Report from French government offers some big ideas to foster a ‘culture of innovation’ in France

Apr 5, 2013
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A report published today by the government and covered in detail in Les Echos rings the alarm about where France falls vis-a-vis its international counterparts on innovation and proposes 19 measures to help foster an innovation and entrepreneurial culture in France. Smartly, the report suggests to start at the beginning – with the education system. Some of the principal recommendations affecting the education system include:

  • Teaching of English and programming in primary school
  • Valuing initiative and risk-taking
  • Establishing an expansive program at the higher education level focused on practical entrepreneurship education, which could include internships in startups/PMEs, entrepreneurship focused degree tracks, or more commercializable theses where the objective would be to transform them into viable businesses

Another element that also touches the education system (albeit at a much higher level) is research. While the report found that some fantastic research happens in France, they also concluded that the bulk of this research has very limited economic impact. In order to change this, they suggest to start breaking down the barriers between scientific research and industrial application through encouraging more mobility between public and private sectors and simplifying the administrative processes for researchers and professors to launch their own enterprises.

The current approach to immigration is part of the problem

Another important area they suggested to improve was the immigration system.  Following the US’s lead here with their widely applauded plan to ease immigration hurdles for STEM talent, the report suggests that France do something similar.  They recommend that the government create a special visa process for entrepreneurs, whereby the yes/no visa decision is based upon an evaluation of the business idea. This evaluation would be made by key players within France’s ecosystem (e.g. incubators, business angel networks, or the BPI – public investment bank). This an interesting idea and definitely encouraging that they realize that the immigration system in its current form is a big problem. In addition, it would be a big help to the myriad of international students that study in France and want to stay here to launch their venture, but due to the archaic immigration system, have difficulty doing so. One big question though with this proposed scheme is whether the government is capable of choosing the right players in the ecosystem to be the decision makers.  How will they be selected? Will it be merit-based, focusing on their career performance or will it be based on political/personal relationships?

Money, money, money

The report estimates that France’s entrepreneurial ventures are underfunded to the tune of about €2B each year. They suggest that France tap into 2% of the funds saved by the French each year (valued at ~100-120B) to make up the short fall. This €2B would in essence be a fund of funds which would be managed by th BPI and be used primarily to make large investments in fast growing startups/PMEs. The report suggests that this is where the big problem is at the moment, which drives many French entrepreneurs to international investors. The also advocate that the BPI allocate some of the remaining funds to early stage investments, but only in key strategic areas such as Big Data and biotech. Lastly, they strongly suggest that other big public entities and large companies also have an obligation to support startups through investments, deals/sales, and R&D collaboration. Again, some good ideas, but one element that’s missing in all this is partnership. Yes the shortfall in money is a problem, but having enough quality, engaged investors at every stage of a startup’s development is also a major issue and a big reason startups may feel compelled to look abroad for funding. How to tackle this problem?

This report does offer some solid ideas that would help bring about a profound cultural and economic shift in France. It remains to be seen though if the government will put any of these recommendations in place or, as seems to often be the case with these things, toss it aside.