The French Government’s (feasible) 8-step plan to turn Paris into an international startup hub

Jul 30, 2013
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The French government has announced their intentions to build “Digital neighborhoods” (in French, Quartier Numeriques) in Paris as part of a plan to turn Paris into an international startup hub. The brief of the official report by France’s Minister of ‘fix the industrial sector and get us out of the economic depression’ Jean-Marc Ayrault, details eight concrete steps that the government plans to take starting in September.

The report itself (hat tip to Numerama for picking it up quickly) reads like a well-informed entrepreneurship thought-leader, describing Paris in relation to London & Berlin, repeatedly citing London’s Tech City initiative and the success that it has had in identifying London as a startup hub through encouraging initiatives and proper communication & branding around them.

While the report still reads a little French – it cites France’s large amount of patents as justification for why France is a great candidate for a technology hub – it ultimately defines 8 concrete actions that, if done properly, could legitimately improve not only the international perception of the French government’s impact on startups, but the relationship between startups in France and their own government.

Step one: Identify “Digital Neighborhood” candidates in France

Founders per 100,000 inhabitants
Founders per 100,000 inhabitants

The report cites two polls: the first states that 54% of businesses think that there would need to be a critical mass of 100-500 startups in order for the neighborhood to become attractive. The second states that 84% cited that the neighborhood needs to be in proper Paris – so no Saclay or Issy Les Moulineaux – citing convenience of access as among the most important parts of the neighborhood. Lastly, 87% stated that having an “international dimension” in the neighborhood would be key.

Result: the already existent Sentier neighborhood, which has easily 100 startups in its clutches, is a great candidate for such a neighborhood: minutes from the Gare Du Nord train station, direct access to the Charles De Gaulle and Orly airports, and it has about 5 metro lines running through it. The 13th district is also a candidate – it has a few incubators and universities around, but mostly there is just room for growth; I avoid going there as much as possible, but it’s true that the EPITA/EPITECH developer universities are there, as are Gandi, VLC, Infinit, WriteThat.Name, and a handful of others thanks to the government’s huge incubator in the region.

Nonetheless, picking a neighborhood doesn’t do much (or more, it’s already been done by the private sector) unless you can incentivize movement to the region…

Step two: offer incentivized office space rental prices just for digital startups

Oh, yeah… I guess that would do it.

The government’s second step is to incentivize conglomeration and centralization of the startup scene by offering attractive real estate offers. I don’t have much to say about that, just that, assuming they pick the right neighborhoods, then they will be doing a great service to startups, incubators, accelerators, large companies, etc.

Step three: overhaul the neighborhood with next-gen Internet connection

If there’s one thing they are good at, it’s deploying networks to whoever they see in need of it. 99.99% of the population has readily available access to industry standard internet, and this initiative to bring Next-Gen internet (Ultra Haut-Debit, or “ultra high-speed”) is pretty sweet. It’s an example of something tangible that the government can do to help startups. Simple.

Step four: enable the existence of players who will insure the survival of the ecosystem

A bit vague, but this may be hinting at tax incentivization, or it may be suggesting that the government will ‘pick winners.’ Hard to tell, to be honest, so I’ll wait until the Fall to make any decisions.

Step five: create physical hubs, like a FabLab, that will encourage innovation & collaboration

Google Campus Paris, anyone? Or perhaps Silicon Sentier’s recently partially-crowdfunded building will serve to fulfill this? Incubators, coworking spaces, FabLabs – personally, I love that they specifically mention a hardware collaboration studio. France kicks ass at hardware, and it would be great to enable more engineers to tinker.

Step six: Create a political agency whose role is specifically to encourage businesses to come to Digital Neighborhoods

The report specifically cites Tech City’s Joanna Shield and the Tech City Investment Organization (TCIO), and so I assume this refers to this. The report continually cites “international” as an key importance for the neighborhood. In fact, among the report’s recommendations (a list of 8 that are separate from its 8-step roll-out plan) include creating a brand for Paris that will be “international (no need for translation), easy to write and remember, and will embody France’s strengths.” The report cites further on terms “Silicon Allée” “Silicon Alley” and, again “Tech City” in London. Given that “Silicon Sentier” has already been absorbed by the association (a bit of a shame as it would force the startup neighborhood to be near Sentier) – but I guess this is like “Shoreditch” instead of “tech city” – I guess they will have to pay Publicis Omnicom Group to help them create and advertise some new brand.

Step seven: Create a simple, advantageous environment for digital companies to grow

They’ve already announced their intention to reduce admin work by 80% – perhaps this is the next step further? Capital gains tax is clearly an issue, as are labor laws, but it might also just be a question of allowing companies to create their companies using English-language documentation. I’ve recently heard from Oussama Ammar of TheFamily that European Commission law requires France to accept English-language company documents, which could be a game-changer if we could get startups to start making their inner workings more clear for international investors.

Step eight: Create a local governance to interact with the key actors of the ecosystem

France wants to promote its winners – I’m not sure why it needs a government entity to do this, but France is good at creating redundant governance.

What I find more interesting is, coming back to the eight recommendations in the report, that the report suggests creating relationships between Paris and other cities, namely those of European & developing countries. The idea of creating a unified Europe is huge – If London ,Dublin, Berlin, Paris and other cities could agree on how they should interact together, how they can facilitate progress, and change the game from “there can only be one” to “everyone wins if anyone wins,” then Europe might inch one step closer towards bringing together the 500 Million inhabitants under its jurisdiction.

Overall, the report offers an interesting look at how the government sees the problem. The time-frame for the first few steps are about 6 months, so hopefully in the Autumn we’ll hear a bit more about which neighborhoods the government has its eyes on.