Brainport Monitor 2019 EN

BRAINPORT MONITOR 2019 SUMMARY – 12TH EDITION

BRAINPORT EINDHOVEN FUTURE FIT

OVERALL PICTURE Following a strong revival after two crises, the Dutch economy continued to grow at a standard rate in 2018. As was the economy in Brainport Eindhoven (3.3%), which exceeded the Dutch average economic growth (2.6%).

The economic growth in the region is driven by the industry. For example, the highest level of goods ever was exported in 2018: €31.9 bn.

An increase of 17.7% compared to 2017 and the strongest growth in the past decade.

In addition, the gross value added growth in the region (+12.2%) was twice as high as the national gross value added growth (+6.1%). In 2018, Germany no longer was the largest export market in the region in terms of export value. It was surpassed by the United States and China.

The economic prosperity is also reflected in Brainport Eindhoven’s increasing innovative strength. In 2018, the highest number of patent applications (7,140) from the Netherlands ever were submitted to the European Patent Office. Northern Brabant,

with companies like Philips, Signify, NXP and ASML, was responsible for 50.3% of the total number of Dutch patent applications. Listing the province fifth in the ranking of European regions with the most European patent applications.

Although regional and national labor participation were both increasing at the same rate and the unemployment rate reverted to the level it was before the economic crisis, the continuous economic growth resulted in ever more tension on the labor market. Especially in the tech and IT sector, where many available jobs remained unfilled. In 2018, more than a quarter (27.6%) of the total number of available jobs in Brainport Eindhoven had fallen vacant in the tech and IT sector. In 2018, the number of tech and IT vacancies in the region grew more than 1.5 times as fast as the tech and IT vacancies in the Netherlands.

Despite a decrease in the number of foreign migrants, 2018 reported the highest net migration rate of the past decade. This was

the result of the national migration rate, which showed positive development again after a decline of several years. That same year, Northern Brabant counted 10,600 international students, of which 3,400 students studied technology. Most of these tech students no longer came from Germany, but from Bulgaria instead.

In addition to the standard indicators, we have been looking into the region’s sustainable well-being, as measured by Telos. According to Telos’ method, Brainport Eindhoven’s sustainability score in 2018 was 48.6. This was higher than the Dutch average of 46.9. Looking at the social-cultural (+2.2), ecological (+5.6) and economic (+3.8) capitals, Brainport Eindhoven has developed positively compared to 2014.

In addition to this summary, we also have a full report in Dutch with more than 30 statistics.

Please go to www.brainporteindhoven.com/ monitor for the full report.

OVERVIEW IN NUMBERS ECONOMIC GROWTH 2018

PRIVATE R&D EXPENDITURES 2016 Brainport Eindhoven The Netherlands

WITH 3.5%, THE REGIONAL UNEMPLOYMENT RATE HAS REVERTED TO THE LEVEL OF BEFORE THE ECONOMIC CRISIS.

GROSS VALUE ADDED INDUSTRY TOP 3 THE NETHERLANDS in bln. euros

3.3%

2.6%

Brainport Eindhoven

The Netherlands

23.1%

Total €8.2 billion

TOP 3 JOINT PUBLICATIONS UNIVERSITIES AND INDUSTRY (share of all academic publications, 2014-2017) 15.8% 10.5% 9.2%

TOP SECTOR HTSM WAS RESPONSIBLE FOR MORE THAN ONE THIRD OF THEBANEN TOTAL IN JOBS CREATED EINDHOVEN IN BRAINPORT HET AANTAL BRAINPORT EINDHOVEN, ALL JOBS IN THIS TOP SECTOR STIJGT IN11.2% 2017OF MET RUIM 11.000 BANEN, WEREEEN LOCATED IN BRAINPORT EINDHOVEN. STIJGING VAN 2,8%, DE GROOTSTE GROEI IN 10 JAAR

PEOPLE

“The world is changing at lightning speed.

Digitalization, globalization and demographic changes are having a profound impact on our lives, cultures and societies. (…) Our education and health, the distribution of income and wealth, the jobs we have and how we work are all particularly sensitive to these changes.

