The GEN Atlas Country Deep Dive is a monthly exploration of the startup support policy landscape in selected countries, drawing upon entries from the GEN Atlas compendium of entrepreneurship policies. We offer a holistic overview of what each country is providing, identifying success stories, gaps in provision and always looking for insight that can be shared across borders around the world. Our analysis of each nation’s startup support is built around eight overarching themes:
- Finance: New types of capital for startups and scaleups at the right time
- Education + Skills: Embedding enterprise and entrepreneurship into education and providing (both existing and potential) entrepreneurs with mentoring, training and support
- Market Access: Expanding access to markets for startups domestically and abroad
- Inclusivity + Culture: Ensuring that entrepreneurship is a culturally attractive vocation for all sections of society and in particular that people from disadvantaged groups have an equal opportunity to launch and grow a business
- Regulation: Removing regulatory barriers to innovation and startup success
- Ecosystem + Economic Development: Developing and managing local ecosystems to better support entrepreneurs, startups and scale-ups
- Science, Technology and Innovation: Utilizing the latest advancements in science and technology to improve productivity, boost economic growth and solve societal problems through innovation
- Policy Making: Maintaining a data-driven, effective and coherent policy making process that supports entrepreneurs and ensures public awareness of available programs
George W. Bush reportedly once joked that the problem with the French is that they have no word for entrepreneur but that was long before the Presidency of Emmanuel Macron who has made entrepreneurship a central theme of his tenure. The French startup ecosystem has been experiencing something of a golden age and for the first time in history has overtaken Germany to become the 2nd largest ecosystem in Europe with only the UK ahead of it. France can now boast 28 unicorns having come from a position where they had zero just 10 years ago including the likes of BlaBlaCar and Doctolib. French startups have also been raising record amounts with €13.5 billion raised in 2022, up from just €3.62 billion in 2018.
These impressive results have been underpinned by a collection of public policy initiatives and the active promotion of the startup ecosystem by President Macron not least of all through the France 2030 plan. According to France Digitale, the benefits of this action have been widespread with 1.1 million jobs created by startups in the last 10 years with the average startup creating 30 jobs. Moreover, these jobs have not been concentrated solely in Paris, with 40% created outside the region of Ile-de-France. While Paris remains dominant, other cities such as Lyon, Lille and Marseille are significant players with each of their ecosystems valuing over $3 billion according to Startup Genome.
Finance
The French government has truly put its money where its mouth is through the creation of BPI France which is a public investment bank that offers a wide range of financing solutions aimed at entrepreneurs, including startups loans, loan guarantees, co-investment and equity funding. In 2022 alone, BPI invested €726 million in 149 companies through its innovation capital, alongside €854 million funneled into venture funds and €580 million worth of loans issued. This follows total investments worth €105.6 billion supporting 1.1 million SMEs between 2013 and the end of 2021.
Additionally, the French government has also ensured that it has one of the most favorable R&D packages in Europe with an implied tax subsidy rate for SMEs of 36%, second only to Portugal. Likewise, regulation that impacts crowdfunding has been reformed to make it easier for entrepreneurs to raise money for their ventures.
Education + Skills
France has invested heavily in promoting digital skills amongst its citizens. The National Plan for Digital Inclusion was launched in 2018 with the aim of ensuring that all citizens have access to digital technology and can take advantage of its opportunities. The initiative is designed to bridge the digital divide by preparing French citizens for the modern age, giving them access to their rights and information digitally. The program is to provide digital training a total of 4.5 million French citizens with basic digital skills by 2028.
In addition to this ‘1, 2, 3…Codez’ is digital literacy initiative focused on providing coding education for school age children. The primary objectives of the program is to create an engaging and interactive curriculum that effectively teaches coding skills and develops a digitally competent generation. This program is estimated to have reached 400,000 students in the space of just two years.
Market Access
The French Tech Visa is a streamlined process that sits as part of La French Tech Initiative. The program is designed to facilitate the immigration of international tech talent into France by providing a multi-year residence permit. This visa program caters to three main categories of tech professionals: founders of international start-ups who wish to establish and develop their businesses in France, employees who are recruited by innovative French companies, and investors looking to invest in the French tech ecosystem. It aims to bolster the French tech sector by making it easier for non-EU citizens to work in highly qualified positions within innovative companies in France, under the "Talent Passport – Employee of an innovative company" residence permit. Since 2017, it has helped more than 1,200 companies in France secure talent from foreign markets.
