Inside France’s startup world: seven key stats

French tech startups are in rude health according to a new survey with takings on the up, especially abroad and most are planning to recruit new staff. But the industry remains a man's world.

Inside France's startup world: seven key stats
French Finance Minister Michel Sapin tries out virtual reality technology as he visits a startup incubator in the south of Paris. Photo: AFP

The new survey by France Digitale in conjunction with EY (Ernst and Young) revealed that French startups are in for the most part in fine fettle and, in what will be music to the government’s ears, most are looking to recruit new staff.

The survey was based on the performance of 171 French tech startups during the year 2014 and the news is largely positive.

Here’s a look at some of the key points from the survey.

Rude financial health

The startups surveyed by France Digitale revealed that turnover was up an average 37 percent in the previous 12 months.

In total terms this figure was up from €2.1 billion to €2.9 billion. For international business activities, the jump was even more positive, rising 57 percent in the past 12 months to a total of €1.2 billion.

“The pillars of the growth of these companies are innovation and internationalization,” said Franck Sebag, from EY, who was in charge of the survey.

Nothing ventured, nothing gained

A quarter of the startups surveyed by EY Ernst & Young at the recent France Digitale Day event in Paris said they had received investment from French venture capitalists.

The average amount raised was €3.3 million. According to the survey investment from venture capitalists remains one of the essential conditions to allow French startups to be successful abroad.

Boost in staff numbers

The number of staff employed in French startups rose by 30 percent between 2013 and 2014.

That means 1,476 jobs were created in France and 756 positions created abroad.

The notion that startups will only hand out temporary contracts (CDDs in France) while the seek financial stability also appears false with 92 percent of the job contracts given out being permanent, or CDIs as they are known in France.

A full 88 percent of the startup firms surveyed at France Digitale Day said they were looking to hire in the next 12 months, a sign companies are facing the future with optimism.

SEE ALSO: Paris is no harder than London for startups

A man’s world

Only 9 percent of the founders of the nearly 200 startups surveyed had a female director.

Education matters

Almost all of the founders of the startups had at least a Masters degree. The figure was 94 percent. For regular staff at startups, that figure is still a high 69 percent.

Youth matters

The image of tech startups being staffed by young, dynamic post graduates is only slightly off the mark with the average of employees being 31. However management have been around the block a little more with the average age being 41.

Tax credit relief for most

A key element in making a success of it as a startup in France is access to various tax credits. As many as 81 percent of companies benefit from Tax Credit for Competitiveness and Employment (CICE) that was created in 2014. Some 71 percent of startups also benefit from other tax credits for research (CIR) and innovation (CII) as well as being a new business.

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France is ‘Europe’s most innovative country’

France can consider itself Europe's most innovative nation and the third in the world after a new study published on Thursday looked at the number of patents lodged in each country.

France is 'Europe's most innovative country'
Photo: Nana B Agyel/Flickr

The study by Thompson-Reuters looked at the the ‘100 most innovative organisations and enterprises' in the world.

And with 10 French companies making the list, France was the best represented country in Europe and was only outdone by Japan and the United States, which dominated the rankings with 40 and 35 companies included respectively.

The French companies singled out by the study for their innovation were Alcatel-Lucent, Alstom, Arkema, Safran, Saint-Gobain, Thales, Baleo and the organizations CEA, CNRS and IFP.

The study calculated the number of patents filed in each country, the rate of accepted patents compared to those which are registered, the geographical range of the patents and their influence. 

“The amount of patents isn’t everything,” explains Dominique Ducay, Direcor of Strategy and Intellectual Property at Thompson-Reuters. “In the study we are very interested in the quality of these patents, as well as their influence.”

Ducay said that the industries which were developing most rapidly were the automobile, pharmaceutical and chemical industries,

In order to take part in the annual study, now in its fifth year, businesses must have developed “at least 100 inventions over the past five years,” says Ducay.

Germany and South Korea took fourth and fifth place in the study with, respectively, four and five companies listed. Perhaps unexpectedly, neither the UK nor China feature in the top 100.

Ducay points out that in the UK, investment in research and development is not given the same priority as in the countries higher up the list. It represents just 1.63 percent of GDP compared to 3.47 percent in Japan, 2.73 percent in the United States and 2.23 percent in France, according to the study.
In October, Paris was rated as the sixth best European city for startups and for scale-ups, according to the European Digital City Index for 2015, which ranked the French capital ahead of Berlin.