France Attractiveness Scoreboard...largest startup campus, Station F, opened last summer in Paris, while the French tech ecosystem is now the focus of major international recognition

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FranceAttractiveness

Scoreboard2018

EDITION

France Attractiveness

Scoreboard

2018 edition

Contents

Outcome indicators 12

1.1 Foreign direct investment 141.2 Physical job-creating foreign investment 20

1.3 Contribution of foreign subsidiaries 261.4 Foreign skills 28

Overview 06

Introduction 10

Chapter01

4

Attractiveness criteria 30

2.1 Market size and strength 322.2 Education and human capital 38

2.3 Research and innovation 442.4 Infrastructures 52

2.5 Administrative and regulatory 60 environment

2.6 Financial environment 682.7 Costs and taxation 74

2.8 Quality of life 842.9 Green growth 92

2.10 The perceptions of foreign investors 98

Chapter02

5

FRANCE ATTRACTIVENESS SCOREBOARD. CONTENTS

PASCAL CAGNI Chairman of Business France, Ambassador for International

Investment

Greatly improvingcomparative

attractiveness

6

here does France stand, as an economy and attractive business destination,

compared with its main rivals? What are its strengths and weaknesses? And how are these changing? The answers to these questions can be found in Business France’s Attractiveness Scoreboard, the aim of which is to compare France’s performances with those of 13 other major OECD countries.

In light of these results, the challenge surrounding the French economy’s attractiveness, is two-fold: firstly, we must help maintain Europe’s ranking when faced with competition from the world’s other developed regions; and secondly, France must serve as an example of economic greatness and political stability within the European Union and the euro zone.

France’s strengths and business drive are logically reflected in an increase of our attractiveness. France is a country that attracts talent and investors, a country focused on excellence.Against a backdrop of rising populism, protectionism and declining global FDI flows, France has emerged as a leading destination for foreign capital and talent. In 2017, Business France recorded a strong increase in incoming FDI inflows (up 39%) amounting to €44.2 billion, as well as job-creating foreign investment (up 16%). France continues to be Europe’s leading recipient of industrial investments. Moreover, the excellence and reputation

of our higher education system, not to mention the draw of the French language, enable us to attract foreign students. With more than 240,000 international students in 2016, France remains the fourth most popular destination for students after the United States, the United Kingdom and Australia.

France’s economic image is improving, and so is its perceived attractiveness, with the measures taken in recent years by the authorities to enhance the country’s attractiveness starting to bring positive results. Foreign investor satisfaction has increased significantly, whether measured by AmCham-Bain, EY or Kantar Public. Surveys analyzing France’s attractiveness cite the size of the internal market, the quality of the country’s communication and transport infrastructures, workforce skills and training, innovation and R&D, and overall productivity among the country’s strengths.

Comparative attractiveness is growing sharply. France is now the second most attractive European country after Germany, and ahead of the United Kingdom. German, Indian and Chinese companies all consider France the leading destination in Europe for foreign investment. With regard to UK investment, more than one-third of British companies perceive France as Europe’s most attractive investment destination, up seven percentage points.

France’s structural strengths, as highlighted in the latest edition of the Attractiveness Scoreboard, along with the country’s entrepreneurial and creative momentum, are still too often overlooked by the world’s largest economic key players. Net enterprise creation is well above the European average, while France has become a prime location for launching startups, thanks to simplified business formation procedures and a dense nationwide network of incubators and accelerators. What’s more, the world’s largest startup campus, Station F, opened last summer in Paris, while the French tech ecosystem is now the focus of major international recognition.

Today, our country’s strengths, as confirmed by the positive results it has confirmed for foreign direct investment and entrepreneurial drive, are looked upon more favorably by foreign investors and opinion makers. We must continue to change our country’s perception abroad for the better, and to tirelessly promote the strengths of our economy.

This is what Business France and I, in my role as Ambassador for International Investment, are committed to doing, supported by the excellent French diplomatic network and many French people abroad who can use this report to challenge those received ideas and help to further transform the image of France.

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FRANCE ATTRACTIVENESS SCOREBOARD. OVERVIEW

gainst a background of much greater mobility of production factors, particularly capital, the attractiveness of countries and economies is becoming increasingly

important. Respective governments are focusing their efforts on creating an environment conducive to maintaining or setting up businesses and attracting foreign talent.Country attractiveness is a relative concept and companies are finding more and more ways to expand abroad. Some companies favor the quality of transport and communication infrastructure, or an environment more conducive to technological innovation (qualified personnel, tax benefits, innovation activities, etc.); while some are more interested in the skilled labor force that is available, strong domestic demand and high market potential; and others prefer lower production costs or access to specific natural resources.There are no absolute criteria for defining a threshold above which a country could be considered to be attractive, which is why Business France has been conducting a comparative analysis of the attractiveness of the French economy for the last nine years by comparing the performances of France with those of 13 other major OECD countries across 123 indicators.Business France teams have focused on key investment attractiveness criteria and have presented a clear overview of core data, shining light through French windows onto an obscure mass of statistics, providing the keys to understanding the advances and the impact of reforms on companies.Three main lessons have emerged from the ninth edition of this publication.1. France continues to enjoy and consolidate a number of outstanding structural advantages. French infrastructure remains unrivalled, underpinned by high levels of state investment that in 2016 exceeded those in the United Kingdom and Germany. Examples include some of the cheapest and lowest-carbon electricity in Europe, and the prowess of Paris-Charles de Gaulle airport, ranked first for cargo and second by passenger numbers on the continent.2. The financial ecosystem is improving thanks

