Updated February 2, 2018
Author: Yves de Beauregard
France is famous around the globe as a haven – not just a tax haven – also one for startups. But do we mean, “new innovation growing rapidly in France,” targeting international expansion, or foreign startups coming into France? Both. In France, start-ups have access to a number of subsidies and different forms of help, courtesy of either the government or private investors. Significant tax advantages such as a temporary tax exemption on profit can be life saving for a young business that is willing to expand.
Few countries in the world go through such efforts to help their own start-ups, and this may explain the success that France is now realizing. In this article we’ll outline the top 5 reasons why France is so attractive for start-ups.Back in the 1970s, the saying, “In France, we don’t have oil but we have ideas” became popular. It encapsulates the country’s great intellectual potential providing a real capacity to innovate. It’s for this reason that from 2012 to 2015, the number of French startups increased by 30%. “The Hexagon,” as French often refer to metropolitan France, has also accumulated good grades for investments in R&D, quality of infrastructures for telecommunications and overall access to capital.In general, Europe is fertile ground for the start-ups. On one hand, France is integrated in a 740M consumers market with a high GDP per capita. On the other, Europe can be used as a growth accelerator before considering more important and risky markets such as Asia or North America, for example.
Optimal Conditions for Startup SuccessIn order for startups to gain traction however, certain conditions must be met:
There are 5 main reasons why France provides strong opportunities for start-ups to achieve these conditions for success and growth.The 5 Ways France Succeeds In Hosting And Developing Startups
There are 740M potential consumers in the European Union, including 67M in France. As of 2016, the GDP per capita in France is approximately 31.000€. In 2016, more than 447,000 people work in the computing service sector. In France, negotiation is about the price and the good bargain, together with a strong and long-term relationship between the salesperson and the decision-maker. The concept of payback and ROI are more Anglo-Saxon and the premium quality is more Germanic. The bureaucracy and paperwork are frequent – calls for tender and consultations – because 57% of the GDP depends upon the public sector. Therefore, effective RFI writing becomes a more important factor to success.
Their investment in developed and efficient transportation infrastructures has resulted in the 3rd largest railway network in Europe, 1st aerial network and international harbours. The telecommunications infrastructure is similar, with at least 90% of the country covered by 4G and the optical fibre is expanding.According to a study from the European Digital City Index 2016, Paris ranks 2nd in access to capital for the start-ups, which confirms this international attraction. Finally, knowledge spill over is very well developed in France. This refers to the permeability between Public and University Research and its diversification in Marketed Innovations in the Private Sector. In fact, it ranks 1st in all of Europe.
France has all the right assets in place to attract, develop and grow startup and scale-up businesses, whether originating from or landing in the country. The government, investors and the general ecosystem all align to offer these businesses the optimal conditions for their international success. Thanks to the reasons outlined here, the sky’s the limit for those enterprising and innovative enough to invest in their own future in France.
Photo by Paul Dufour on Unsplash