Investing in France

Capture d’écran 2012-12-12 à 13.37.31

It's good that others are investing in France, it's even better that France is investing

If the prevailing protectionism and state interventionism can upset the attractiveness of the French territory, the fact remains that France remains a land of foreign investment, even if the trend is not positive, and could even deteriorate when the 2012 assessment is made.

For the time being, in the last full year of 2011 (report by the French Agency for International Investment), Europe hosted 29% of job-creating foreign investment, and France, by hosting 40 billion in foreign direct investment, was in second place behind the United Kingdom... before giving up this position to Germany in the course of 2012, according to the Ernst&Young study

The investments, which remain high in absolute terms, can certainly be comforting and encourage us not to indulge too much in a masochistic habit towards our own country, but they must not mask the negative and worrying trend that is taking shape over the years. The risk is that France will simply not be perceived as a rising star, in tune with the new economic situation, capable of making the most of assets that are surely too often considered as immutable assets.

The difficulty to reform, to open up to the world, and to build a long-term vision and strategy rather than a series of knee-jerk reactions, risks becoming a structural handicap.

This is all the more paradoxical given that France is already a largely open country, probably more so than we think, or, for some, than we would like: the stock of foreign investment in relation to GDP amounts to nearly 40% in France, which is less than in the United Kingdom (nearly 50%), but twice as much as in the United States or Germany. Non-resident" investments held 43% of the CAC 40 at the end of 2011. These "foreign" companies established in France account for 31% of French exports, employ nearly 2 million people, i.e. 13% of the salaried workforce, and even 25% of employees in the industry sector (31% of the turnover of French industry). There are many examples of French assets held by foreigners. One can legitimately be moved by this, but one can also be pleased with the attractiveness of these economic and cultural heritages. We can also recall, as François Chérèque quite rightly did in March 2011 regarding the takeover of Yoplait by General Mills, that " the important thing is not the nationality of the fund that buys Yoplait but its behaviour!" . Yes, it is not the nationality of the owner that defines its social policy.

Moreover, not everything should be focused on industry, the trend is elsewhere, including in terms of foreign investment. According to the French agency Invest-in-France, it is the activities with high technology and added value that are attracting more and more foreign investment to the country. In these areas, the trend is positive. Moreover, even in terms of industry, not everything should be focused on industrial sites such as Florange or Gandrange, as they do not sum up, nor are they, the future (or even the dream) of French industry (see editorial of Tuesday 3 April 2012).

Nor should everything be focused on foreign investment in France: French investment abroad is just as important: while more than 20,000 foreign companies are present in France, 30,000 French companies have a presence abroad. These French establishments abroad are systematically seen as relocations, but it is also the capacity of French companies to conquer foreign markets. The French brand is not just made in France (which is not always done by French companies, as I mentioned earlier), it is also the made by France which is establishing itself on foreign markets. There is something of a paradox in wanting to defend France at all costs as a land of investment and future, and at the same time wanting to protect ourselves from it and to view the performance of 'our' brands on certain world markets in a very negative light. France cannot be strong at home if it is not strong in the world.

Reciprocity and balance means considering that the future of France also depends on foreign countries, and therefore, the ugly word, on globalisation. The renewal of the French automotive sector will undoubtedly involve both innovation (and design, please) via new energy-saving breakthrough technologies, attractive price positioning, and the ability to export to a sluggish European, and especially French, market.

Most countries take pride in seeing their economy conquer the world, we lament seeing them conquer our economy.

Tuesday's editorial on atlantico

Leave a Reply