France and thinking go together like Jean-Paul Sartre and Simone de Beauvoir. For centuries, French thinkers have sat in cafes and bistros, nursing their pastis and coming up with social, political, philosophical, artistic and literary concepts that would change the world.
The French, for instance, invented the clavecin electrique, which is the earliest electric-powered musical instrument, photography, cinema and the piano. They discovered hydrogen, oxygen, radioactivity and neon lighting. Aspirin, the hypodermic needle, blood transfusion and modern dentistry: all offspring of French brains.
But, much like Sartre and de Beauvoir, there were the occasional tiffs and missed opportunities. In 1973, Francois Gernelle built the world’s first microcomputer equipped with a microprocessor. Yet it was IBM and Apple who went on to build the computer industry. The French also came up with Minitel, an internet precursor which, despite offering services such as online purchases, making train reservations and chat, never achieved the same success as the internet.
History offers other instances where France failed to turn great ideas into profitable global products. Not any more, as France is nowadays investing heavily in research and innovation and how to turn ideas into viable business ventures. In fact, in the October 2013 ranking of the world’s most innovative countries by Thomson-Reuters Agency, France placed in third position.
The ranking is largely calculated according to a country’s patent policy: in 2013, the US dominated the top 100 with 45 patents taken out, ahead of Japan with 28 and France with 12 groups. This means that France is currently Europe’s most innovative country, ahead of Switzerland, Germany and Sweden.
The French government is supporting innovation and excellence through significant funding. The main fund is a €35bn national investment programme that supports higher education, research, industrial competitiveness, sustainable development and the digital economy.
In turn, French companies are investing heavily in research. In 2012, French companies allocated a budget of €38bn to research. According to the European Patent Office, in the same year, French companies took out over 12,000 patents. This success is mainly due to government’s policies, including the research tax credit, which is a tax reduction calculated on the basis of research and development expenses incurred by companies. The tax breaks are encouraging: 40 per cent of all research and development costs in the first year, 35 per cent in the second year, and 30 per cent in subsequent years up to €100m, and five per cent above this threshold.
To boost innovation and encourage investment in green technologies, the French government has also made available tax credits or deductions for companies working in the field of sustainable development. Financial aid for properties is also being adapted to help protect the environment.
French multinationals are at the forefront of this drive, especially in the areas of scientific research, aeronautics, alternative energy and cars. However, SMEs are also playing an important role even in areas which are usually the hunting ground of big boys. For instance, France was the first country to open its airspace to civilian drones, a market which is worth an estimated €2bn until 2015. Radio-controlled drones are used to draw up maps and inspect infrastructures.
Government is also making state funds available to commercialise research in IT. The National Fund for a Digital Society has identified five priority technologies: networked objects, IT security, cloud computing, big data and intensive calculations.
Sustainable energy is also an area in which France is excelling. French company Hydroquest develops and sells hydrokinetic turbines that harness the power of river currents to generate electricity. Another company, Algopack, produces a non-polluting plastic made from algae. Once buried underground, this matter retransforms into fertilising algae in a few weeks. The drive is to find more sources and uses for sustainable energy. Last September, the French government launched 34 industrial renewal plans which are intended to develop intelligent mobility: these projects include a car which consumes two litres of fuel per 100 kilometres, an electric plane, an ecological ship and cars of the future. According to McKinsey, these projects can provide over €45bn in added value.
This drive for innovation is creating interest from the rest of the world. In fact, according to IFA, on average, 13 foreign companies decide to invest in France every week. Moreover, more than 600 foreign companies have already joined an innovation cluster which brings together companies, universities and research laboratories on collaborative research and development projects with an international profile.
Key innovations
France has more than 70 innovation clusters in which companies, public-sector educational institutions and research laboratories work on collaborative projects focusing on market-oriented projects.
More than 5,700 collaborative research and development projects have been undertaken since 2005. More than one in 10 of these projects involved an entity based outside France.
The Paris-Saclay was recently ranked in the world’s top-eight innovation clusters.
France’s support for research and development is, at 2.26 per cent of GDP, higher than the average in European countries, which stands at 1.92 per cent.
In 2011, France submitted more than 7,500 new international patent applications.