Essec Business School

Is France entrepreneur-friendly?

Too often, we hear that France is not the ideal place to start a business. I argue, on the other hand, that France can in fact be a veritable entrepreneur’s paradise.

Let's be clear: I'm not talking about the economy in general, but rather the entrepreneurial environment. And I’m not here to say that France doesn’t have its shortcomings.  

Today I’m going to talk about entrepreneurs, or rather about a particular type of entrepreneur: the opportunists, or those who start businesses to create growth and often benefit from advantages like a university education.

This type of entrepreneur is different from those who start businesses out of necessity, who generally keeps things small, working for themselves in lieu of an employer.

This is an important distinction, which has been established by several management researchers.

What are the strengths of the French entrepreneurial ecosystem?

First, it’s important to point out that for an entrepreneurial ecosystem to be deemed strong, it doesn’t need to be perfect all around.

On the one hand, some important, basic requirements need to be met. We call these hygiene factors, which include transportation infrastructures, administrative services, legal frameworks, etc.

France fulfills all of these hygiene factors, therefore, the foundations are strong even if some aspects aren’t perfect.

On the other hand, real opportunities appear when other, more critical factors are met. These factors contribute to what we call Entrepreneurship Explosion.

France has a wonderful portfolio of opportunity factors, namely: human capital, the ‘made in France’ brand, and a welfare state. For this last factor, remember that every great high-tech ecosystem relies on military spending.

In addition, we have a large number of clusters: areas where a critical mass of activity helps achieve excellence. For example, France’s high-tech, services, luxury, and energy industry clusters offer entrepreneurs a rare, wide range of possibilities.

What can we say to the critics who call out expenses, administrative difficulties, and rigid labor laws into question?

Of course, nothing is perfect, and the French system can sometimes be frustrating.

One should always keep these two things in mind, however:

• Starting a business is never a walk in the park – pain is always part of the game.
• And the critics need to remember that it’s rarely easy elwhere.

Here are two examples:

In regards to administrative processes, according to a recent ranking by the World Bank, France comes in ahead of all other major Western countries ... once legal costs are taken into consideration. Indeed, legal fees can be very high in the more punitive Anglo-Saxon countries.   

Those who focus only on the administrative factors do not see the problem in its entirety and ignore France’s true strengths.

Where taxes are concerned, whenever a French person makes their fortune in the USA, the last thing they’ll want to do is become an American citizen. This is because the American taxation system is a lot less flexible than the system in France. You’ll sometimes hear French entrepreneurs go so far as to call France a tax haven.

The aim of my book "Oui la France est un paradis pour les entrepreneurs!" is to recognize our strengths, especially for those thinking about starting an entrepreneurial adventure.

For the young – and the not so young – entrepreneurship can be an exciting, yet challenging adventure. And here in France, we benefit from a great ecosystem.