to an increasingly modern administrative and regulatory environment. According to the United Nations E-Government Survey 2018, France is ranked ninth in the world for e-government (fifth in Europe), and fourth in our sample. France performs particularly well in terms of the quality and accessibility of online services, for which it is ranked fourth in the world and second among our sample.3. France is a nation that offers great access to corporate finance. In the first three quarters of 2018, France was ranked third in the sample in terms of amounts raised (United Kingdom €5.1 billion, Germany €3.1 billion, France €2.8 billion), and second for the number of transactions (United Kingdom 588, France 431, Sweden 246, Germany 216). Furthermore, cash lending to SMEs and micro-enterprises is rising, while corporate lending in France has on the whole remained buoyant. According to the Banque de France’s quarterly corporate bank lending survey for the second quarter of 2018, bank lending to SMEs and micro-enterprises has remained strong (with 87% of SMEs and more than 73% of micro-enterprises obtaining the amount they sought), which is the highest level recorded since the end of 2014.However, a number of observers insist upon the efforts required to improve labor costs and the tax burden on businesses. The reforms carried out over the past year – including an overhaul of French employment laws, enacted by decree on September 22, 2017, changes to taxation, as part of the French Government Budget Act 2018, and the PACTE action plan for business growth and transformation to help SMEs and micro-enterprises – point to the government’s dynamic approach. These reforms promise, in the medium term, to help transform France’s business image and enhance its investment attractiveness. The latest opinion polls suggest that this aim has already been achieved, although you may have to wait for next year’s Scoreboard to check the results.The data from the 2018 France Attractiveness Scoreboard proves that we are on the right track, with France having made progress on no fewer than 22 of the report’s key indicators.I do hope you enjoy reading this year’s edition.

8

CHRISTOPHE LECOURTIER CEO of Business France

The reforms carried out over the past year point to the government’s dynamic approach. These reforms promise, in the medium term, to help transform France’s business image and enhance its investment attractiveness.

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FRANCE ATTRACTIVENESS SCOREBOARD. OVERVIEW

IntroductionEconomic attractiveness is defined as the capacity to attract new business

and mobile factors of production – capital and skilled labor – to a specific location,

whose attractiveness is therefore closely related to its competitiveness.

However large a country or region may be, a failure to be competitive may lead

inexorably to population decline, disinvestment and an exodus of businesses.

10

In just a few years, this concept of attractiveness has become a key factor in the economic performances of different countries, and their full participation in the global economy. The challenge is to attract job-creating foreign investments given the major role they play in industrialization and regional economic development.Foreign direct investment is seen to drive economic growth through technology and knowledge transfers that underpin competitiveness and boost innovation in the host country. Attracting foreign talent (international students and personnel) is a way of tapping into global talent pools, enhancing teaching skills, and fostering the development of ecosystems for research and manufacturing in numerous countries.This is why many governments around the world have policies to attract foreign talent and investment.Economic attractiveness is the reflection of a wide range of macroeconomic criteria. By compiling a vast array of economic data without resorting to data-weighted aggregate indicators, we can provide objective analysis of France’s attractiveness as an investment location. Key indicators include market size, human capital, research and innovation, infrastructure, administrative and financial environments, investment and labor costs (including taxation, which plays a significant role), as well as quality of life.Each subject is discussed with reference to specific indicators, and comparisons are made between

France and 13 OECD countries: Austria, Belgium, Finland, Germany, Ireland, Italy, Japan, the Netherlands, Poland, Spain, Sweden, the United Kingdom and the United States.These countries play a major role in international investment and have similar skill sets and/or substantial economic relations with France. Poland was chosen as a major economy from Central and Eastern Europe. The relative performances of these 14 countries are also compared with the EU average, wherever possible, while for some key indicators a comparison is made with other countries from around the world. This ninth edition of the France Attractiveness Scoreboard confirms the openness of France’s economy to the world: a nation at the heart of global trade, one of the three most attractive European economies in the eyes of job-creating foreign investors, Europe’s leading recipient of foreign investment in industry for the last 15 years, and the fourth most popular destination in the world for international students.The France Attractiveness Scoreboard highlights that France can count on a number of key strengths, including its large domestic market and central location within Europe, its vibrant demographics, excellent tertiary education system, high labor productivity, excellent infrastructure, a dynamic entrepreneurial environ-ment, and superb quality of life.It also confirms that employment law and taxation are areas in which France must regain ground in today’s competitive environment.

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FRANCE ATTRACTIVENESS SCOREBOARD. INTRODUCTION

Chapter01

Outcome indicators

12

Foreign direct investment

14

Physical job-creating foreign investment

20

Contribution of foreign subsidiaries

26

Foreign skills 28

13

FRANCE ATTRACTIVENESS SCOREBOARD. OUTCOME INDICATORS

1.1 Foreign direct investment

Global foreign direct investment (FDI) flows declined by 23% in 2017 to US$1,430 billion.While FDI inflows to developed countries were down by 59%, they remained for the third year in succession the leading recipients of global FDI inflows.Foreign investments in France increased significantly in 2017, more so than in France’s leading commercial partners, due in particular to the thriving nature of investments from the United States and the United Kingdom. France remains the leading country in Europe for attracting the largest volume of industrial investments.

