Five of France’s key advantages for attracting foreign investment: market size and location; an R&D-friendly environment; a highly qualified and productive workforce; buoyant enterprise creation; and a high-quality, infrastructures.
Market size and location
With a GDP of US$2,847 billion at current prices, France was the world’s sixth largest economy in 2014 after the United States, China, Japan, Germany and the United Kingdom.
France’s location, combined with first-class multimodal transport infrastructure, makes it an ideal springboard to other countries, continents and world regions, encompassing Europe, Africa and the Middle East.
France also boasts a buoyant demographic profile, and is the leading country in Europe by fertility rate, verging on two live births per woman.
Highly qualified, productive workforce
With an outlay on education equivalent to nearly 7% of GDP, France is one of the countries that invests the most in its education system.
Labor productivity is high in France on both a per-employee and hourly basis: France is ranked seventh in the world for hourly labor productivity.
Moreover, France has seen a marked improvement in cost competitiveness across the French economy in 2015. In 2013 and 2014, the competitiveness and employment tax credit (CICE) reduced labor costs in France by 3.3% across all tradeable sectors, according to INSEE estimates. In late 2014, hourly labor costs in French industry were €37, compared with €37.10 in Germany. Furthermore, corporate profit margins in France are also rising.
A land of innovation
France is ranked sixth in the world for gross domestic expenditure on research and development, with US$55 billion, after the United States, China, Japan, Germany and South Korea. Four sectors account for more than half of all business enterprise R&D expenditure in France: the automotive industry; the pharmaceutical industry; radio, television and communication equipment; and the aerospace industry. R&D intensity has increased 15% since 2007 to a new high in 2013.
Among the 14 sample countries in the Scoreboard, France was ranked fourth in 2013, after Finland, Sweden and Austria, for the number of R&D personnel per thousand labor force. More than 35% of all jobs in France are in science and technology, requiring advanced qualifications.
Moreover, the French tax system offers the most generous R&D tax treatment in the world, thanks to France’s research tax credit. In 2012, more than 15,000 businesses benefited from the research tax credit. The number of industrial researchers rose 22% between 2008 and 2012, as 28,000 high value-added jobs were created.
With 86 companies in the 2014 Deloitte Technology Fast 500 EMEA, France outstripped all its European counterparts as the leading country for fast-growing technology companies in Europe, the Middle East and Africa. France is also the third leading country in the Top 100 Global Innovators, with 10 French entities among the 100 most innovative organizations in the world. They include three research centers (CNRS, CEA, IFP Energies Nouvelles) and seven companies (Alcatel-Lucent, Alstom, Arkema, Safran, Saint-Gobain, Thales and Valeo).
A land of enterprise
France is making life simpler for entrepreneurs. In 2014, only four days were needed to found a company in France, compared with 4.5 in the United Kingdom and 10.5 in Germany. Among the 14 sample countries in the Scoreboard, only in Belgium (4) and the Netherlands (4) is it possible to start doing business more quickly.
The United Nations ranks France fourth in the world and first in Europe for e-government. (United Nations E-Government Survey, 2014)
One of France’s strengths lies in the low business costs it offers foreign companies. According to KPMG’s Competitive Alternatives 2014 survey, total business operating costs are 2.6% lower in France than in the United States.
France is a very buoyant market for net enterprise creation, posting compound annual growth of 2.6% between 2009 and 2012 through a net increase in active enterprises of 222,350 over three years. In 2014, 550,700 businesses were founded in France, up 2% from 2013. This increase arose from growth in company formations (up 4% from 2013) and new sole proprietorships (up 3%).
High-quality infrastructure: France has first-class airports Paris-Charles de Gaulle is Europe’s second largest airport for passengers after London Heathrow and second largest for cargo after Frankfurt – as well as very attractive energy access, with a cost-effective and reliable electrical grid – electricity rates among the most competitive in Europe – and an excellent broadband penetration rate (ranked second among our sample countries.
France's key advantages
See more and download the publications :