For decades, France has shown a strong desire to be at the forefront of innovation and future technology. Despite this, it’s somewhat odd that it’s only recently spread its tech wings. After all, legend has it that it was a French computing system — the Minitel Terminal — that supposedly inspired the Apple Mac.
However, France failed to surf the wave of the dotcom bubble at the end of the 20th century, reducing confidence in this national industry — until now. 2021 saw a record year of phenomenal growth and success of new digital and tech startups. So, let’s take a closer look at this sector of the French economy, and how bright its future may be.
Traditionally, France’s economy has been dominated by services and manufacturing, but successive governments have been eager to make the country an international player in the tech world. In 2006, President Jacques Chirac expressed his dismay that Germany had beaten them to the punch when developing an alternative search engine to Google (with the less catchy name of Quaero).
Back then, the government answered this by promising €600 million to develop new tech industries. Fast forward to 2021, and President Emmanuel Macron declared at least €5bn of the France 2030 reindustrialisation budget would be devoted to deep tech. These are the startups concerned with innovations in science and engineering, such as artificial intelligence, for example.
Things certainly are looking brighter for the sector today. This is partly due to the government’s incentive schemes for innovation and growth in the industry, such as creating the initiative La French Tech that recognises cities with a strong tech startup ecosystem. In early 2022, the warehouse robotics company Exotec became the latest addition to France’s “unicorn” tech companies (private startup ventures valued at over $1bn), fulfilling President Macron’s pledge to establish 25 unicorns by 2025.
The rise of France’s tech industry is in no small part down to its emphasis on modernisation, and viewing the next generation as being at the forefront of further technological development. The private equity group KKR explains that “the backbone of the French tech ecosystem has always been its education system that produces world-class talent. Paris boasts the highest number of engineering universities of any city in Europe, which are amongst the very best technical universities in the world”.
One of the primary reasons that successive governments have pursued these great developments in technology is that it is an effective job-creation strategy. This is no doubt coveted by the government — France’s post-Covid employment rate lags behind Germany with three million fewer people in work. When President Macron outlined the new industrial budget, he announced that not only will €15 billion be funnelled into startups, but crucially, “€31 billion will be invested in training in digital jobs”.
The rise of new tech companies has consequently gone hand in hand with a growing recruitment sector to find highly-skilled professionals vital to the industry. This can be seen with global technologies like SAP (an enterprise resource planning solution), which interacts with at least 77% of the world’s revenue streams and requires specialists in order to harness it to its full potential. Back in 2018, the German multinational behind the software pledged to invest €2bn into France by 2023 in order to bolster its operations there. Dedicated SAP recruitment companies are therefore becoming increasingly vital to the French tech industry, with the likes of Eursap helping businesses find experts across the full spectrum of SAP professionals for both permanent and interim contracts in France.
France has seen the emergence of a slew of startup companies and networks, with profitable firms like Dassault Systemes, Genymobile and VideoLan. Yet, crucial to the continued success of companies like these is foreign investment. Taxpayer money has already been used to make up for where venture capital in the tech sector has fallen short. However, it is argued that only outside investors, who are often less risk-averse and constrained by regulations, can help these businesses expand to levels that will help make the country a “nation of large tech companies” by contributing enough necessary capital.
Sifted points out that, because this aspect of levelling up the industry still requires work, we should therefore be cautious with any optimism that this is purely a national success story: “France likes to succeed on its own, but in truth in the tech world, a local startup community can only succeed by looking outward and strengthening its connections with what the world has to offer”.
Yet the signs look positive. More and more small and medium-sized enterprises and startups in this sector seek out multicultural and international talent from a range of “diverse ecosystems as various stages in diverse locations”. As France fixes its eye towards owning the future of tech, it could well be that — as the saying goes — vouloir est pouvoir.