France entrepreneurs hit by obstacles

Oct 18 2012, 12:23 IST
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France entrepreneurs hit by obstacles. (Reuters) France entrepreneurs hit by obstacles. (Reuters)
SummaryHalf the French think competition brings out the worst in people rather than fuelling new ideas: study

It took some nerve for 10 engineers in a Paris basement to take on electronics giant Fujitsu for a $20 million contract to supply European planemaker Airbus with a new kind of data tag for its aircraft parts.

But Frenchman Bruno Lo-Re, who was 38 at the time, was sure his team had a headstart against the Tokyo-based company of 170,000 employees: he had already persuaded the French airforce to let him try them out on its fighter jets.

I knew our tags were best but it was having tested them on Rafales that swung it, said Lo-Re, whose start-up won the 2010 bid and instantly became the world's top supplier of RFID radio-frequency identification tags for aircraft, resistant to high-altitude gamma rays, extreme cold and roasting heat.

It is a success story that stands out in a country that gave the world the word entrepreneur but struggles with barriers to financing that mean only the most determined start-ups will break through.

France has a fleet of established multinationals, from insurance giant Axa to oil group Total, many of which were founded a century or more ago and built up over decades with strong support from the state.

But while U.S. newcomers like Google and Facebook have revolutionised information-sharing, Britain's EasyJet has shaken up air travel and young German firms are pioneers in renewable energy, few French start-ups are making inroads.

The lag is holding back job creation just as mass lay-offs in old industries like car-making, hit by low demand in crisis-hit Europe, drive unemployment above 10 percent.

Business leaders fear that 10 billion euros worth of tax hikes imposed on companies in the 2013 budget of Socialist President Francois Hollande will only make things worse.

We have a culture where everybody wants a safe job with a big company. Nobody wants to be a Mark Zuckerberg and take risks, Guillaume Cairou, head of a French entrepreneurs' club, said of Facebook's 28-year-old founder.


The World Values Survey Association, a network of social scientists, found in a 2000 poll that nearly half the French think competition brings out the worst in people rather than fuelling new ideas.

Entrepreneurs suffer from a culture where bankruptcy is treated as the ultimate disgrace, unlike in the United States or Britain where an early business failure can be seen as a useful learning experience to bounce back from.

Regulations that kick in as firms grow, such as a legal requirement to create a

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