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ELECTION

OPINION: ‘France is facing an emergency, the next election is decisive’

It is often said France is an impossible country to reform, but two business leaders tell The Local it must happen urgently after years of politicians making false promises and fake commitments.

OPINION: 'France is facing an emergency, the next election is decisive'
Riot police on duty during recent protests against labour reforms. Photo: AFP

Real structural reforms are now a matter of urgency if France wants to boost its flagging economy and cut high unemployment, François Asselin the president of the CGPME organisation representing small and medium businesses, has said.

“We have been promised reform too often in recent years. We’ve talked about what was necessary for years and nothing has ever been done,” said Asselin, seen in the photo below discussing labour reforms with former Prime Minister Manuel Valls.

“The next election will be a real watershed one for France,” warned Asselin.

(Francois Asselin meets the former PM Manuel Valls and Labour Minister Myriam El-Khomri. AFP)

Alexandre Montay, the general delegate of METI, another organisation that represents medium sized businesses, says France has stalled for the last 30 years and that its companies cannot now compete on an international level.

He claims the high payroll taxes in France compared to the rest of Europe and the heavy bureaucracy means French companies are losing out in an ever more competitive world.

“We lost control of our destiny 30 years ago. Now it’s an emergency,” he added.

“Most countries consider their businesses as strategic assets, a key to creating jobs and wealth. But in France, for the last 30 years, governments have considered their businesses simply as contributors to the national solidarity,” Montay said.

“The next presidential election is decisive. We need reforms put in place quickly.”

(Alexandre Montay. AFP)

In recent days and weeks the line-up for that “watershed” presidential race has become clearer.

Presidential frontrunner, the right wing candidate François Fillon, has promised “to tear the house down and rebuild it” in the same manner Margaret Thatcher did in the UK.

Socialist Manuel Valls stepped down as PM to throw his hat in to the ring accusing Fillon of promoting “the same failed recipes of the 1980s”. 

Then there is protectionist Marine Le Pen who wants to pull France out of the EU and restrict globalization and the business-friendly, centrist Emmanuel Macron who wants to unite progressives on the left and the right. More left wing candidates like Arnaud Montebourg and Jean-Luc Mélenchon are also in the running although seen as outsiders.

For whoever triumphs, the CGPME's Asselin spelled out exactly what needs to be done in a country with 10 percent unemployment and minimal economic growth.

“What we need now is real clarity and coherence,” he said. “The labour market is completely blocked because businesses are too scared to recruit. Everything is complicated. The regulations, the high taxes and the red tape are holding us back.

“We now need courageous people who will take tough decisions,” he said.

Asselin’s plea is an old one but he believes the French people are finally ready for change.

“The French are ready. We feel the French need us to tell them exactly what is happening and explain to them the world they are in. We can’t continue with this debt and with all these people out of work,” he said.

(François Fillon is promising sweeping reforms, but how much will he really get done. AFP)

Business leaders say it is vital for that economic questions are at the forefront during next year’s election campaign rather than questions of identity or religion which dominated the run up to the first round of the right wing presidential primary – until Nicolas Sarkozy was knocked out.

“Everyone talks about the fracturing of the French society, but what really fractures it is unemployment. A society has far fewer problems if the economy is growing,” said Montay.

The question is are the French willing to make sacrifices so that companies in France can become more competitive? Many will be loath to lose work and health benefits that have built up over decades for what they would see as helping businesses improve their profit margins.

And those cuts could be severe.

Presidential frontrunner François Fillon is promising €110 billion cuts over five years, to raise the legal working week from 35 to 39 hours and to raise the retirement age to 65.

He is targeting France’s generous health system by planning to force the French to buying extra private insurance for everything other than long term or serious illnesses.

(Fireworks thrown at police during labour reform protests. AFP)

But he’ll face resistance.

A new survey showed 84 percent of French people valued their social security system that covers healthcare and some 79 percent feared it was in danger.

Both business leaders accept that radical change will undoubtedly lead to militant street protests, particularly at the start of the next president’s term.

But Montay stresses France does not have to end up like the United States.

“There are countries like Sweden and Denmark which have a level of social protection but they have managed to keep the competitiveness of their companies by lowering corporation taxes,” he said.

“France will always be closer to the model of Germany and Scandinavia than the United States.

The French may be fond of their welfare state – deemed very generous compared to English speaking countries like the UK and the US, and their 35-hour work week but the CGPME’s Asselin believes most French people now accept things must change.