It is a transformational era.

Disruption is the new normal.”

- OECD, The Future of Work - Employment Outlook 2019

MIGRATION AND LABOR FORCE Highest net migration rate of the past decade

MIGRATION RATE BRAINPORT EINDHOVEN - in number of people National migration rate

International migration rate

Net migration rate

Due to an inflow of 5,400 international and 700 internal migrants, Brainport Eindhoven’s net migration rate in 2018 amounted to 6,100 people. Despite a decrease in the international migration rate, the net migration rate increased by 1,400 persons (+30%) compared to 2017.

As a result of a positive internal migration rate, 2018 saw the highest net migration rate of the past decade.

Visible shift from low skilled to highly skilled staff in the past decade In 2018, the distribution of labor force in Brainport Eindhoven per educational level was as follows: 21.3% of the labor force was low skilled (88,000 persons), 41.6% was medium skilled (172,000 persons) and 35.8% was highly skilled (148,000 persons). The number of medium-skilled persons has increased slightly (+5.5%), the number of low-skilled workers has

decreased (-14.6%) and the number of highly skilled workers has increased substantially (+24.4%) the past decade.

Labor force Brainport Eindhoven - by level of education* Low

Middle

High

21.3% 35.8% 41.6%

*1.2% is unknown

UNEMPLOYMENT AND AVAILABLE JOBS The regional and national unemployment rate have both reverted to the pre-crisis level Both the regional and national unemployment rate have continued to decrease for the fourth consecutive year. In 2018, 15,000 people in Brainport Eindhoven were unemployed, constituting an unemployment rate of 3.5%. This was 0.3% below the national unemployment rate. Although the unemployment rate continued to decrease in absolute and relative terms, the decrease was less steep than in the past two years.

Unemployement rate Brainport Eindhoven

The Netherlands

4% 3%

3.8%

3.5%

2% 1% 0% 2018

Increase in the number of available job, decrease in the number of unemployed The economy continues to recover, resulting in an increasing demand for labor and a decreasing unemployment rate. Compared to 2017, the number of available jobs has increased with 6,100,

totaling 54,000 jobs available in 2018.

27.6% of those jobs were available in the tech and IT industry, compared to 22.8% in 2013. Over the period 2013 – 2018, the number of available jobs has increased annually. Since 2015, the number of unemployed has decreased. Resulting in 15,000 people being unemployed in 2018.

Available jobs and unemployed labor force in Brainport Eindhoven - in number of people New job openings

Unemployed labor force

TECH STUDENTS The past decade, the number of tech students in Brainport Eindhoven has increased by 53.6% In 2018, 31,000 students in Brainport Eindhoven studied technology. An increase of 4.6% compared to 2017. In the past decade, the number of tech students has regionally grown twice as hard as nationally. The distribution of those 31,000 tech students per educational level in Brainport Eindhoven was as follows: 8,800 students were attending

intermediate vocational education (28.2%), 11,000 students were attending higher vocational education (33.9%) and 12,000 students were following scientific education (38%). These proportions have considerably changed since 2008. The number of tech students attending higher vocational education has increased considerably (+118%) the past decade. As has the number of students following scientific education (69.1%). The number of tech students attending intermediate vocational education has increased considerably less (+3.8%).

Scientific education - 2018 0.5%

99.5%

Higher vocational education - 2018 23.6% 76.4%

Technology students - 2008=100 Brainport Eindhoven

The Netherlands

Intermediate vocational education - 2018

39.6% 60.4%

technology

other students

BUSINESS

“Cities can transform their future and Eindhoven is the prime example if we look at its entrepreneurial innovation ecosystem. (…) With the right network strategy and a focus on high tech and digital technologies, the Brainport region can prevent the economic and strategic decline of Europe”.

– Dr. Daria Tataj, innovation expert and author, 2019

ECONOMIC GROWTH The economy also continued to grow in 2018. However, growth has levelled off both on a regional and national scale.

