Brexit, trade wars: So how are France's tech reforms holding up?

Amid European and global uncertainties, France has been working on gender equality and attracting tech talent.

France levies 3% turnover tax on world's largest tech companies Tech companies making €750 million globally and €25 million in France will have to pay the new tax.

French president Macron's reform agenda is gaining momentum. In the startup ecosystem, his French Tech Visa is drawing in foreign talent, while his goal of achieving male and female equality in France has increased the number of women-oriented initiatives.

Despite consultancy EY's recent European Attractiveness survey showing that foreign direct investment (FDI) dropped in France by 1% in 2018 after soaring to 31% growth in 2017, the number of French R&D and manufacturing FDI projects grew from 144 to 339 to give it more than other European countries.

SEE: Digital transformation: A CXO's guide (ZDNet special report) | Download the report as a PDF (TechRepublic)

EY global managing partner Andy Baldwin believes that Brexit and other political and economic uncertainty is reducing investment in Europe, but that France's R&D momentum will continue.

"France continues its FDI progress, albeit at a slower rate, now tying with the UK, which it will likely overtake in financial year 2019, as long as Macron's reform agenda continues," he says, adding that it needs to continue to invest in "technology and provide access to an agile and skilled workforce" because this drives foreign direct investment.

One way to optimize a workforce is through gender equality. France introduced a 40% gender quota law in 2012 and a few years later McKinsey released a landmark report stating how economic gender parity could add $28 trillion, or 26%, to annual global GDP.

As well as pushing for France to be a 'startup nation', Macron has heavily backed policies for gender equality in France, starting with females making up 40% of his party's members of parliament when he came into power.

At the start of 2019 France took over the G7 presidency, with Macron making French feminist diplomacy the leading priority by assigning 50% of public development aid to support gender policy.

The president also renewed the G7 Gender Equality Advisory Council, which released a declaration from ministers in May 2019 highlighting women's economic empowerment as central to achieving gender equality. Promoting women's entrepreneurship, particularly in Africa, where so many socio-economic barriers exist, was also flagged as a top priority.

According to the World Bank's report on Women, Business and the Law, France has improved the most among the leading economies in giving men and women equal legal rights.

By "implementing domestic violence law, providing criminal penalties for workplace sexual harassment and introducing paid parental leave", it has moved from 91.88 out of 100 to a top score of 100, along with Belgium, Denmark, Latvia, Luxembourg, and Sweden.

Station F, which has become a symbol of France's revitalized entrepreneurialism, recently announced it will be hosting F for Femme on October 1, 2019. High-profile women in the tech industry will come together to discuss best practices for a more inclusive ecosystem.

"Diversity has always been one of the core values of Station F," says Roxanne Varza, director of Station F. "We now have more than 45% of female-founded companies in five of our startup programs and more than one-third of our residents are women. We want to push this forward."

Since it launched in 2017, there's been a shift in where Station F's startups originate from. Now one-third come from overseas. While the US still leads, China is now in second place instead of the UK, and North African countries Morocco and Tunisia make up third and fourth place as the sources of new startups.

France's new French Tech Visa – which has been used by 430 companies to expand their teams since launching on March 1, 2019 – is free for all who apply, allows applicants to bring their families and lasts four years.

"The French Tech Visa for employees was a priority for a simple reason: our fastest-growing startups told us they needed it," says Kat Borlongan, director of La French Tech.

"Instead of just another visa, this new version provides our startups with a real edge over competitors around the world."

Because renting a property can be difficult for self-employed people, Station F has also opened a three-tower co-living complex, containing 100, six-person apartments to accommodate 600 individuals. They are located 3km away in Ivry-sur-Seine and room rates start at a highly affordable €399 per month.


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But it isn't just foreign talent France wants to attract. It aims to discover local talent, too. Through an initiative called French Tech Tremplin, the government is looking to increase the diversity of the ecosystem by supporting budding French entrepreneurs who are marginalized or being held back by socio-economic barriers.

It includes a financial boost, a co-working space, equity-free funding, and desk space at a partner incubator.

Two years ago, Cédric O, the French secretary of state for digital affairs, announced France's goal of creating 20 unicorns by 2025. Meero, a government-backed French startup recently raised $230m, leading it to join France's select group of tech unicorns: BlaBlaCar, Doctolib, Deezer, OVH, Kyriba, Ivalua, and Veepee.

Borlongan credits Macron's reforms with the surging momentum of the French Tech ecosystem.

"Under president Macron's leadership, our government has established an active pro-startup policy, allowing us to make bold moves in record time," says Borlongan.

"For example, the French Tech Visa was created and rolled out in under four months. The French Tech scene is picking up speed at an unprecedented rate."