I/ Invest in strong demand
France is a country of choice for innovation and investment because of strong demand. In France, incumbent corporates have long minimized the impact of the Internet on traditional industries. Too many established corporates once believed that Facebook was only a place to upload pictures and that Amazon would never establish itself as a profitable company. But this is changing now. French companies recognize that they must turn digital if they are to survive in the face of disruption.
As a consequence, there is strong demand among the Fortune 500 companies based in France for additional work with startups. They are working with funds in order to identify potential disruptions and acquire innovation talent (“acqui-hire”). They network with other like-minded digital innovators. Partech, for example, has been chosen by the Paris Saclay University, one of the largest innovation hubs in Europe, located in the south of Paris, to prepare a fund dedicated to its leading scientific universities, engineering and business schools, with the active support of leading corporates.
II/ France and Silicon Valley
Silicon Valley has been the world’s hub for innovation for at least 30 years. This is of course not going away anytime soon. It’s been the birthplace of the world’s most valuable companies including Google, Facebook, Apple, Microsoft, Amazon, Uber, Palantir, Dropbox, Salesforce and other Unicorns.
But in the new B2B tech and digital innovation wave currently emerging, France, with its presence of 31 Fortune 500 companies, has a place to take. B2B innovation rewards strong ties with large corporates. It also puts a greater focus on deep technology and strong mathematical skills—areas where France is particularly competitive. Don’t forget that the country produced 4 Fields Medals in the last 10 years, and that Paris is the largest mathematician pool in the world.
John Chambers, CEO of Cisco, also believes that France can take on a leading role in B2B innovation.
III/ The competitive advantages of France, relative to other innovation hubs
What are the market segments where France is distinctively strong? There are least two market segments which seem particularly relevant.
- First of all, the retail industry is really strong in France. French retail companies are more global and with larger market caps than any other of their European counterparts. Therefore, they are in a leading position relative to competition.
- France is also strong in the field of Smart Manufacturing. For instance, companies like Dassault Systèmes have helped improve the productivity of factories by duplicating them digitally in order to analyze the optimal production organization.
France has also developed a strong expertise in technologies such as IOT, big data, predictive maintenance, artificial intelligence, 3-D and augmented reality, etc.
Invest in France for at least 4 reasons:
- The country is capital efficient, with a large pool of talents
- Its innovation ecosystem is booming
- Demand is strong
- The country seems well positioned to leverage B2B innovation