France is not suffering from an exodus of entrepreneurs: the world is benefiting from mobility

France is not suffering from an exodus of entrepreneurs: the world is benefiting from mobility
French-Startup

mobility

The following guest post originally appeared on Frederic Montagnon’s blog (in french). Frederic is a French entrepreneur, co-founder of Overblog and Ebuzzing, currently based in New York City.

The media landscape shows a growing « France bashing » spirit those days, in France and abroad. The blame is that France’s gloominess is pushing its talents outside of its frontiers. In this article by the New York Times, a french entrepreneur based in London declares : « I’ll tell you. France has a lot of problems. There’s a feeling of gloom that seems to be growing deeper. The economy is not going well, and if you want to get ahead or run your own business, the environment is not good.” According to the journalist, despite François Hollande’s and Fleur Pelllerin’s attempts to restore France’s image, there is not turning back in inducing people to leave. According to me, that’s not such bad news.

France is not the victim of an exodus: mobility is increasing worldwide.

Instead of using an individual example, I looked at figures. In the past ten years, the number of expats for entrepreneurial motivations has raised from 10 to 18%. I previously noticed that globally, the volume of expats grows 7 times quicker than the population in France (read my blog post in french here). There is no denying that there are strong obstacles in France, mainly due to taxes, that pushed entrepreneurs abroad, especially after François Hollande’s election.

Yet, I think that instead of pointing out the French “brain drain”, the New York Times article should have better looked at the issue from a broader perspective and described why, on a global scale, mobility is increasing.

The number of expats is in fact growing from 2.6% since 2009, everywhere in the world, and should go on like that to reach 57 million in 2017. On the contrary to popular belief, this does not only concerns migrations from developing countries to developed ones but also mobility from developed countries. Among OECD countries, the number one country in terms of expats moving abroad is… the UK – where the French entrepreneur mentioned in the article has found “rescue” – with 3 million British living abroad. Even in the USA, although historically the “dreamland” for immigration, there is a growing worry about the number of citizens who give up their US citizenship.

What is happening now is much more interesting than a French “brain drain”: it’s a worldwide mix operating and accelerating year after year.

France’s priority should be to encourage mobility: it’s a great source of growth and innovation.

I think that the increase in mobility is a very good news. As in biology, mixes are at the basis of enrichment. They enable knowledge and skills transmission and are the source of innovation. Mobility is a strong factor for growth, a particularly important issue in those times of economic gloom.

The challenge for France – and for all countries – is not to reduce the number of emigrants but to find ways to attract more foreign talents. The Silicon Valley already got it in 2012 by fostering tech profiles’ expatriation. People will choose their country of expatriation according to what it has to offer, in professional and well-being terms.

On an economical point of view, France is the 4th country to receive the most direct foreign investment, after the US, China and the UK. In terms of quality of life, France is well-rated in the Expat Explorer from HSBC: 51% of respondents declared that they appreciated France’s cultural richness and quality of life. In terms of education, France’s reputation is all set: since 20% of the State’s budget is dedicated to education and R&D, France’s schools and universities are well-placed in several rankings (Shanghai, Financial Times, Times Higher, European Report on Science and Technologies…)

Yet France’s main problem is a communication issue. France has a lot to offer but doesn’t manage to let the world know about it, especially those days. Its needs a good marketing director to make its offer clearer and communicate about it throughout the world. The same way French universities, perceived as the best, appeal to the best talents, France needs to become more attractive.

5 Responses

  1. Thierry

    “France’s priority should be to encourage mobility”: There is plenty of opportunities to go abroad as students, interns… Even entrepreneurs have plenty of opportunities to grow theirs businesses elsewhere, seeing that everyday in biotech (France ==> US). What’s worrisome is the general feeling (real or not) that a France-based startup entrepreneur is more likely to be successful, and have more opportunities to make things happen, abroad than home. The reason pushes you to leave, only the heart would make you stay. From a French expat in the US.