In 2018, the economy in Brainport Eindhoven grew 3.3%. Again, this was more than the national average of 2.6%. A trend, which has continued to hold since 2013. Compared to the regional economic growth of 5.6% in 2017, the economic

growth in 2018 was less strong. That same trend can be seen on a national scale, with a decrease of the economic growth by 0.3% compared to 2017.

Following a strong revival after two crises, the Dutch economy continued to grow at a standard rate in 2018. The past decade, the regional economy annually grew 2.5% on average compared to an average national growth of 1% per year.

However, the regional growth has been

Economic growth - GDP volume transactions Brainport Eindhoven

The Netherlands

accompanied by strong fluctuation over time compared to a less fluctuating national economic growth.

The overall economy is measured by its gross domestic product (GDP).

The economy’s growth (or contraction) is measured by the change in volume of the gross domestic product in a certain period.

Economic growth - 2018 Brainport Eindhoven

3.3%

The Netherlands

2.6%

GROSS VALUE ADDED INDUSTRY Strong growth gross value added in Brainport Eindhoven’s industry in 2017 In 2017, the industry of Brainport Eindhoven had a gross value added of €8.5 billion. An increase of 12.2% compared to 2016. In contrast to the gross value added of the overall Dutch industry, which increased by 6.1% to €81.6 billion in 2017.

Hence, the gross value added in Brainport Eindhoven’s industry has increased twice as fast as the gross value added in the overall Dutch industry. Therefore, Brainport Eindhoven had the highest gross value added in the Dutch industry.

Followed by Rotterdam (€6.9 bn.), South Limburg (€4.7 bn.), Amsterdam (€4.5 bn.) and Northeast Brabant (€4.5 bn.).

Gross value added - basic prices billion euros, 2017

JOBS Top sector HTSM responsible for more than one third of the total jobs created in Brainport Eindhoven.

In 2018, Brainport Eindhoven counted 7,700 more jobs than in 2017, totaling 426,800 jobs. An increase of 1.8%. The top sector High Tech Systems & Materials (HTSM) was largely responsible for this increase in jobs.

More than one third (36%) of the additional jobs in 2018 were created in the HTSM sector. In 2018, 11.2% of all jobs available In the HTSM sector in the Netherlands were located in Brainport Eindhoven. Furthermore, the top sector Creative Industry has been creating many jobs in Brainport Eindhoven. The sector created 11,700 jobs in 2018, an increase of 400 additional jobs compared to 2017.

Total jobs - 2008=100 Brainport Eindhoven

The Netherlands

Jobs in top sectors in Brainport Eindhoven - in number of jobs, 2018 Chemistry Life Sciences & Health Energy Creative industry Horticulture and starting materials Logistics Water & Maritime Agri & Food HTSM 0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

TECHNOLOGY

“Investments in Research and Development, human capital, climate and energy are needed to support productivity growth and maintain a strong innovation capacity. (…) Productivity growth should come from innovations. A further increase of investment in research and development, especially in the private sector, is needed for this to happen.”

– European Commission, 2019

R&D EXPENDITURE AND PATENT APPLICATIONS

Top 10 R&D expenditures in the Netherlands - in bln. euros, 2018

Brainport companies represent a large part of the total number of Dutch patent applications and of the total amount of R&D expenditure Brainport Eindhoven was well represented in the area of private R&D expenditure.

ASML, Philips, NXP, DAF and VDL were among the top 10 companies with the highest R&D expenditure in the Netherlands. Those companies jointly spent almost 2,300 million euros on R&D in 2018, an increase of 11% compared to 2017. This increase is also reflected in the number of patent applications. The number of Dutch companies submitting a patent application to the European Patent Office (EPO) has never been as high as in 2018. With more than 7,000 applications, the percentage of applications has increased with 1.4% compared to 2017.

The Brainport companies Philips, Signify, NXP and ASML jointly submitted 38.8% of the total number of patent applications.

Top 7 companies in patent applications in the Netherlands - 2018

INTERNATIONAL “All companies in the region are helping to build Brainport Eindhoven into a leading world class and innovative top technology region. We all have one big challenge: to attract and retain the right talent. (...)