Data from the United Nations Conference on Trade and Development (UNCTAD) show that global foreign direct investment (FDI) flows grew from US$1,867 billion in 2016 to US$1,430 billion in 2017.Global FDI flows were down 23% and were mainly orientated at developed economies (US$712 million, or 59% of global flows). While the European Union enjoyed US$300 billion of FDI inflows in 2017, the United States remained the leading recipient of foreign investment, despite declining from US$457 billion in 2016 to only US$275 billion.FDI inflows to developed countries contracted sharply in 2017, from US$1,133 billion to US$712 billion, due notably to the fall in FDI inflows to the United Kingdom. In the current context of great uncertainty surrounding Brexit, the balance of inflows over the year was virtually zero, while it was nearly US$200 million in 2016.Inflows in emerging economies remained stable in 2017 at US$670 billion. While China’s balance stabilized at around US$135 billion, it became the second leading recipient of FDI in the world, replacing the United Kingdom. FDI inflows in Brazil were also at a high level (US$62 billion), while India saw a reduction in FDI inflows from US$45 billion in 2016 to US$39 billion in 2017.

FDI inflows in France were US$49 billion in 2017, a record high in the last 10 years. France enjoyed the seventh largest volume of FDI inflows in 2017 (while it was ranked 17th in 2016), and the second largest in Europe, just after the Netherlands, and ahead of Austria and Germany.

The world’s stock of FDI amounted to US$31,500 billion in 2017, up 14% from 2016. It includes US$20,000 billion in developed countries, including US$9,000 billion in the European Union and US$7,800 billion in the United States. The stock of FDI in emerging countries is worth around US$10,000 billion, up 12% from 2016. China and Hong Kong together host nearly US$3.5 billion of FDI inflows.

Inward FDI stock in France amounted to US$875 billion in 2017. As such, it has increased at a higher rate than in its main partner countries (+24% in France, versus +19% in the United States, +18% in Germany, +6% in the United Kingdom) and nearly twice as quickly as the average for European Union countries. France hosts the world’s 11th highest FDI stock, a stable position since 2013, and has the fifth highest FDI stock in the European Union.

The countries with the highest FDI outflows in 2017 were the United States (US$342 billion, versus US$280 billion in 2016), Japan (US$160 billion, versus US$145 billion in 2016), and China (US$124 billion, versus US$196 billion in 2016, a fall due to the implementation of restrictive policies following large capital outflows in 2015).

In terms of stock, the United States (US$7,800 billion), Hong Kong (US$1,800 billion) and Germany (US$1,600 billion) were the main source of FDI outflows in the world.

FDI outflows in France were worth US$58 billion in 2017, versus US$63 billion in 2016. French FDI stock held abroad was worth US$1,450 billion in 2017, up 13% from 2016. France was the ninth largest source of FDI in the world in 2017, in terms of stocks.

14

Source: UNCTAD, 2018


Fig 2. FOREIGN DIRECT INVESTMENT INFLOWS (2017)LEADING 20 RECIPIENTS - CURRENT US$ BILLION

Fig 4. OUTWARD FDI FLOWS (2017) LEADING 20 RECIPIENTS - CURRENT US$ BILLION

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Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

20%18%16%14%12%10%8%6%4%2%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

28%

24%

20%

16%

12%

8%

4%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Ita

ly

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

40%

35%

30%

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d


chimie


agroalimentaire

production


70

60

50

40

30

20

10

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Austr

ia

Polan

d

Irelan

d

45

40

35

30

25

20

15

10

5

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

7,799

70

60

50

40

30

20

10

0


Fig 3. INWARD FDI STOCK (2017) LEADING 20 RECIPIENTS - CURRENT US$ BILLION

2,000

1,600

1,200

800

400

0

1999

1998

1995

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1996 1997


Chap 1

50

40

30

20

10

0

-10

-20





2008 2009 2010 2011 2012 2013 2014 2016 20172015

Unite

d Sta

tes

Hong

Kong

China

Irelan

d

Spain

Indon

esia

Singa

pore

Braz

ilNe

ther

lands

Mex

ico

Austr

alia

Italy

Israe

lSo

uth K

orea

India

Germ

any

Switz

erlan

d

Russ

ia

Fran

ce

Cana

da


200

160

120

80

40

0

275

Unite

d King

dom

Hong

Kong

China

Irelan

d

Spain

Belgi

um

Singa

pore

Braz

il

Neth

erlan

ds

Mex

ico

Austr

alia

Italy

Italy

Austr

alia

Braz

ilInd

iaSw

eden

Germ

any

Switz

erlan

d

Russ

ia

Fran

ce

Cana

da


3,000

2,500

2,000

1,500

1,000

500

0

Unite

d Sta

tes

7,807Un

ited K

ingdo

mHo

ng Ko

ng

China

Japan

Irelan

d

Thail

and

Taiw

an

Unite

dAr

ab Em

irate

s

Spain

Russ

iaSo

uth K

orea

Belgi

um

Singa

pore

Swed

enNe

ther

lands

Germ

any

Luxe

mbou

rg

Fran

ce

Cana

da


350

300

250

200

150

100

50

0

Unite

d Sta

tes

600

500

400

300

200

100

0

48%

46%

44%

42%

40%

38%

36%

Dec.

