Photo credit: john_a_ward on Flickr
Global IT services are part of a rapidly changing market. Indian IT consulting firms have traditionally operated in English-speaking markets, but the trend seems to be reversing as they set their sights on France. Pierre Audoin Consultants reports that in 2010 the sector grew by 2.2% in France, but by only 1.6% in Germany and 1.4% in the United Kingdom.
Since the US financial crisis hit, Indian companies have essentially been trying to realign their businesses by investing in new markets. France is the world’s fifth largest IT market, which quickly made it a preferred location. “Relatively speaking, France has not been hit that badly by the economic downturn, compared with the UK for example. It’s in times like these that companies look to acquire or consolidate a comparative advantage,” notes Narayana Murthy, Chairman of Infosys. In addition to a robust banking sector, the power of major energy groups and a strong public sector make France a naturally attractive market.
Why have we decided to publish a scoreboard on France’s attractiveness as an investment location?
A great number of benchmarks examining the competitiveness of different economies, tax regimes, tertiary education systems and different business environments already exist, and each of them provides useful information. Yet many of them suffer from methodological limitations and, as such, the rankings they produce can vary significantly from one study to another.
Moreover, attractiveness is ultimately a relative concept as France is compared on a daily basis by foreign investors with its neighbors and rivals.
The Berlin Air Show celebrated its 100th birthday this year at a time when things are starting to look up. When it closed on June 13, Airbus walked out the door with US $15 billion of new orders in its pocket, or almost six months of work for the aircraft manufacturer. Its Chief Operating Officer, John Leahy, says he can see “green shoots of industry recovery.” Evidence of these “green shoots” came at the 2010 Farnborough International Airshow where Airbus and Boeing won nearly 400 commitments between them.
- Airbus 380 (Photo credit: Phinalanji on Flickr)
Let’s look at the facts: after a jittery 2009, the French aerospace industry is taking off again. But can we keep calling it a French industry? As we all know, Airbus is a joint venture between the UK, France, Germany and Spain. As well as high-profile national gems like Dassault, Safran, Eurocopter, Arianespace and Thales, France is also home to a number of international players in the sector…
France is becoming more and more attractive as an investment location. Every region and every company, no matter how big or small, is now covered by networks for business, science and technology cooperation. And these networks are not exclusively reserved for French companies. Foreign investors are also very welcome to benefit from an innovation-friendly environment.
The latest creation is a network of business mini-clusters designed just for SMEs. They bring together SMEs and micro-enterprises, usually from the same sector, and unite them around a joint strategy. They are designed to boost competitiveness in France’s rural areas by providing SMEs with pooled facilities and services. The businesses can also align themselves with large companies and stakeholders in training, research and innovation…
It’s been approved, signed and ratified: the City of Light is now to become a Greater City of Light. Last May 27, the French Senate passed a bill giving the green light to the ‘Greater Paris’ project. The goal? To create the most attractive city in the world for businesses. How? First, by promoting the assets Paris already has. After all, it is already Europe’s leading economic region in terms of GDP, and according to the 2009 Fortune Global 500, it is home to more headquarters of the world’s largest 500 companies than any other city, bar Tokyo…
February 2009: Pedro Arcuri arrived in Montpellier. Back then, when he was just starting out as the newly appointed director of LabEx (the “external laboratory” for Embrapa, Brazil’s equivalent to France’s National Institute for Agricultural Research INRA), Mr. Arcuri acknowledges that “coming to France was a major decision. It was not an obvious choice either. France is a very attractive country for Brazilian scientists. To obtain this appointment, I had to respond to a call for tenders at Embrapa and was fortunate to be selected out of three candidates.” …
We’ve already learned that the French are keen on going “green”. But less well known is their passion for new technology. This market has already achieved a degree of maturity and could open up a number of opportunities for foreign companies. In fact, the ICT sector generated turnover of €110.6 billion in 2009, or 15.5% of the entire European market, making France the third-largest market on the continent after Italy and Spain. The EITO[1] also estimates that the development of the telecommunications market in France is much stronger than the European average, primarily because of the boom in mobile data services, up 20% in 2009…
Photo credit: XiXiDu on Flickr
Imagine a game with as many plots and endings as there are players. “Heavy Rain”, the brainchild of French designer David Cage and his Paris-based studio Quantic Dream, is a ‘perfect storm’ that asks players to serve as the hero in a film-noir styled interactive drama. Players actually determine the dénouement through the choices they make, amid footage to rival a blockbuster movie. This budding industry is going through a mini-revolution, underlining the creative talent of French developers.
In a constantly changing sector, with 3D, real-time games and increasingly immersive gameplay, it is crucial to stay ahead of the pack and to react to market trends which were unveiled last week at the glittering E3 2010 exhibition, the biggest video game trade show in the world. While France abounds with game titles that have put it on the map, like “Flashback”, “Alone in the Dark”, “LBA” and “Trackmania”, it is no less competitive when it comes to today’s innovations. It is no coincidence that the video game spinoffs of the planetary success Avatar have been developed by Paris-based Ubisoft…
The 8th World Investment Conference in La Baule saw Ernst & Young present its annual European Attractiveness Survey.
France’s ranking this year is notable for three reasons:
- Second after the United Kingdom for the number of job-creating foreign investment projects, as well as for the total number of jobs;
- First in Europe for the three key sectors for future competitiveness and growth: industrial projects, R&D projects and environmental technology projects;
- Conversely, the Ernst & Young 2010 Survey also highlights that France is lagging behind Germany and the United Kingdom as a recipient of Chinese and Indian foreign investment projects.
The IFA’s promotional campaign, specifically targeting BRIC countries, unveiled earlier this year is already seeking to correct ignorance and misguided beliefs where they might exist, while the number of IFA personnel is also being increased in these parts of the world.
The new IFA office in Turkey and our participation at the Saint Petersburg International Economic Forum next week are part of this strategy.
David Appia
Chairman and CEO, Invest in France
With a sizeable domestic market and a large pool of engineers and scientists educated at top colleges and universities, France is already a prime potential location for foreign technology groups and R&D operations. But it also holds another ‘trump card’ to swing decisions in its favor. A number of groups, including Huawei, Microsoft, and Intel, have cited France’s research tax credit (crédit d’impôt recherche – CIR) as one of the reasons for locating their R&D operations in the country. This tax credit, which covers 30% of R&D project expenditure (net after tax) puts France head and shoulders above the rest of Europe for R&D tax treatment.
Moreover, the 2008 and 2009 research tax credit programs incorporated an upfront research tax credit rebate for loss-making companies, with indefinite eligibility for SMEs. This rebate has since been helping to ease company cash flow management…