Inclusivity + Culture
In 2001, the French government reformed unemployment law with measures included to provide startup-friendly unemployment benefits. This policy allows French residents to receive 60% of their previous salary for up to a maximum of 30k for two full years while launching a startup from a position of unemployment. The goal of this is to reduce barriers and disincentives that prevent unemployed individuals from starting their own businesses. Prior to the reforms individuals would have had their benefits removed if they launched a startup. Crucially, academic research found that this policy added 12,000 jobs and €350 million to the French economy annually and equated to a rate of return for €3.50 for each euro spent by the government.
There have also been efforts to increase the participation of women in the startup sector through the Women’s Entrepreneurship Plan. Launched in 2013, the plan aimed to increase the proportion of women in new business startups to 40%. It is worth noting, however, that ethnicity does not currently feature in any of the national agendas aimed at entrepreneurship and there remains a lack support targeted at entrepreneurs from underrepresented ethnic groups in France.
Regulation
Traditionally seen as a country with high levels of regulation, successive French governments have introduced policies aimed at reducing the regulatory burden for startups. One notable policy is the Zones Franches Urbaines – Territoires Entrepreneur initiative (ZFU-TE). This program is aimed at supporting the regeneration of disadvantaged neighborhoods by offering a favorable regulatory and tax environment for companies that relocate. Companies starting up or creating jobs in disadvantaged neighborhoods of 10,000 or more inhabitants (ZFU-TE areas) benefit from temporary exemptions from taxes on profit. The exemption is total (100%) for the first five years and decreases progressively afterwards, going down to 60% for the sixth year, 40% for the seventh year and 20% for the eighth year of activity in a ZFU-TE. The ZFU-TE initiative covers 100 urban zones across France.
France also has one of the most generous stock option schemes in the world with the BSPCE Scheme which gives them the third highest score in the world behind just 6 other countries according to the latest analysis. The BSPCE scheme works by granting employees the option to purchase shares of the company at a predetermined price. This is often lower than the market value of the shares at the time of granting the option.
Ecosystem + Economic Development
La French Tech Initiative is a government-backed movement aimed at promoting and supporting the French startup ecosystem, both domestically and internationally. Launched in 2013, this initiative has been pivotal in uniting startup entrepreneurs, investors, policymakers, and community builders under a common banner to create favorable conditions for the growth and international success of French startups. La French Tech has also been instrumental in branding and marketing French startups, helping to position France as a hub of technological innovation and entrepreneurship on the global stage. It has helped to create a network of French Tech communities and hubs across France and in various cities around the world, further amplifying the reach and impact of the French startup ecosystem.
Paris is also famous for hosting the world’s largest startup incubator Station F, formerly known as Halle Freyssinet. Housed in the iconic and historically significant building designed by engineer Eugène Freyssinet between 1927 and 1929, the structure is made of pre-stressed concrete and spans 34,000 square meters. The main objective of Station F is to create an entrepreneurial ecosystem under one roof, putting France and Europe at the forefront of the international startup map. As of 2022, Station F has housed 5,015 startups which have collectively raised €1.8 billion in funding.
Science, Technology and Innovation
The French Plan for Open Science is a strategic initiative by the French government to promote open access to scientific research. The overall aim of the plan is to democratize access to scientific research by mandating open access for all publicly funded research. This initiative seeks to foster a culture of data sharing and re-use, which can accelerate scientific discovery and innovation. It also aspires to support innovative publishing models to reduce barriers in disseminating research findings. This resulted in an increase in open access publications from 41% to 56% and encouraged the launch of a Second Plan focused on reaching 100% and making open science a common practice internationally.
Policymaking
Good policymaking is the bedrock of a strong ecosystem and France demonstrates the impact of having political leaders who prioritize the issue, for example, Cédric O who served as Secretary of State for the Digital Economy and was trusted by the startup community to enact positive change.
Organizations such as France Digitale have also played an important role as the leading startup and investor association in France that defends the interests of the startup community. Included in its list of achievements are the launch of La French Tech and French Digitale Day. They have also conducted several ecosystem mapping exercises including reports focused on scaleups and job creation.
The case studies covered in GEN Atlas reveal a comprehensive network of startup support offered in France across the 8 key policy themes. In particular, the government has taken proactive steps to reform and modernize legacy programs so that they are relevant for the startups of today. They have also shown an impressive level of ambition for French startups and citizens alike through the France 2030 plan which aims to position the country as a world leader in research, digital economy and innovation.