2002

Dec.

2003

Dec.

2004

Dec.

2005

Dec.

2006

Dec.

2007

Dec.

2008

Dec.

2009

Dec.

2010

Dec.

2011

Dec.

2012

Dec.

2013

Dec.

2014

Dec.

2015

Dec.

2016

Dec.

2017


3,000

2,500

2,000

1,500

1,000

500

0

Unite

d King

dom

Hong

Kong

Switz

erlan

d

Japan

Irelan

d

Spain

Russ

iaSo

uth K

orea

Belgi

um

Singa

pore

Swed

en

Neth

erlan

ds

Germ

any

Fran

ce

Cana

daCh

ina

Unite

d Sta

tes


1,000,000900,000800,000700,000600,000500,000400,000300,000200,000100,000

0

Unite

d King

dom

Austr

alia

Switz

erlan

dDe

nmar

k

Japan

Cana

da

Irelan

d

Spain

Swed

enHu

ngar

yFin

land

Portu

gal

Neth

erlan

dsAu

stria

Belgi

um

Polan

d

New

Zeala

nd

Germ

any

Fran

ce

Unite

d Sta

tes

Flux de migration

90,00080,00070,00060,00050,00040,00030,00020,00010,000

0

Cana

da

Unite

d King

dom

Mex

icoItaly

Switz

erlan

d

Denm

ark

Japan

Norw

ay

Irelan

d

Spain

Swed

en

Finlan

d

Portu

gal

Neth

erlan

ds

Austr

iaBe

lgium

New

Zeala

nd

Germ

any

Fran

ce

Austr

alia

Unite

d Sta

tes


50454035302520151050

Unite

d King

dom

Japan

Irelan

d

Spain

Swed

en

OECD

Finlan

d

EU-2

2

Neth

erlan

ds

Austr

ia

Belgi

um

Polan

d

Norw

ay

Germ

any

Fran

ce

Unite

d Sta

tes


35

30

25

20

15

10

5

0

Unite

d King

dom

Japan

Irelan

d

Spain

Swed

en

Finlan

d

Neth

erlan

ds

Austr

iaBe

lgium

Polan

d

Norw

ay

Germ

any

Fran

ce

Unite

d Sta

tes

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

dSw

eden

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

20%18%16%14%12%10%8%6%4%2%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

28%

24%

20%

16%

12%

8%

4%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Ita

ly

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

40%

35%

30%

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d


chimie


agroalimentaire

production


70

60

50

40

30

20

10

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Austr

ia

Polan

d

Irelan

d

45

40

35

30

25

20

15

10

5

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

7,799

70

60

50

40

30

20

10

0


Fig 5. OUTWARD FDI STOCK (2017) LEADING 20 RECIPIENTS - CURRENT US$ BILLION

2,000

1,600

1,200

800

400

0

1999

1998

1995

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1996 1997


Chap 1

50

40

30

20

10

0

-10

-20





2008 2009 2010 2011 2012 2013 2014 2016 20172015

Unite

d Sta

tes

Hong

Kong

China

Irelan

d

Spain

Indon

esia

Singa

pore

Braz

ilNe

ther

lands

Mex

ico

Austr

alia

Italy

Israe

lSo

uth K

orea

India

Germ

any

Switz

erlan

d

Russ

ia

Fran

ce

Cana

da


200

160

120

80

40

0

275

Unite

d King

dom

Hong

Kong

China

Irelan

d

Spain

Belgi

um

Singa

pore

Braz

il

Neth

erlan

ds

Mex

ico

Austr

alia

Italy

Italy

Austr

alia

Braz

ilInd

iaSw

eden

Germ

any

Switz

erlan

d

Russ

ia

Fran

ce

Cana

da


3,000

2,500

2,000

1,500

1,000

500

0

Unite

d Sta

tes

7,807

Unite

d King

dom

Hong

Kong

China

Japan

Irelan

d

Thail

and

Taiw

an

Unite

dAr

ab Em

irate

s

Spain

Russ

iaSo

uth K

orea

Belgi

um

Singa

pore

Swed

enNe

ther

lands

Germ

any

Luxe

mbou

rg

Fran

ce

Cana

da


350

300

250

200

150

100

50

0

Unite

d Sta

tes

600

500

400

300

200

100

0

48%

46%

44%

42%

40%

38%

36%

Dec.

2002

Dec.

2003

Dec.

2004

Dec.

2005

Dec.

2006

Dec.

2007

Dec.

2008

Dec.

2009

Dec.

2010

Dec.

2011

Dec.

2012

Dec.

2013

Dec.

2014

Dec.

2015

Dec.

2016

Dec.

