Lex in IT

France, dreamland for investors ?

It will not hurt to begin with some statistics concerning France to demonstrate the effect, actual or assumed, of its allure to foreign countries:

  • Fifth strongest economy worldwide and 2nd largest economy in Europe (according to IFA)
  • Number one tourist destination worldwide
  • Fourth host of FDI (Foreign Direct Investment)
  • $34 billion of foreign investment flows inFrance, equivalent to the capital of the famous American university, Harvard
  • More than 20,000 foreign companies inFrance(out of a 3.4 million total in 2010) that:
    • employ 2 million people
    • provide one third of exports
    • carry out 22% of the total Research & Development

Apart fromFrance’s stance related to worldwide economies and European economies, these other given numbers are much less familiar.  The real question is:  Is there reason to boast about this?  It is up to each individual to decide this for themselves.  But what we know for certain, is that France has an extraordinary capital, an international image, and a history impossible to find under or poorly exploited.

This “France,” a brand that could sell better than that of other countries uninhibited by their cultural capital, has been in decline for many years.  Having lived for a few years in South Korea and having traveled in multiple countries, it seems that France has rare and precious strengths that, ideally, could be turned into tools of competitiveness.  This all goes back to earlier times, when philosophers of the Age of Enlightenment started an idea of cultural impact abroad.  Our Cartesian way of thinking gives logic to our reasoning and explanation to our ideas.  In this way, Cartesian logic plays against us regarding areas of globalization, sculpted from that of the American model, in which pragmatism and the art of synthesis are masters of society.

On the other hand, this commonly shared yet critical way of thinking complicates things for our political leaders: this ability allows us to “clear the air,” to challenge established order, to invent new things, giving us a rare capacity for innovation.  Korean enterprises are heavily investing in R&D and as a result, have no way of discerning what is best for them let alone adapting it to their internal constraints.  The defaults of French companies, who are investing less in R&D, are made evident by numerous studies that associate it with the fact that we do not produce enough patents.  And yet, there is a real premium on innovation and research: research tax credit. With a budget of more than 5 billion Euros in 2012, this complicated system allows the government to award budgets to innovative French companies who meet the criteria, no matter what their size.

Finally, our touristic capital could serve for more than solely attracting cohorts of northern European tourists in the summer. This tourist attraction could provide an entry point advantage forFrance and the desire to move and do business here, if indeed our reputation of being an arrogant people does not turn them away. In spite of this national image, where red tape prevents all,France is ranked the seventh country by the OCDE for easily starting a business.  For it takes no more than a few days, in non-regulated sectors, after the necessary paperwork is completed, to start a business or company.

The only question remaining, before we dig into the next post concerning the advantages and disadvantages of France’s low ranking in terms of competiveness, is: are we actually constrained by this red tape (for what country isn’t familiar with such barriers?), or are we not the first to be self-regulated  regarding our ability to undertake and attract foreign investment?

 Cécile Dekeuwer ( )

Translated by Marisa Delchert

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