France has much to offer businesses and foreign investors.
France’s economic attractiveness is booming and is attracting a growing number of foreign investors. According to the AT Kearney annual rankings, France placed in the “Top 5” most attractive countries for major international investors in 2018. Let’s take a look at the French economy – beyond the clichés.
6 facts about the French economy:
With GDP of $2,762 billion at current prices in 2019, France is the world’s seventh-largest economy after the United States, China, Japan, Germany, India and United Kingdom (IMF, April 2019). It is also Europe’s second-largest market with over 67 million consumers. France is home to 29 of the world’s 500 leading businesses (Fortune Global 500, 2017). The French economy goes beyond the well-known economic sectors of luxury goods and agrifood but also has strong banking and insurance sectors as well as energy and automotive industries.
21 foreign companies choose France for new investments every week. There are over 28,000 companies with foreign capital in France, employing 11% of the workforce. They make up 21% of work in industry, 30% of French exports and 21% of domestic R&D expenditure. France is ranked 10th for Foreign Direct Investment (FDI) stock (source UNCTAD, 2017).
In 2018, France’s attractiveness improved further and France was chosen to host 1,323 foreign investment projects, a figure which exceeds that of 2017 (i.e. 1,298) which was already a record.
As a founding member of the European Union and Eurozone, France also has direct access to the single European market and EU partners. Its strategic geographical location and high-quality transport infrastructure make France a hub for easy access to other countries, continents and geographical regions like EMEA (Europe, Middle East and Africa). France is ranked 8th of 137 economies in terms of the quality of its infrastructure according to the 2018 Global Competitiveness Report. It has the world’s second-longest high-speed rail network.
Paris is behind Beijing and Tokyo but above London and New York in the ranking of cities that are home to the most Top 500 businesses’ headquarters (27 headquarters). With asset management business of €4 trillion (i.e. over 1.5 times France’s GDP), Paris is a global financial centre and the European leader in venture capital with €3.6 billion raised in 2018. The city is also top of the capital investment market ranking in the EU, with €12.4 billion invested in 1,400 businesses in 2016. Four French banks are in the global banking top 20.
France is the leading business creator in Europe. France saw a record number of 691,000 start-ups in 2018, buoyed by a 28% increase in micro-enterprises, as well as in regular one-person companies (up 20%). It takes only 3.5 days to create a business in France, compared to 4.5 in the UK and 10.5 in Germany. The French “entrepreneurial intentions” rate is one of the highest in Europe. In 2018, 50% of 18-24 year olds stated that they wanted to set up a company. With Station F, which aims to become the world’s largest start-up incubator with capacity to host 1,000 start-ups, France is stepping forward as a “Start-up Nation”.
France is investing heavily in its education system (5% of GDP). It has a highly qualified, adaptable workforce which can master new technologies, which are essential to increase productivity. Some 44.7% of the population aged 25-34 and 33.5% of the population aged 25-64 have a higher education qualification. France also ranks 7th in the world for hourly labour productivity, ahead of Germany (8th) and the UK (18th) (source Conference Board, 2017).
With domestic research and development spending equal to 2.2% of GDP, France ranks 6th in the world according to the World Competitiveness Yearbook 2018 (behind the United States, China, Japan, Germany and Korea). The five main R&D investment sectors are cars, aircraft and spacecraft manufacturing, pharmaceuticals, scientific and technical activities, and IT and information services. France specializes in growth areas such as biotechnology and environmental technologies.
France hosted 144 R&D centres in 2018 (up 85% on 2017), making it the most attractive destination for innovation investment in Europe. France is getting better and better at taking on its key role in the European R&D and innovation economy according to the 2019 EY Attractiveness Survey. France attracts more projects than Germany and the UK combined.
French scientific excellence has led to numerous large corporations establishing R&D centres in France. For example, several large foreign tech companies have chosen Paris as the location to carry out their research work on AI. Such businesses include Facebook, present in France since 2015, but also Google, Fujitsu, Samsung and Microsoft, which is developing an ambitious training plan with Simplon in France, with the aim of raising awareness of issues surrounding AI among 400,000 people of all profiles.
In 2017, the government set itself the goal of making France a “Start-up Nation”, and, on 15 January 2018, created a fund of €10 billion to finance innovation, which will be endowed by sales of public assets.
- Click here to find out more about the “French Tech” initiative for start ups and international talent
It is based on four priorities:
- €20 billion to boost the ecological transition (improving mobility, increasing renewable energy production);
- €15 billion to create a skills society (training and improvements to initial education);
- €13 billion to promote innovation as the key to competitiveness (supporting scientific excellence, improving innovation in businesses);
- €9 billion to build digital State services (improving the quality and accessibility of public services, boosting the digitization of the health and social cohesion system).
Business France’s welcome service for international talent, the Welcome Office, provides all the necessary information on:
- life in France,
- conditions for living and working in France,
- personal tax matters,
- social security for your household,
- and everything else you need to know about everyday life in France (schooling, housing, driving, etc.).
Updated: July 2019