2017


3,000

2,500

2,000

1,500

1,000

500

0

Unite

d King

dom

Hong

Kong

Switz

erlan

d

Japan

Irelan

d

Spain

Russ

iaSo

uth K

orea

Belgi

um

Singa

pore

Swed

en

Neth

erlan

ds

Germ

any

Fran

ce

Cana

daCh

ina

Unite

d Sta

tes


1,000,000900,000800,000700,000600,000500,000400,000300,000200,000100,000

0

Unite

d King

dom

Austr

alia

Switz

erlan

dDe

nmar

k

Japan

Cana

da

Irelan

d

Spain

Swed

enHu

ngar

yFin

land

Portu

gal

Neth

erlan

dsAu

stria

Belgi

um

Polan

d

New

Zeala

nd

Germ

any

Fran

ce

Unite

d Sta

tes

Flux de migration

90,00080,00070,00060,00050,00040,00030,00020,00010,000

0

Cana

da

Unite

d King

dom

Mex

icoItaly

Switz

erlan

d

Denm

ark

Japan

Norw

ay

Irelan

d

Spain

Swed

en

Finlan

d

Portu

gal

Neth

erlan

ds

Austr

iaBe

lgium

New

Zeala

nd

Germ

any

Fran

ce

Austr

alia

Unite

d Sta

tes


50454035302520151050

Unite

d King

dom

Japan

Irelan

d

Spain

Swed

en

OECD

Finlan

d

EU-2

2

Neth

erlan

ds

Austr

ia

Belgi

um

Polan

d

Norw

ay

Germ

any

Fran

ce

Unite

d Sta

tes


35

30

25

20

15

10

5

0

Unite

d King

dom

Japan

Irelan

d

Spain

Swed

en

Finlan

d

Neth

erlan

ds

Austr

iaBe

lgium

Polan

d

Norw

ay

Germ

any

Fran

ce

Unite

d Sta

tes

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

dSw

eden

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

20%18%16%14%12%10%8%6%4%2%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

28%

24%

20%

16%

12%

8%

4%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Ita

ly

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

40%

35%

30%

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d


chimie


agroalimentaire

production


70

60

50

40

30

20

10

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Austr

ia

Polan

d

Irelan

d

45

40

35

30

25

20

15

10

5

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

7,799

70

60

50

40

30

20

10

0


Fig 1. FOREIGN DIRECT INVESTMENT INFLOWS 1995-2017 - CURRENT US$ BILLION

Developed countries Emerging economies Transition economies

2,000

1,600

1,200

800

400

0

1999

1998

1995

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1996 1997


Chap 1

50

40

30

20

10

0

-10

-20





2008 2009 2010 2011 2012 2013 2014 2016 20172015

Unite

d Sta

tes

Hong

Kong

China

Irelan

d

Spain

Indon

esia

Singa

pore

Braz

ilNe

ther

lands

Mex

ico

Austr

alia

Italy

Israe

lSo

uth K

orea

India

Germ

any

Switz

erlan

d

Russ

ia

Fran

ce

Cana

da


200

160

120

80

40

0

275

Unite

d King

dom

Hong

Kong

China

Irelan

d

Spain

Belgi

um

Singa

pore

Braz

il

Neth

erlan

ds

Mex

ico

Austr

alia

Italy

Italy

Austr

alia

Braz

ilInd

iaSw

eden

Germ

any

Switz

erlan

d

Russ

ia

Fran

ce

Cana

da


3,000

2,500

2,000

1,500

1,000

500

0

Unite

d Sta

tes

7,807

Unite

d King

dom

Hong

Kong

China

Japan

Irelan

d

Thail

and

Taiw

an

Unite

dAr

ab Em

irate

s

Spain

Russ

iaSo

uth K

orea

Belgi

um

Singa

pore

Swed

enNe

ther

lands

Germ

any

Luxe

mbou

rg

Fran

ce

Cana

da


350

300

250

200

150

100

50

0

Unite

d Sta

tes

600

500

400

300

200

100

0

48%

46%

44%

42%

40%

38%

36%

Dec.

2002

Dec.

2003

Dec.

2004

Dec.

2005

Dec.

2006

Dec.

2007

Dec.

2008

Dec.

2009

Dec.

2010

Dec.

2011

Dec.

2012

Dec.

2013

Dec.

2014

Dec.

2015

Dec.

2016

Dec.

