François Hollande, the socialist candidate currently running for the French presidential election, will be elected in May. He says he counts on the small and medium companies to boost the French economy, which dearly needs it.
This is a guest post by Regis Behmo. With a PhD in applied mathematics, he has worked at Moodstocks and Criteo, and is currently working at LTU Technologies researching image recognition and computer vision applications. You can follow him @regisb.
François Hollande, the socialist candidate currently running for the French presidential election, will be elected in May. He says he counts on the small and medium companies to boost the French economy, which dearly needs it. Of course there is not much novelty in this campaign theme which resurfaces every five years in France during the campaign for the presidential election. And of course startups, which are great at creating value quickly with little initial investment, should be instrumental in the pursuit of growth through entrepreneurship.
So who are those most likely to build successful startup businesses in France today? Who has both the technical skills to create an innovative and scalable web service and the business skills to transform it into a viable product? The closest thing to this rare bird that comes out of the French higher education system are the ingénieurs. Engineers are far from being perfect, but generally speaking, they do a good job at solving technical problems.
Where the engineers at?
The problem with French engineers is that they don’t create enterprises. In last year’s French Engineer Association annual report on the employment of engineers, a formidable report of ninety-six pages that cover all things engineer, from engineer salaries to “process innovation”, a grand total of six lines are dedicated to entrepreneurship (page 43, at the bottom). Engineers don’t give a fart about entrepreneurship. More precisely, they do give a fart, but they don’t create enterprises. What this otherwise underwhelming report teaches us is that 6.32% of all engineers under 65 are “considering” (“envisagent”) creating or acquiring an enterprise in the following two years. I’m not sure of what that means, but that sure seems like a lot. But on the other hand, only 5.3% of engineers are currently working in a company they created of acquired. On an estimated total of 722.500 engineers, that represents a measly 38.292 engineers. To put that in perspective, according to an INSEE report, about 262.300 enterprises were created in 2011 only, in addition to 360.000 auto-entrepreneurs. In other words: engineers would like to create enterprises, but they don’t do it. François, don’t start to worry now because I have worse news for you.
The reason why engineers are not creating enterprises is that they don’t have a clue how to do it. Market validation, basic business law and marketing, none of these are being taught in the state-owned most famous engineer schools. Hell, I have to check what these concepts truly mean as I am writing this very article. (btw, I’m an engineer) Oh, sure, most engineers know what is a patent and an SARL. But have they done any hands-on work during their scholarship? Not one in a hundred.
Entrepreneurship is simply not in the DNA of French engineer schools. But for once the French government is not to blame, which will sound very unusual to any self-respecting French citizen. The curriculum taught in an engineer school is decided upon by its education board (conseil de la formation). Of course, representatives of the school and teachers sit at this board. But these state representatives largely follow the opinions of the corporate board members who also have seats at each and every engineer school education board. McKinsey and Renault are at the Ecole Centrale Paris, Essilor and Michelin, among many others, at the Institut d’Optique, McKinsey (again) and SFR at Télécom-ParisTech, Dassault Aviation at Supaero-ISAE. Your future employer, now available at your favorite engineer school near you.
These large companies have no immediate interest in seeing young engineers create competitors to their own businesses. On the contrary, they would much rather see them join their ranks with specialized knowledge. In effect, some engineer schools have largely become custom-tailored hiring pools for a handful of companies that hire the bulk of a class each year. While small to medium enterprises (PME) represent more than two thirds of French jobs, less than a quarter of French engineers work there.
Engineer schools do little to disrupt the status quo because they don’t have any incentive to. They are evaluated on one hand by the AERES, which measures both the efficiency of the research in the engineer school and the quality of the education provided in the school. They periodically publish their observations and engineer schools usually try to take actions to comply with recommendations. On the other hand, top engineer schools are evaluated by yearly reports from magazines such as L’Express. The rankings produced in these reports, which are about as surprising every year as the Cesar movie awards (i.e: not), are essentially based on the average post-graduation salaries. A high “Express” ranking, along with abundant sports facilities attract better qualified school candidates, who will eventually make the school perform better in the AERES evaluation.
Nobody moves, everybody wins
How could engineers schools break out of this not-so-vicious-but-decidedly-rather-confortable circle? Creating a product and making all the preliminary work necessary to bring it to market could be a mandatory part of the engineers’ 5-years curriculum. Such projects would greatly benefit from cross-domain collaborations, for instance with business schools. Engineer schools could count on the success stories of its alumnis to attract ambitious entrepreneurs-to-be from preparatory school. The performance of engineer schools could incorporate their financial contribution to local entrepreneurship, including toincubators, or to startup events. Incubated companies could share their experience with students and would benefit from a larger pool of potential interns.
Levers exist in the national evaluation commitees and in the commitee in charge of the definition of the engineer curriculum. Once new incentives are created, engineer schools and their education boards will have to adapt to the new situation.
In their current state, engineer schools have no reason to change, they simply don’t have to. They provide the French industries with young, extremely qualified people who will earn confortable salaries by addressing modest challenges. Paradoxically, engineer schools are victims of their own success.
The effect of entrepreneurship-friendly measures on the rate of enterprise creation can be rapidly estimated on a single candidate engineer school. François, it’s up to you.