By joining forces, we stand strong internationally.”

– Henk Valk, CEO Philips Benelux, 2019

INTERNATIONAL TRADE In 2018, Brainport Eindhoven exported a total amount of goods worth nearly €32 bn. (+17.7% compared to 2017), of which more than €7 bn. was spent on re-export. Making the region the second largest export region of the Netherlands.

The total Dutch export of goods amounted to €346.6 bn. (+5.2%) in 2018, of which

€128.7 bn. was spent on re-export.

Compared to 2008, the export (including re-export) has increased by 48.8% on a regional scale and by 22.7% on a national scale. Brainport Eindhoven’s share in the total amount of national export has been increasing annually since 2010, up to 9.2% in 2018. The export of machines, such as chip machines and machines for the food industry, amounted to nearly €16 bn. in 2018 – an increase of almost €4 bn.

International trade - export (incl. re-export) to trading country, 2018

compared to 2015. The United States (12%) has surpassed Germany (9.5%) as largest export nation. In 2018, Brainport Eindhoven exported a total amount of €3 bn. in goods (excluding re-export) to the US. The region has exported 10.7% of the total amount of goods exported in the region to China (€2.6 bn.). The percentage of goods exported by Brainport Eindhoven to the United Kingdom has continued to decrease from 9.6% in 2016 to 5% in 2017 and 3.4% in 2018.

INTERNATIONAL STUDENTS Largest number of international tech students from Bulgaria In 2018, 10,600 international students studied in North Brabant. Compared to 9,700 in 2017 (+9.3%). The past decade, the number of international students has doubled both provincially (113%) and nationally (119.7%).

The chart shows a remarkable intersection at 2017, where the national increase in international students the past decade exceeds the increase on a provincial scale. In 2018, the largest group of international tech students came from Bulgaria. 440 Bulgarian

students were studying technology in North Brabant, amounting to 47.2% of the total number of Bulgarian students in North Brabant. The largest number of international students (regardless of the study program they were attending) came from Germany: 3,100 students, of which 410 tech students (13%). 370 students came from India and the largest part of these students (88.8%) was studying technology. Meaning that almost 9 out of each 10 students from India was studying technology. With respect to students coming from Romania and China, this percentage was also quite high, respective 52.9% and 52.8%

Top 8 country of origin North Brabant - 2018

Germany 3,100 students 13.0% in technology

Bulgaria 930 students 47.2% in technology

Romania 500 students 52.9% in technology

China 450 students 52.8% in technology

Italy 410 students 31.6% in technology

India 370 students 88.8% in technology

France 310 students 7.7% in technology

Greece 300 students 26.0% in technology

International students - 2008=100 Northern Brabant

The Netherlands

FOREIGN NATIONALITIES The number of persons with a foreign nationality has continued to increase in Brainport Eindhoven In 2018, 53,400 persons with a foreign nationality lived in Brainport Eindhoven, an increase of 9.1% compared to 2017. The past

decade saw a stronger increase in the number of persons with a foreign nationality regionally (+83.6%) than nationally (+51.2%).

The regional and national percentage of persons with a foreign nationality compared to the overall population was respectively 7% and 6.1%. The strong increase of Asian and American nationalities, respectively

Foreign nationalities in Brainport Eindhoven - country of origin and growth per continent, 2018

15.5% and 12.5% compared to 2017, is remarkable. The past decade, the number of persons with an Asian nationality has more than tripled, amounting to 8,300 persons in 2018.

Top 10 foreign nationalities - by number of people, 2018 Nationality Polish Turkish Chinese German British Belgian Spanish Italian Portugese Moroccan

Number 10,300 3,500 2,400 2,400 1,7 0 0 1,7 0 0 1,600 1,500 1,400 1,100

BASICS “Governments are certainly able to make the difference, with investments in accessibility, living environments, cultural facilities and a wellfunctioning labor market.