2017


3,000

2,500

2,000

1,500

1,000

500

0

Unite

d King

dom

Hong

Kong

Switz

erlan

d

Japan

Irelan

d

Spain

Russ

iaSo

uth K

orea

Belgi

um

Singa

pore

Swed

en

Neth

erlan

ds

Germ

any

Fran

ce

Cana

daCh

ina

Unite

d Sta

tes


1,000,000900,000800,000700,000600,000500,000400,000300,000200,000100,000

0

Unite

d King

dom

Austr

alia

Switz

erlan

dDe

nmar

k

Japan

Cana

da

Irelan

d

Spain

Swed

enHu

ngar

yFin

land

Portu

gal

Neth

erlan

dsAu

stria

Belgi

um

Polan

d

New

Zeala

nd

Germ

any

Fran

ce

Unite

d Sta

tes

Flux de migration

90,00080,00070,00060,00050,00040,00030,00020,00010,000

0

Cana

da

Unite

d King

dom

Mex

icoItaly

Switz

erlan

d

Denm

ark

Japan

Norw

ay

Irelan

d

Spain

Swed

en

Finlan

d

Portu

gal

Neth

erlan

ds

Austr

iaBe

lgium

New

Zeala

nd

Germ

any

Fran

ce

Austr

alia

Unite

d Sta

tes


50454035302520151050

Unite

d King

dom

Japan

Irelan

d

Spain

Swed

en

OECD

Finlan

d

EU-2

2

Neth

erlan

ds

Austr

ia

Belgi

um

Polan

d

Norw

ay

Germ

any

Fran

ce

Unite

d Sta

tes


35

30

25

20

15

10

5

0

Unite

d King

dom

Japan

Irelan

d

Spain

Swed

en

Finlan

d

Neth

erlan

ds

Austr

iaBe

lgium

Polan

d

Norw

ay

Germ

any

Fran

ce

Unite

d Sta

tes

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

dSw

eden

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

20%18%16%14%12%10%8%6%4%2%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

28%

24%

20%

16%

12%

8%

4%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Ita

ly

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

40%

35%

30%

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d


chimie


agroalimentaire

production


70

60

50

40

30

20

10

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Austr

ia

Polan

d

Irelan

d

45

40

35

30

25

20

15

10

5

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

7,799

70

60

50

40

30

20

10

0

15


* Updated data - Source: Banque de France, 2018

Fig 6. FDI INFLOWS TO FRANCE - € BILLION

Share capital, including real estate Reinvested earnings Intra-group loans and commercial loans Total

2,000

1,600

1,200

800

400

0

1999

1998

1995

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1996 1997


Chap 1

50

40

30

20

10

0

-10

-20





2008 2009 2010 2011 2012 2013 2014 2016 20172015

Unite

d Sta

tes

Hong

Kong

China

Irelan

d

Spain

Indon

esia

Singa

pore

Braz

ilNe

ther

lands

Mex

ico

Austr

alia

Italy

Israe

lSo

uth K

orea

India

Germ

any

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d

Russ

ia

Fran

ce

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da


200

160

120

80

40

0

275

Unite

d King

dom

Hong

Kong

China

Irelan

d

Spain

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Braz

il

Neth

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ico

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alia

Braz

ilInd

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Germ

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d

Russ

ia

Fran

ce

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3,000

2,500

2,000

1,500

1,000

500

0

Unite

d Sta

tes

7,807

Unite

d King

dom

Hong

Kong

China

Japan

Irelan

d

Thail

and

Taiw

an

Unite

dAr

ab Em

irate

s

Spain

Russ

iaSo

uth K

orea

Belgi

um

Singa

pore

Swed

enNe

ther

lands

Germ

any

Luxe

mbou

rg

Fran

ce

Cana

da


350

300

250

200

150

100

50

0

Unite

d Sta

tes

600

500

400

300

200

100

0

48%

46%

44%

42%

40%

38%

36%

Dec.

2002

Dec.

2003

Dec.

2004

Dec.

2005

Dec.

2006

Dec.

2007

Dec.

2008

Dec.

2009

Dec.

2010

Dec.

2011

Dec.

2012

Dec.

2013

Dec.

2014

Dec.

2015

Dec.

2016

Dec.

