With Britain tormented by its decision to leave the European Union, France waits, anticipating Brexit’s fall-out whilst also fantasising over a society full of unicorns.
Emmanuel Macron’s pledge in June 2017 to make France a ‘start-up nation’ follows the growing trend of startup creation around Europe, and the appetite to produce startup companies valued at over $1billion, also known as unicorns.
His speech has given increased impetus to the entrepreneurial members of French society
His speech has given increased impetus to the entrepreneurial members of French society who are battling other European cities, such as Berlin, Stockholm, and Frankfurt, to attract the tech start-ups unnerved by Britain’s political and economic instability. A year and a half on, with Macron’s approval ratings resembling those seen during the deeply unpopular tenure of Francois Hollande, it appears the dream of recreating a Silicon Valley in France hangs in the balance, and it’s not hard to see why.
Popularised by Senor and Singer, the term ‘start-up nation’ is widely applied to Israel. As various organisations and economic entities have identified, it is a state which raises 30 times more than Europe in venture capital per capita, contains more start-ups per capita than anywhere else in the world, and spends almost double that of France on Research & Development as a percentage as of GDP (4.3% v. 2.2, 2015). Trying to emulate the start-up success of a country as entrepreneurially accomplished and innovative as Israel was always going to be a considerable feat.
However, since Macron’s mention of the start-up nation in 2017, France has seen a wealth of investment from international companies looking to relocate from the Brexit fallout. In 2017, French-based companies doubled the amount of VC investment received from the previous year, whilst the first part of 2018 has already usurped 2017’s total figure. New ventures, such as Paris’ Station F, which boasts the title of the biggest start-up building in the world and houses companies such as Facebook, Microsoft and Intel, indicates there is promise of a new entrepreneurial era for the Fifth Republic. Macron’s commitment of €1.5 billion to Artificial Intelligence funding by 2022 will only further this progress.
Macron’s opinion poll ratings are at an all-time low
With such reason to be optimistic for French businesses, it is perhaps difficult to understand that Macron’s opinion poll ratings are at an all-time low, with the Rassemblement National overtaking the President’s party, La République En Marche, in the voter intention polls for the May 2019 European elections for the first time. The impassioned protests of the gilets jaunes across France has only further highlighted this dissatisfaction. There is an obvious divide between the business world and the rest in France, with many French voters left feeling excluded by Macron’s urban focus, naming him ‘Macron méprisant (despising) de la République’ instead of his title as ‘Président de la République.’ And yet, despite this quasi-obsession with business creation, comparatively to her competitors France itself is still off the pace.
Countries such as Sweden and Estonia appear to be bigger rivals for the Israeli start-up nation crown. Sweden, for example, has seen its fair share of unicorn production recently, with Spotify and gaming company King amongst its most successful startups. With low corporation tax and generous welfare, Swedish innovation has grown from strength to strength, recently being chosen by the UN as a hub for tech start-up creation. Estonia boasts ever-increasing investment in its start-ups, and places third highest in concentration of start-ups for Europe. Capital city Tallinn has, for example, been lauded as an evolving tech-savvy start-up city, with TransferWise and Skype both having originating from the Baltic country.
The fierce level of competition for start-up success in Europe masks the even more daunting challenge of become a world-leading start-up country for France. The US has almost 50% of all unicorns, with Silicon Valley alone taking over a third of global start-up funding, cementing its status as a utopia for start-up creators. Meanwhile China’s rapid start-up growth shows itself to be the next largest competitor for unicorn pasture, with roughly a third of all unicorns, such as drone-maker DJI, originating from the East Asian republic.
Macron appears to have overpromised and, as of yet, underperformed.
With such an emphasis on replicating the success of start-up havens across the world, Macron appears to have overpromised and, as of yet, underperformed. Continued plans for increased research and development funds, more programs for start-up growth, and business-friendly policy would suggest the future is bright for the French startup scene. Yet with the gilets jaunes‘ protests tarnishing Macron’s reputation and diverting his policy focus elsewhere, the US-Chinese monopoly on unicorns looks unlikely to be tested anytime soon.