    • Pierrot

      It’s not starting up a business in France that’s the problem; it’s growing it once you start to become successful. France penalises success, and THAT is the big issue today. While there are plenty of startups in France, a recent magazine article in France showed how the number of medium sized businesses in France is only a third of the number in the UK or Germany, because businesses are discouraged from growing, by arcane labor laws, extra administrative red tape whenever the number of employees goes above various thresholds, not to mention the punitive level of social security contributions, compared to other countries.
      When successful small businesses deliberately work less rather than have the hassle and extra expense involved in exceeding 10 employees, they effectively stymie their growth, and also France’s growth. And it happens all the time.
      France, and particularly the French left, is paranoid about allowing people to work without being duly taxed from the first centime, and about letting people be successful without immediately being subject to more red tape that increases their operating costs and reduces their profit margin and competitiveness – not to mention taxes and social security contributions.
      Until that changes, there is not much hope for France; but can it change? The French left has been up in arms about Hollande’s “pacte de competitivité” because they see it as a gift to business, and more profit for business. The sad thing is that millions of people in France still see entrepreneurs and bosses as the big bad wolf, and profit as a dirty word; and as long as there are millions of voters in France who still honestly imagine that the solution is to tax business more and more – because the militant left depends for its survival and few elected offices on continuing to pedal this myth – then any real change will be very hard to implement.

    • John

      Pierrot, I believe you miss one important point: the problem goes further than just labor laws, red tape and social security contributions. From my humble point of view, the real problem comes from the lack of margins too. French suppliers (CAC40 customers but also smaller clients) do not want to pay the fair price for a product or a service. Each of them requests their suppliers to deal “without making money”. Growth margin of SMBs is about 15 points below than other countries such as Germany – a country where tough negotiations on price until the supplier is left almost dead is not the rule. We have to change our mentality and understand that if a supplier does not make money, he cannot innovate anymore or have a long term strategy.
      This is why the French SMBs keep on looking for business out of France and tend the move abroad.

  2. Angelo

    France has indeed some pillars on which it stands but as far as a tech or general doing business eco-system has yet many steps to put “en oeuvre”. I don’t got the time right now to go through indexes (maybe that s a good stimulus to do an article as well) but tell me, for instance, which of the big tech powers of the world today doesn’t still have a dev boot camp nowhere on its territoir ?

    France is in need of radical swift of direction, if it still wants to stay on the top of the tech list. And its biggest obstacle is its own fear of openness. I was way more than surprised when I first arrived in Paris (2007) by the huge public debate back then on whether France’s culture is in danger because of the penetration of English terms in the language… People on the cafés where arguing seriously about it as a danger of survival.. (Let alone the relevant tragicomic measures Chirac had taken a few years earlier).

    Let me finish with this last word: think how different an average French (or Parisian, to set it more accurately) will respond if a foreigner will come on his way, speaking badly the language or even just English and what will be on the other side the reaction of a Londoner, of a Berliner or of a New Yorker. That’s simply the easiest way for someone to realize why France is lacking serious steps on the exposure scale even after decades of serious immigration flux to the country and to its capital.

    There are things to do: enhance the learning of english to the population, create critically more english-based public uni courses & masters to attract more foreigners, give incentives to foreigners to start up businesses here, lower fiscal terms for big businesses that bring here their headquarters, give smart incentives to french companies to hire foreigners (to a normal extend, ofcourse).

    Hence, I disagree that the problem is a Chied Communications Officer for France. It’s not just an accident that there’s a great public internal & external discussion on french un-competitivity and the worst thing will be to not look through all of that thoroughly. (Here’s a great article talking about the pros & cons of France’s economic & political reality http://about-france.com/geo/french-economy.htm).
    France needs a big reform wave but no political leader has the guts to step up and smartly do it.

  3. Toby

    As a tech founder moving to France, another perspective. It’s never been a better time to start a company *anywhere* in the world, especially given the growing acceptance of remote work and numbers of excellent engineers choosing to live, from home or co-working spaces, outside of SF/NYC/London.

    What happens when the twenty-somethings who are currently spending every waking hour hacking on startups start… families? Other considerations (education, health, ‘quality of life’) start coming into play. Few places in the world can outdo France on those measures.

    I’m not trying to suggest that France couldn’t make some relatively pain-free changes to make entrepreneurs’ lives a whole lot easier. Clearly there’s a lot of scope to tweak the tax regime without destroying la République. But I do hope the sense of gloom from French entrepreneurs, wherever they are in the world, doesn’t become a self-fulfilling prophecy.

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