2017


3,000

2,500

2,000

1,500

1,000

500

0

Unite

d King

dom

Hong

Kong

Switz

erlan

d

Japan

Irelan

d

Spain

Russ

iaSo

uth K

orea

Belgi

um

Singa

pore

Swed

en

Neth

erlan

ds

Germ

any

Fran

ce

Cana

daCh

ina

Unite

d Sta

tes


1,000,000900,000800,000700,000600,000500,000400,000300,000200,000100,000

0

Unite

d King

dom

Austr

alia

Switz

erlan

dDe

nmar

k

Japan

Cana

da

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d

Spain

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enHu

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land

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gal

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Polan

d

New

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nd

Germ

any

Fran

ce

Unite

d Sta

tes

Flux de migration

90,00080,00070,00060,00050,00040,00030,00020,00010,000

0

Cana

da

Unite

d King

dom

Mex

icoItaly

Switz

erlan

d

Denm

ark

Japan

Norw

ay

Irelan

d

Spain

Swed

en

Finlan

d

Portu

gal

Neth

erlan

ds

Austr

iaBe

lgium

New

Zeala

nd

Germ

any

Fran

ce

Austr

alia

Unite

d Sta

tes


50454035302520151050

Unite

d King

dom

Japan

Irelan

d

Spain

Swed

en

OECD

Finlan

d

EU-2

2

Neth

erlan

ds

Austr

ia

Belgi

um

Polan

d

Norw

ay

Germ

any

Fran

ce

Unite

d Sta

tes


35

30

25

20

15

10

5

0

Unite

d King

dom

Japan

Irelan

d

Spain

Swed

en

Finlan

d

Neth

erlan

ds

Austr

iaBe

lgium

Polan

d

Norw

ay

Germ

any

Fran

ce

Unite

d Sta

tes

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

dSw

eden

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

20%18%16%14%12%10%8%6%4%2%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

28%

24%

20%

16%

12%

8%

4%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Ita

ly

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

40%

35%

30%

25%

20%

15%

10%

5%

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Irelan

d

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d


chimie


agroalimentaire

production


70

60

50

40

30

20

10

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

umAu

stria

Polan

d

Irelan

d

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Austr

ia

Polan

d

Irelan

d

45

40

35

30

25

20

15

10

5

0

Unite

d King

dom

Finlan

d

Swed

en

Spain Italy

Unite

d Sta

tes

Neth

erlan

ds

Germ

any

Fran

ce

Belgi

um

Austr

ia

Polan

d

Irelan

d

7,799

70

60

50

40

30

20

10

0

Source: Banque de France, 2018

Fig 7. FDI INFLOWS TO FRANCE - € BILLION

2015 2016 2017

Total FDI flows 42.3 31.8 444.2,2

Share capital 28.6 27.2 28.9

Reinvested earnings 6.8 7.9 6.5

Other transactions(intra-group loans) 6.9 -3.3 8.7

According to data from the Banque de France, the balance of foreign investment inflows in France was +€44.2 billion in 2017, versus +€31.8 billion in 2016, the highest level in the last 10 years. FDI flows from the United Kingdom rose to €17.8 billion (versus only €1.9 billion in 2016), with a particularly marked increase in the automotive, real estate and financial sectors. The other main suppliers of investment flows were the Netherlands (+€7.3 billion, including the buyout of French poultry producer

Duc by Plukon Food) and the United States (+€7.1 billion, including the setting up of a wind turbine blade production facility in Cherbourg by General Electric). Finland, which was the main investor in terms of flows in France in 2016 due to the acquisition of Alcatel-Lucent by Nokia, once again held a rank more in keeping with our bilateral relations (€3.4 billion, versus €12.4 billion in 2016).

Moreover, share capital investments (including real-estate investments)

rose to +€28.9 billion in 2017 in the wake of a number of major mergers and acquisitions (such as the buyout by the German group Boehringer Ingelheim of Merial, the animal health subsidiary of Sanofi, for more than €11 billion). The reinvested earnings amounted to +€6.5 billion, versus +€7.9 billion in 2016. Finally, intra-group loans (flows of internal loans between subsidiaries belonging to the same parent company) amounted to +€8.7 billion in 2017, versus a negative balance of -€3.3 billion in 2016.

Foreign direct investment flows, Banque de France

16

The stock of foreign direct investments (FDI) in France in 2017 was €729 billion, up 9% from the previous year, and rising more quickly than the annual average of around 7% over the five previous years. At sector level, the stock of FDI in manufacturing industries was up 16% in 2017, and with a total of €195 billion – 27% of all inward stock – France was the country that attracted the largest number of industrial investments in Europe.Financial and real-estate activities, which together have attracted more than 50% of FDI stock in France, saw

their investments increase 6% year on year. FDI stock in scientific and technical activities and in construction rose 3%, while the rise was 10% in commercial activities.In terms of French direct investment abroad, the stock of investments was estimated to be nearly €1,200 billion at the end of 2017, consistent with the previous year. The euro zone concentrated 45% of French foreign investment stock, versus 20% for North America, with the United States remaining the leading target for French FDI with €210 billion.

In terms of flows, the balance of French investments abroad was €51 billion, compared with €57 billion in 2016. This decline was due in particular to a negative balance with Belgium (-€10 billion, compared with +€9 billion in 2016), Qatar (-€1.5 billion) and China (-€0.9 billion). The United States remained the leading destination for French FDI flows (+€14.3 billion, versus €15.4 billion in 2016), followed by Luxembourg (+€10.1 billion) and Germany (+€8.6 billion).

Methodology DEFINITION OF FOREIGN DIRECT INVESTMENT FLOWS

Global statistics on foreign investment flows and stocks are collected by UNCTAD (and the IMF for stocks) from central banks, statistics agencies and national governments. At a methodological level, UNCTAD draws on the recommendations in the 6th edition of the IMF’s Balance of Payments manual. However, some differences can be seen between data provided by the two organizations, which can be justified by different presentation criteria – currency, base year, etc.A direct investment relationship is deemed to be established when an individual or company (the investor) owns 10% or more of the voting rights in the company (which is then referred to as the direct investment company) or, failing this, 10% of its share capital. Thereafter, all financial transactions between the two companies are recorded as foreign direct investment in the financial account of the host country’s balance of payments.

DATA RELIABILITY

- FDI flows comprise a wide variety of transactions – business creations, equity stake acquisitions, real-estate investments (included in “share capital”) and intra-group loans – which cannot be interpreted in any meaningful way at aggregate level, as presented by UNCTAD. As such, the Banque de France underlines that the increase in FDI flows observed in recent years mainly arises from intra-group loans, making it difficult to interpret statistics on direct investments at an aggregate level.

- FDI flows are highly volatile and frequently subject to revision. Very sharp revisions from one year to the next may lead to substantial modifications being made to trends and the rankings of different countries.

Due to these methodological limitations, it is paramount to couple the study of FDI flows and stocks with a more micro approach, or by studying firms, so as to examine the nature of the different investment projects. The Business France Annual Report therefore attempts to try this approach (impact study in terms of jobs, value added, and R&D created).

17


Labor market reforms helping businesses to adapt quicker to economic change and providing opportunities for job-seekers

Reforming social dialogue and employment law This comprises three main initiatives, the first of which involves changing the way company and sector-specific agreements relate to one another, thereby ensuring greater scope for safeguarded collective bargaining and for agreements to be concluded at a micro level. Secondly, simplifying and consolidating social dialogue, principally by merging different employee representative bodies and restructuring the way sectors are considered together as branches for collective negotiations. Thirdly, introducing clearer and more

predictable rules to govern working relations, including new upper and lower limits for damages awarded by employment tribunals, reducing time limits for submitting claims to employment tribunals, encouraging mediation between employers and employees, redefining the scope for economic grounds to be invoked in dismissals, and making it easier for companies to carry out restructuring through new collective termination agreements.

