Prime Minister focuses on French competitiveness and innovation

Communiqué issued following the Council of Ministers’ meeting (excerpts)

Paris, 6 November 2013

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Initial assessment of the National Pact for Growth, Competitiveness and Employment and the new innovation measures

The Prime Minister made a statement on the initial assessment of the National Pact for Growth, Competitiveness and Employment.

A year ago, on 6 November 2012, the government decided on the 35 measures in the National Pact for Growth, Competitiveness and Employment, after Louis Gallois had presented his report on the competitiveness of the French economy, in which he noted a major loss of competitiveness over the previous 10 years which he described as a “real stalling”.

The anniversary of the launch of the National Pact for Growth, Competitiveness and Employment provides an opportunity for an initial assessment of the decisions taken.

The flagship measure in the competitiveness pact, namely the competitiveness and employment tax credit (CICE), is already having positive effects on employment: in the order of 30,000 jobs in 2013, according to INSEE [National Institute of Statistics and Economic Studies]. The mechanism will gear up in 2014. Next January, the amount of corporation tax reimbursed per company per year will account for 6% of salaries under 2.5 times the minimum wage. This represents an unprecedented easing of the burden of charges on companies, to the tune of €20 billion a year.

The financing of companies has also markedly improved, particularly through the creation of the Public Investment Bank (Bpifrance), which supported nearly 60,000 companies in the first nine months of 2013. More than €1.5 billion has been injected in the past year to limit companies’ cash-flow problems. New, simplified, strengthened export support measures have been rolled out. Tailored export support has been established, from which 250 Small and Medium-sized Enterprises (SMEs) or mid-cap companies have benefited in 2013, with the ultimate target being 1,000 SMEs and mid-caps. Apprenticeships are being reformed to make them more effective.

The important project of simplifying companies’ activities has also made progress. 130 measures to make life more straightforward for companies were decided on in July 2013, and the necessary texts are on the way to being adopted. Among other things, they will enable company registration fees to be reduced and accountancy requirements to be eased. The commitment to stability in the R&D tax credit – an important tool for innovation and for France’s international attractiveness – has been honoured.

This is also the thrust of the measures decided on for boosting the upgrading of our economy. High-speed broadband is being rolled out, with a public-private investment of €20 billion over 10 years. Industrial sectors are organizing themselves to team up more effectively and each increase their own competitiveness. The 34-plan New Face of Industry in France policy, which will enable us to prepare our companies for the challenges of 2020 and spur them into action on specific operational projects, has been launched. Innovation is enjoying renewed support, with a strengthening of the Young Innovative Companies mechanism, better access for innovative SMEs to public procurement contracts and the launch in the coming weeks of an innovation contest, endowed with €300 million, on the “seven innovation goals” identified in Anne Lauvergeon’s report – goals for which France has particular strengths.

All the measures taken in the past year are enabling us to improve the competitiveness of French companies, in terms of both controlling costs and non-price competitiveness. They demonstrate the government’s determination to work for growth and employment.

The provision is today being built on with an innovation plan presented by the Minister Delegate for Small and Medium-sized Enterprises, Innovation and the Digital Economy, attached to the Minister for Production Recovery, and by the Minister of Higher Education and Research.

Innovation is at the heart of the strategy to upgrade the economy.

In this regard, France has many strengths, particularly its excellent publicly-funded research, but it needs a whole new approach to conceiving and practising innovation.

The first special priority is innovation by all – i.e. a call for diversity of skills. The second priority consists in “opening up” innovation and stimulating encounters – between publicly-funded research and the economic sector, between large companies and SMEs, between entrepreneurs and financiers – while supporting ecosystem dynamics. The plan’s third priority is to use all the available levers to help start-ups, SMEs and mid-caps in their innovation strategies; in particular, a national innovation fund endowed with €240 million will be created to that end. The fourth priority concerns the public contribution to innovation. The state must assess and improve the results of its innovation policies.

This provision builds on the national pact for growth.

It’s now up to the stakeholders to make use of these tools provided to them. (…)./.

Published on 02/11/2016

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