“The French need to accept certain sacrifices, that are not enormous, for example working 39 hours a week instead of 35. We are not talking about working 39 hours and getting paid for 35, we are talking about putting more money in the pockets of our workers.

“If we don’t make these efforts we risk losing everything,” he said.

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BUSINESS

What are the 26 French ‘unicorns’ hailed by the government?

France now has 26 'unicorns', something Emmanuel Macron's government sees as a major success. Here's what this means and how it affects France's future.

People dressed as unicorns attend a tech summit.
People dressed as unicorns attend a tech summit. France now counts 26 start-ups valued at more than $1 billion. (Photo by CARLOS COSTA / AFP)

In 2019, French President Emmanuel Macron set what seemed like an ambitious objective: having 25 French start-ups valued at over $1 billion by 2025. 

These companies are colloquially referred to as “unicorns” or licornes in French. 

The target was very on-brand. Macron had sold himself at a youthful, ambitious and liberalising president keen to lead France towards modernity. 

To achieve this goal, the government lifted regulations; hired liaison officers to manage relations between tech entrepreneurs and government ministers; created a new kind of visa to allow entrepreneurs, innovators and investors to move to France; and launched an incubator scheme known as the French Tech Tremplin (“French Tech Trampoline”) to help underrepresented groups such as women, poor people and those in the countryside to launch tech start-ups. 

Just three years later, it appears these efforts have paid off. 

“They told us that it was impossible – that creating a start-up nation was just an act. But collectively we have got there three years ahead of schedule,” said Emmanuel Macron on Monday, sporting a Steve Jobs-style polo neck as he celebrated the fact that France now had 25 ‘unicorns’. 

On Tuesday, La French Tech, a body run by civil servants aimed at creating a healthy environment for start-ups in France heralded another success – a 26th licorne

The latest addition is a company called Spendesk – it runs a platform that allows small and medium sized businesses to manage spending, expenses, budgets, payment approvals and invoices through a single integrated platform. It is already used by thousands of clients. 

Spendesk recently raised a further $100 million, pushing its overall value past the $1 billion mark. It plans to employ a further 700 people in France. 

La French Tech couldn’t contain its joy. 

“We don’t ask ourselves what is going on, we know it: #FrenchTech is booming #26unicorns”, wrote the organisation in its Twitter account. 

La French Tech claims that beyond the 25 ‘unicorns’ valued at $1 billion or more, there are a further 20,000 tech start-ups in France and that half of French people use their services daily. The organisation says that this sector has already created 1 million jobs – and that this figure should double by 2050. 

“French tech is obviously about more than these unicorns, but I see them as an example, a model for the rest of the ecosytem,” said Macron on Tuesday. 

So who are the other unicorns leading the way? 

Alan

This start-up was created in 2016 and offers health insurance coverage for individuals and businesses. What differentiates it from standard health insurance providers, or mutuelles, is that it functions through an easy-to-use app. Individuals can send medical bills directly from their smartphone and be reimbursed almost immediately. Doctors can be reached through the app’s messaging and video call services. Employers can manage arrêts de travail the comings and goings of poorly staff directly through the interface. It is currently available in France, Belgium and Spain, counting 230,000 members. 

Ankorstore

Ankorstore is an online marketplace aimed at supporting independent wholesalers – from florists to concept stores. It pitches itself as a platform to buy “authentic products and brands that e-commerce giants such as Amazon do not offer.” It is present in 23 European countries with offices in France, Germany, the Netherlands, Sweden and the UK.

BlaBlaCar

This carpooling service has more than 100 million members across 22 countries. It connects drivers with people looking for a lift on a highly accessible app and website based platform. BlaBlaCar allows people to save money on transport and said that it saves 1.6 million tons of CO2 emissions in 2018 through ride-sharing – the platform has grown significantly since then. This company has also started running a bus service, BlaBlaBus. 

BlaBlaCar launched BlaBlaBus in 2019.

BlaBlaCar launched BlaBlaBus in 2019. (Photo by PHILIPPE DESMAZES / AFP)

BackMarket

Backmarket is a website for buying used, unused or reconditioned electronic devices. The company sells everything from cameras, to laptops, to iPhones – at well below the market rate. Many of the products come with a warranty. The company is keen to emphasise its role in reducing electronic waste and carbon emissions involved in manufacturing new products.

