PESTEL analysis of Belgium (Belgium country profile)

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PESTEL analysis of Belgium

This detailed ‘PESTEL analysis of Belgium’ aims to explore how a variety of factors can have impacts on Belgium. Belgium is a Western European country. It is officially known as the Kingdom of Belgium. It is one of the most developed countries in Europe.

Political forces that affect Belgium

Belgium is a constitutional monarchy and a federal parliamentary democracy where the monarch is the head of state, though the power retained by the monarch is somewhat limited. The prime minister, appointed by the monarch, leads the government. Some of the kye political parties in the country are Workers’ Party of Belgium, Socialist Party, Flemish Socialists and Spirit alliance, Christian, Democratic and Flemish Party, Ecolo, Groen, Reform Movement, Humanist Democratic Centre, and Flemish Liberal Democrats.

Belgium houses some of the top EU institutions e.g. the European Council, and the European Commission. NATO is also headquartered in the country. Belgium is a strong advocate of the European integration and plays a big role in the EU. It is a relatively safe country and does not face any hostilities from neighbouring countries as it is an active member of the EU and NATO.

Corruption risks are generally low in Belgium and therefore, do no create any significant barriers to trading and political processes. However, language divide (Dutch-speaking, French-speaking, and German speaking) is a challenge for the country. Likewise, the rise of far-rights and political bickering are some other notable concerns.

Economic forces that affect Belgium

A number of economic factors have a significant impact on how organisations operate in Belgium. The GDP in the country was worth $529.61 billion in 2019; however, the forecasted GDP of $495.00 billion for 2020 was because of the economic lockdown and associated challenges (Trading Economics, 2020).

Belgium is a developed country and a free market economy. Its economy is highly diversified; relies on international trade; and inseparably tied to that of Europe. Belgium’s top exports in 2020 were motor cars and other motor vehicles, medicaments, petroleum oil, and diamonds, whereas the main imports were vehicles, mineral fuels, pharmaceutical products, machinery and mechanical appliances and organic chemicals.

2020 was very tough and now the question is how Belgium performs in 2021 and beyond. Many companies fear that thousands of jobs will be lost in coming years. The country is experiencing an extraordinary economic shock, and the recovery is uncertain as well (Ledent, 2020).

Social forces that affect Belgium

Another important element to discuss in the PESTEL analysis of Belgium is the country’s social environment. Belgium is a developed and high-income country. Its total population is around 11.6 million (Worldometer, 2021). It is one of the top countries in the world in terms of life expectancy.

Belgium has a stunning adult literacy rate of 99%. Likewise, the rate of home ownership is among the highest in the Western Europe (Encyclopaedia Britannica, 2020). The country is also famous for its tradition of fine cuisine. However, industrial strikes, work overload for the police force, traffic jams, and a large economic gap between Flanders and Wallonia are some of the social challenges for Belgium. Likewise, the cost of living is higher than that of many Western European countries.

Technological forces that affect Belgium

Belgium is an innovation hub. Innovations are widely found across different industries e.g. fashion, pharmaceuticals, robotics, and electronics. An active gig economy, fast-growing tech start-ups, and tech fairs, events, and workshops are creating a buzz (Ryhove, 2020). The Belgian ICT market is very sophisticated. It is highly competitive as well; however, it offers opportunities for international trade for all types and sizes of business.

The ICT sector is an important contributor to the Belgian GDP. Demands for IT solutions such as integration of software packages, cyber security, big data analytics, and digital marketing are high. However, there are skill shortages in the country in different sectors and some of the skills shortage jobs are engineers, ICT staff, mechanics, and architects.

Environmental forces that affect Belgium

Though Belgium is a small country, it has a lot to offer e.g. fine cuisine, French fries, waffles & chocolate, scintillating palaces, castles, picturesque towns, cathedrals, blue forest, and many others.  It is easily accessible and surrounded by the Netherlands, Germany, Luxembourg, France and the North Sea. However, air pollution is the most pressing environmental problem in Belgium. Likewise, many people are very concerned about global warming and climate change.

Legal forces that affect Belgium

The Belgian Constitution of 1831 is the current supreme law in the country. It was revised in 2017 and several times in the past. Belgium is a federal state with a civil law system and its judiciary is independent. As a member of the EU, it must also abide by the EU law.

We hope the article ‘PESTEL analysis of Belgium’ has been useful. You may also like reading PESTEL analysis of Denmark and PESTEL analysis of France. Other relevant articles for you are:

PESTEL analysis of the Netherlands

PESTEL analysis of Italy

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Last update: 02 January 2021

Further reading/references

Encyclopaedia Britannica (2020) Belgium, available at: https://www.britannica.com/place/Belgium/Economy (accessed 29 December 2020)

Ledent, P., (2020) Belgium: Multiple challenges ahead, available at: https://think.ing.com/articles/belgium-multiple-challenges/#a1 (accessed 28 December 2020)

Ryhove, J. (2020) Why Belgium is an innovation hotspot, available at: https://www.boardofinnovation.com/blog/why-belgium-is-an-innovation-hotspot/ (accessed 27 December 2020)

Trading Economics (2020) Belgium GDP, available at: https://tradingeconomics.com/belgium/gdp (accessed 28 December 2020)

Worldometer (2021) Belgium population, available at: https://www.worldometers.info/world-population/belgium-population/ (accessed 01 January 2021)

Author: Joe David

Joe David has years of experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality and tourism management.