Creating a breeding ground for entrepreneurs and companies” – Dr. Otto Raspe, Urban regions as drivers of economic growth, 2017

REGIONAL MOBILITY The number of (rail) passengers and the traffic volume in the region have increased An average of 2,700 motor vehicles have been using the national roads in Brainport Eindhoven every hour compared to an average of 2,300 motor vehicles in the Netherlands as a whole. Road traffic volumes have been increasing again since 2014 and the number of passing motor vehicles per hour has increased by 12.7%

compared to 2011. The number of rail passengers has also increased. In 2018, 95,700 passengers travelled to or from a train station in Brainport Eindhoven on an average working day. An increase of 4.2% compared to 2017. Furthermore, we all travel by air more often. In 2018, 6,238,000 passengers travelled from Eindhoven Airport to one of the 87 different destinations.

Representing 7.8% of the total number of passengers flying from any of the national airports (Amsterdam, Eindhoven, Groningen, Maastricht and Rotterdam).

Rail passengers in Brainport Eindhoven - by station, 2018

Share Eindhoven Airport in airports of national importance - Number of passengers

7.8%

3.3%

2018

2008

Road traffic volume - Passing motor vehicles per hour, 2011=100 Brainport Eindhoven

The Netherlands

SPECIAL SUSTAINABLE WELL-BEING

“The gross domestic product should no longer be the only measure for economic success. Decades in which economic growth was deemed more important than social equality led to record levels of inequality in prosperity and income.�

- World Economic Forum, Inclusive Development Report 2018

Telos is defining sustainable development as a development process focused on enhancing a balanced growth of the physical and spiritual wellbeing of people (socio-cultural capital), the resilience and quality of nature (ecological capital) and a healthy economic development (economic capital). Each capital consists of multiple factors, which jointly determine the quality and quantity of a capital. Measured based on indicators using standards to determine the score (from 0 to 100) of an indicator*.

ECOLOGICAL CAPITAL

ECONOMIC CAPITAL

SOCIO-CULTURAL CAPITAL

Compared to the Netherlands overall, Brainport Eindhoven scored well in respect of Water, Waste and raw materials and in respect of Nuisance and calamities. In respect of Soil, the scores of Brainport Eindhoven were below the national average. The municipality of Bergeijk was among the top ten municipalities scoring highest in respect of Water. In addition, the municipalities of Reusel-De Mierden and Eersel both were in the top 10 of countries that scored the highest in respect of Waste and raw materials.

Brainport’s score in respect of Competitiveness, Labor and Establishment conditions was higher than the score of the Netherlands as a whole. With respect to Infrastructure and accessibility, Brainport Eindhoven scored lower than the national average. The municipalities of Bladel, Veldhoven and Eindhoven were in the Dutch top 10 of municipalities with the highest score on respectively Establishment conditions, Competitiveness and Knowledge.

With respect to the socio-cultural capital, Brainport Eindhoven and the Netherlands strongly differed in respect of Political participation, Economic participation and Art & culture. The municipalities of Bergeijk, Eersel and Heeze-Leende were all in the top 10 of municipalities that score high on Economic participation. Furthermore, the municipalities of Best and Bladel were in the top 10 of municipalities scoring highest on Education.

* See Telos’ ‘National Monitor Sustainable Municipalities 2018’ for more information

Brainport Eindhoven

The Netherlands

COLOPHON Editor Brainport Development NV Sources ArbeidsmarktInZicht.nl, CBS, CWTS Leiden Ranking 2019, European Patent office, LISA, Nuffic, Platform Bètatechniek, Technisch Weekblad, Telos, Treinreiziger.nl

Disclaimer In compiling this publication, we have used various sources and information provided by many different organizations. Brainport Development NV cannot warrant the adequacy and accuracy of the data, information or opinions presented in this publication, nor can it warrant the suitability thereof for any purpose, situation or application. Brainport Development NV shall therefore not be held liable for any damages, loss or other consequences arising from the use of the data, information or opinions presented in this publication.

Brainport Development NV Achtseweg Zuid 159H P.O. Box 2181 5600 CD Eindhoven 040 751 24 24 info@brainporteindhoven.nl www.brainporteindhoven.com/monitor

No rights can be derived from the contents of this publication. Š Brainport Development NV, 2019