Five ways France must improve its economy, according to the experts
The French economy isn't growing as quickly as it needs to, which is having an effect on job prospects, living standards and well-being, according to the latest report from the OECD. Here are five ways it suggests France could improve.
Published: 11 April 2019 17:53 CEST
Photo: AFP
The French economy has slowed down, according to the results of the latest study from the global economics organisation, the OECD, which argues that France should focus on long-term strategies to create growth, improve public finances, create more and better jobs and ensure a more inclusive and cohesive society.
Here's a look at five ways it suggests the country could do this.
More reforms
The OECD report pushes France to keep on with its economic reforms despite the “yellow vest” movement which has pushed back against them.
“There is a real need to address the social challenges of long-term unemployment, difficulty in joining the labour market and weak social mobility,” OECD Secretary-General Angel Gurría said.
“The government has undertaken courageous reforms to boost economic activity, increase the disposable income of low-wage earners and put public finance on a firmer footing.”
The OECD said that French President Emmanuel Macron's reforms could add 3.2 percent to per capita GDP over the next decade, benefiting mostly middle and lower-middle income households.
Even more ambitious reforms in line with OECD recommendations – such as faster spending cuts and raising the retirement age – could lift that figure to more than 5 percent, added the OECD.
“Continuing pro-growth reforms, in line with recent measures, is key to further reducing unemployment,” the OECD report said.
Flexibility within the labour market
One of the things the OECD would like France to achieve with further reforms is flexibility in the labour market.
While the organisation acknowledges that recent reforms in France have promoted a “more flexible labour market”, it says short-term contracts have “rapidly increased” which encourages breaks between employment.
Photo: AFP
“Containing the use of short-term contracts would require increasing the relative cost of short-term hiring and reforming the unemployment insurance system so that it does not encourage recurrent short-term employment periods and unemployment spells,” said the report.
“Moreover, favouring workers’ mobility would help match job offers and job seekers.”
The report stresses the need for France to improve the quality of public spending which would improve the country's economy and potentially allow for lower tax rates in the future, particularly on labour.
“France should capitalise on this reform agenda and take further measures to improve public spending efficiency, increase high-quality jobs and ensure that the economy of the future works for everyone.”
The organisation said that France should be investing in improving the quality of education and reforming training programmes to strengthen the skills of workers and include low-skilled workers in the labour force.
France must improve its digital infrastructure which is much further behind countries with the best performing economies, said the OECD.
“The quality of the digital infrastructure could improve significantly. Efficient, reliable, and widely accessible digital infrastructure will be key to reap the full benefits of digitalisation,” said the report.
It went on to say that France should also invest in digital resources to carry out public administration tasks, which would “contribute to increase public spending efficiency”.
France needs to make sure its transport and energy investments better tackle environmental challenges, according to the OECD.
“The transport sector accounts for a large share of pollution and emission reductions have been slow, while urban pollution remains high in some cities,” said the OECD. “Infrastructure planning needs to better reflect health and environmental costs and be consistent with government’s targets for reducing greenhouse gas emissions.”
The OECD also said that better transport systems would help “increase the efficiency of local labour markets.”
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.
Published: 18 January 2022 16:29 CET
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’.
25 licornes françaises : nous y sommes ! Ces 25 startups valorisées à plus d'un milliard de dollars, et avec elles toute la French Tech, changent la vie des Français, créent des centaines de milliers d'emplois partout en France, font notre souveraineté ! Ce n'est qu'un début. pic.twitter.com/1BRrLMcM3o
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.
On ne se demande pas ce qu'il se passe, on le sait: la #FrenchTech fait boom #26licornes Félicitations à toute l'équipe de @Spendesk (solution de gestion des dépenses professionnelles pour PME). En vue: 700 recrutements (!) et la conquête de l'Europe. https://t.co/wDn9tJBdQN
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. (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. 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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