This week Bpifrance, the French investment bank which is financed by the French government, announced that it would be changing its criteria for determining if potential investments are innovative. The new definition will see Innovation defined not only as hard technological innovation (think ‘patents’), but will incorporate 5 new criteria – product innovation, service & use, behavior & organization, marketing & sales, social impact & business model. Projects will be assessed on a scale of 0 to 4 on these six criteria, with eligible candidates being expected to excel in some, not all, of these criteria.
Since its formation in 2013, Bpifrance has looked to simplify the way that the French government supports innovation from an investment perspective. Inevitably, as a structure that must industrialize the process by which it assesses an entire country’s investment opportunities (rough numbers suggest that, between its activity supporting seed & growth funds as an LP, and its direct investments in the likes of Withings, SIGFOX & Teads, that Bpifrance is responsible for more than 2/3 of all investment money pouring into French startups – which is both good and bad), Bpifrance inevitably restricted itself to tangible KPIs for technological innovation – patents & research credits.
As pointed out in Challenges[fr] this week, this has led both to Bpifrance being unable to support some of France’s fastest growing startups (e.g: Leetchi, which is announcing international expansion this week), as well as making things more difficult for startups, such as Blablacar, by looking to bend the very activity that the startup does in order to fit its own criteria.
More importantly, though, is that Bpifrance is pointing out that it, like the very startups it supports, is still learning, and that it makes mistakes. Bpifrance is among the most transparent government investment bank, releasing their results to the public and setting a concrete line for how both governments and private investment funds can think differently about innovation without reducing it to “gut feeling.”
Paul-François Fournier, SEVP of Innovation at Bpifrance, added in an interview that Bpifrance also recognizes that this new definition of Innovation will, too, become obsolete or need adjustment, and that Bpifrance cannot afford to wait until the road is clear to step out – it, too, must be on the leading/bleeding edge.
Particularly for France, I believe that Bpifrance’s adjustment addresses a cultural issue head on which may have rippling positive effects. Too often France finds itself one step ahead on Research, and two steps behind on Development. Investing based solely on research potential rewards this behavior and punishes those who are too busy building a scalable business to re-invent the wheel. By redefining and opening up its definition of innovation, Bpifrance is sending a signal across France, and even outside of France, that the country needs to redefine its priorities when it comes to supporting entrepreneurship.