from the first wave?
Koen De Leus: “Companies are better prepared. They had expected a 34% revenue loss was expected, but according to a survey by the National Bank, it’s about 17% in reality. The first lockdown was very unexpected, and there was a lot of uncertainty about what was possible and what wasn't. Now the rules are clearer. Among other things, industry and construction were not forced to shut down, for example. But in general the second wave has damaged the outlook. It’s an extra blow on top of the first, probably with more bankruptcies and more unemployment to follow.”

What policy can the government pursue to support Belgian companies?
Koen De Leus: “The government will certainly have to maintain the support measures for a while longer. Fortunately the vaccines are available, so we can expect our lives to return to normal in the second half of 2021. Until then the economy is operating with the brakes on. As long as that’s the case, support measures are crucial. Healthy companies are getting into trouble, not because something is wrong with their business model, but just because they were forced to close.”

“Those support measures could be more focused, especially on the companies that really need them to continue operating soundly after the crisis. The fact is that the crisis will inevitably separate the wheat from the chaff. When the support measures end, a lot of businesses will still have difficulty paying loans and social charges. A phased reduction in the support measures would probably cause fewer problems.”

Can government support be enough?
“No, there must also be a recovery plan. The government must look at it in the long term. Climate change is the greatest challenge in this. The government can do that, among other things, by supporting research and development; but also by stimulating the acceleration of digitization through efforts in terms of connectivity, networks and education."

Companies are suffering a 17% revenue loss during the second corona wave. “The government must focus on the long term, by supporting research and development and improving connectivity,” says Koen De Leus.

According to a study by Smith School, investments in digital infrastructure are a way for the Belgian government to revitalize the economy...
“That’s right, except that according to the Digital Economy & Society Index (DESI) Belgium is in ninth place in Europe. That’s several places lower than in recent years. We’re somewhat treading water digitally, while other countries are making progress. That’s why we’re dropping in the European ranking. For example, 5G really must come now. We have fallen behind there. We can’t miss that boat, as happened with e-commerce.”

“I would point out that many businesses still don’t know what’s possible with 5G in the area of IoT, real-time applications without latency, and so forth. The extra difficulty is probably that we mainly see the costs for 5G in the short term, while we must consider the real return over a period of ten years. Furthermore, 5G and IoT also have a role to play in the fight against climate change. New technology provides a boost in the greening of the economy and mobility. But it should all be less energy-intensive.”

We’re also working more digitally and remotely. Do you believe that has a positive effect on economic recovery?
“The switch to telework has taught us a lot. In the first lockdown we implemented a change in a week’s time that we would otherwise have made over three to four years. In many companies telework didn’t exist at all; there was no culture or infrastructure.”

“The fact that we have done that exercise will obviously help in the economic recovery. Studies show that productivity has increased substantially through the use of new tools. But I don’t think we will keep doing everything remotely. It’s still important to meet people to exchange ideas. Over time, I see more of a balance between home and office. But we already see that there is an impact. People prefer a house with a yard again instead of an apartment in the city center. Companies have too much office space now.”

How important is education and retraining of jobseekers in that context?
“Digitization and automation are accelerating enormously now. There’s a danger that the digital divide will expand as a result. Education has a crucial role to play here. Some sectors will shrink structurally. In non-food retail, e-commerce has risen by 30% in the first semester, and that share will increase steadily in the years to come. In the airline industry, the number of business travelers has dropped sharply. The time before the corona crisis isn’t coming back. A lot of people will have to retrain. Although that does not only include digital profiles. We also need bakers, nurses and drivers.”

Studied commercial sciences at the EHSAL. Since 2016 he has been Chief Economist at BNP Paribas Fortis.

KOEN DE LEUS