In the first of a new series, we look at the business opportunities for entrepreneurs in the capital of the UK’s closest European neighbour
Paris is fast emerging as the tech capital of Europe, says Denis Tersen, CEO of the Paris Region Economic Development Agency (PREDA). According to the organisation, in 2004 Paris recorded the highest number of patent applications (3,300) in Europe, while in 2007 public and private research and development (R&D) spending was also the highest, totalling €15.5bn (private research accounted for €10.3bn).
“We are the most science-oriented region in Europe. We’re very strong in IT, life sciences, mathematics and engineering,” says Tersen. “If you are a technological company, usually your market is global. What you can find in Paris are resources for R&D.”
While large tech companies such as Intel have set up research centres in the city, Tersen insists that the generous R&D tax credits system offered by the French government makes it an attractive environment for smaller companies, too. “The government doesn’t discriminate between French companies and businesses of other origins. Research tax credits are available for every company,” he says.
However, with its close proximity to the UK and strong consumer market, he believes Paris is worth considering for any British entrepreneur looking to expand their reach in Europe. According to PREDA, Paris is Europe’s most densely populated region, while its economy withstood the global financial crisis better than France as a whole, which in turn fared better than other EU member states, including Germany and the UK.
“Even if you are less technologically oriented, you will have access to a big, vibrant and innovative market of 11 million inhabitants, with trend-setters and consumers ready to test new products,” Tersen says.
Home to the famous INSEAD business school, Paris saw 77,500 new businesses created in 2008, bringing the total number of companies to 692,156, of which 99% are small or medium-sized.
Although the city centre is naturally more expensive, Tersen says there are far cheaper districts surrounding the area, with strong transport links into the city, to the rest of France and beyond. “Charles de Gaulle is a big hub for Continental Europe and the rest of the world; you also have the high-speed train network (TGV),” he says.
In 2005, the French government launched its ‘competitiveness cluster strategy’, with the aim of bringing together business, research centres and training bodies to encourage the emergence of collaborative, and crucially, innovative projects, in the face of increased global competition. There are currently nine clusters covering different business sectors: Advancity, ASTech, Cap Digital, Cosmetic Valley, Elastopole, Finance Innovation, Medicen, Mov’eo, and System@tic.
“These clusters strengthen the Paris Region’s competitive position on the world stage, notably by encouraging research and innovation,” says PREDA.
So far, almost 700 projects have been financed, with a total investment of €2,260m including €830m of public funding.
“It’s very important to be part of the clusters – part of the networks. First of all, you can benefit from a subsidy if you are a project in the field of R&D, but you can also enjoy the proximity with large companies and not just competitors but potential partners,” adds Tersen.
“Despite the fact that Gallic people are supposed to be very individualistic, when we do business we work in more formal networks than in the UK. The UK is more deregulated and a more flexible market. In France you have to be part of the networks, you have to find good neighbours to be at ease in your environment.”
While Tersen insists that being able to speak French is not a prerequisite of doing business in the city, as most professionals will be able to speak English, he jokes that this would be “a bit of a shun of the French way of living”. It’s a fair point, and one which several UK entrepreneurs who have expanded into Paris agree with. Making an effort to speak the language and respect the French culture will only help your business get ahead.
PREDA provides information, facilities and advice to companies entering the French market, in areas such as finding the right network, professional services, premises, human resources and help with tax issues. For more information, visit www.paris-region.com