Contentsquare 

This start-up has existed since 2012. It acts as a tool to allow website and app designers to monitor how their users behave while on their webpage/app. Contentsquare provides analytical information that can help to tailor websites to improve the digital experiences of users. 

Deezer

Deezer is an online music streaming services similar to Spotify. It was founded in 2007 and counts 16 million active users. 

Doctolib

Doctolib is a platform that connects patients to medical professionals. Creating an account is free and allows you to book medical appointments, with filters such as the kind of care you want, the area of the medical practice and the languages spoken by the doctor. It runs via a user-friendly app and website and is available in France, Italy and Germany. During the Covid-19 pandemic, it has become the main way that French people have booked vaccination appointments. 

Exotec

This company was founded by two engineers in 2014 and manufactures intralogistic robots. The technology is used in warehouses of retailers, supermarkets, e-commerce and industry. In essence, it is used to remove human labour from the supply chain. 

iad

iad is a network where people can sign up to learn how to become an independent real estate agent – it also serves as a site where people can look for property to buy or rent. 14 percent of all properties sold in France in 2020 went through this platform according to one study. 

Ivalua

Ivalua is a tool used by organisations to manage spending and supplies. It operates largely though Artificial Intelligence and provides a wide range of functions designed to improve collaboration and decision-making. 

Ledger

Ledger is a company that provides individuals and businesses an easy way to buy and sell cryptocurrencies and store these currency on USB-type hardware. If you get sick of that guy at work who never stops talking about Bitcoin, this is probably not one for you. 

Lydia

This is a payment app that allows people with French bank accounts to send and receive money with other users, and is often used by friends to reimburse each other with small amounts for dinner, drinks, holidays etc. If you hold your savings in the app, you can benefit from a 0.6 percent interest rate. It also allows you to pay for things overseas without incurring fees. 

ManoMano

ManoMano is an online marketplace specialised in DIY and gardening equipment. It employs 800 people in 4 offices and operates across 6 European markets: France, Belgium, Spain, Italy, Germany and the UK. It’s website sells products from more than 3,600 retail partners and stocks more than 10 million products. 

DentalMonitoring

Patients can download this app after undergoing dental work. They can then use the secured system to send pictures of their teeth to their dentist (if the dentist is subscribed to the service). The start-up boasts that it can allow dentists and orthodontistes to carry out remote consultations and that the AI technology embedded in the app can automatically detect dental problems. 

Meero

Meero is a company that connects professional photographers to clients and vice versa. It organises one photo shoot every 25 seconds and has more than 30,000 customers around the world. 

Mirakl

Mirakl is a cloud-based e-commerce company that allows retailers, manufacturers and wholesalers to access a single online market place. The start-up aims to help other businesses scale-up their operations rapidly and describes its staff as “Mirakl workers” (as in the French ‘miracle’ pronounced me-rackluh). 

OVHcloud

This start-up was founded in 1999 and is now Europe’s biggest cloud provider, offering both public and private information storage solutions. They also provide domain name registration, telecoms services and internet connection. 

PayFit

Payfit is an automated payroll service that allows employers to save time dealing with spreadsheets and other systems. It is an intuitive bit of software already being used by 6,500 small and medium-sized businesses.

Qonto

Qonto provides financial services to freelancers, self-employed people, small businesses, charities and new businesses. It provides solutions for managing expenses, accounting, invoices and payments. 

Shift

This company is based in Paris and helps global insurance companies to detect fraudulent insurance claims via artificial intelligence technology. 

Sorare

This is a fantasy football game where users build and manage squads, trading, selling and buying players. It makes use of blockchain technology. French footballer Antoine Griezmann is a major investor. 

A tradable player card from Sorare.

A tradable player card from Sorare. Credit: Sorare

Swile

This is a financial and networking service for businesses and employees. It essentially is a bank card with an app that allows employers to issue anonymous surveys to employees, facilitate communication via a messaging service, organise collections and plan events. 

Vestiare Collective

This is an online marketplace for second-hand luxury fashion. Be aware that some items still cost thousands of euros, so they’re only ‘bargains’ in relative terms. 

Veepee

This is an online and app-based service. Users can create an account for free to be alerted of upcoming sales of up to 70 percent on their favourite brands. It is available in eight European countries including the UK. 

Voodoo

Voodoo is a French mobile game developer and publisher. It provides help for video game developers to promote their work and councils them on the development process. In the past, Voodoo has come under fire for producing games that appear to be closely modelled on other games already on the market.

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