Government and industry are placing increasing emphasis on research and development in areas that are traditional in nature (such as logistics), discovery-based (such as the life sciences) or futuristic (such as nanotechnology).

Spending on R&D in Belgium as a whole is growing as a percentage of GDP, reaching 2.33% last year. In Flanders, business accounts for 73% of that spend.

In specific areas such as the ICT cluster close to Leuven University, R&D spending is among the highest in Europe at $7011 per employee. The life sciences are also strongly represented in R&D spending, notably through Janssen Pharmaceutica, but also through other pharmaceutical, medical device and medical imaging companies along with more than 40 biotech firms. Some 16% of patents held in Flanders are in the life sciences.

Other major sectors such as the automotive industry also have strong research bases in the region, much of it in-house but with the universities and specialist research institutes all playing a role that is often linked closely with companies. Research cooperation between universities and companies in Belgium is relatively high at 4.5 on a scale of one to seven (Global Competitiveness Report, 2005).

Leuven and Ghent universities are ranked in the 10 best research centers in the world (The Scientist, 2003) while the independent research center IMEC, also at Leuven, is a world leader in nanotechnology and microelectronics.

To encourage innovation and research and development, Flanders offers companies a variety of incentives that include as tax breaks for R&D personnel and funding for specific projects proposed by businesses.