Reforming unemployment insurance benefit The self-employed will now be eligible for benefits, as will employees

upon resigning, in return for greater oversight of job-seekers. By underpinning transitions from one employment status to another, this reform will make it easier for people to make career changes towards better qualified jobs and will incentivize the risk-taking inherent in being an entrepreneur.

Reforming professional development and apprenticeshipsthrough a government bill due to be presented in 2018.

Standard corporate tax rate to fall from 33.3% to 25% by 2022, starting in 2018.

Replacing the wealth tax (impôt de solidarité sur la fortune – ISF) by a real estate tax (impôt sur la fortune immobilière – IFI) and

introducing a standardized 30% flat tax (prélèvement forfaitaire unique – PFU) on capital gains.

Transferring the tax burden from employee contributions onto the social security surcharge (contribution sociale généralisée - CSG) to lower payroll taxes and boost employment.

Transforming the competitiveness and employment tax credit (crédit d’impôt pour la compétitivité et l’emploi - CICE)into a permanent reduction in employer social security contributions from 2019 to provide greater hiring incentives.

Tax reforms to underpin competitiveness, investment and employment

18

Action plan to promote growth in companies. The PACTE bill (Plan d’action en faveur de la croissance et de la transformation des entreprises) was presented in the Council of Ministers on June 18, 2018. It aims to lift barriers to corporate growth while also rethinking the role of business in society. This is a

major issue to strengthen the production base and increase the attractiveness of the country.

A major €57 billion five-year investment program to boost France’s growth potential, by fast-tracking ecological transition, building a knowledge society, driving competitiveness through innovation,

and ushering in ‘government for the digital age’.

A new €10 billion fund for industry and innovation, with a particular focus on breakthrough innovation.

Transforming French manufacturing and laying the foundations on tomorrow’s growth

Introducing the right to amend an error for the benefit of entrepreneurs acting in good faith in their relations with the French authorities.

Simplifying the regulatory framework through a ‘one in, two out’ rule1 and by

prohibiting the practice of ‘gold-plating’ EU directives (government circular of July 26, 2017).

A new agenda for Paris’ attractiveness as a financial centerpost-Brexit to enhance France’s financial ecosystem: Abolishing the tax

on intra-day transactions along with the fourth (and previous highest) bracket of the payroll tax (taxe sur les salaires) from 2018; opening new international high schools and setting up new bilingual classes to help high-skilled employees and their families settle in to life in Paris.

Greater simplification of the business environment

1 Any new regulatory standard must be compensated for by the removal or simplification of at least two existing regulations in the same area.

19


The attractiveness of an economy can also be assessed by the number of physical job-creating foreign investment projects (new production facilities or service centers) and business expansions.Each year, according to the Business France Annual Report on the international development of the French economy, foreign investment in France enables around 30,000 jobs on average to be created or saved: this means that France, along with the United Kingdom and Germany, is one of the most attractive countries for job-creating foreign investment projects in Europe.

The number of investment decisions made by multinational firms in Europe remained buoyant in 2017 after rising 12% from 2016.

According to Business France’s Europe Observatory, France received 19% of job-creating foreign investment recorded in Europe, ahead of the United Kingdom (16%) and Germany (13%).

The United States was the leading investor in Europe, accounting for 26% of investments recorded, ahead of Germany with 12% of projects. With 7% of projects, France was the fourth largest investor in Europe after the United Kingdom.

1.2Physical job-creating foreign investment

Source: Europe Observatory, Business France

19.2%

16.1%

4.6%

0.6%

1%

3.4%

3.8%

2.4%

2.1%

1.2%

1.1%

2.3% 7.8%

2.1%

5.1%

13.3%

UNITEDKINGDOM

SPAIN

ITALY

GERMANY

SWITZERLAND

SWEDEN

0.6%

NORWAY FINLAND

HUNGARYROMANIA

BULGARIA

SLOVAKIA

CZECHREPUBLIC

LITHUANIADENMARK

AUSTRIA

PORTUGAL

IRELAND

FRANCE

POLAND

1.2%

1.6%

2.3%

4.7%

0.6%

BELGIUM

NETHERLANDS

LUXEMBOURG

1.3%

FIG 8. DISTRIBUTION OF JOB-CREATING FOREIGN INVESTMENT PROJECTS IN EUROPE (2017)

20

2017, the best year in a decade, +16% increase in foreign investment

According to the Business France Annual Report on foreign investment in France, 1,298 investment decisions were recorded in 2017, up 16% from 2016 (1,117 decisions), enabling 33,489 jobs to be created or maintained. On average, 25 investment decisions were recorded each week in France last year, and 412 new businesses decided to base their activities in France, representing 32% of recorded projects.

There was an 11% rise in the number of jobs created or maintained, with jobs created growing 6% to 26,399, and a 34% rise in jobs maintained, rising to 7,090 jobs.

Foreign businesses prioritized investment in production/manufacturing activities. There were 343 investments in industrial activities in 2017, representing 26% of all investments.

These activities were the leading contributor to employment in 2017, with 16,213 jobs, or 48% of all jobs generated by foreign investment. The number of jobs generated by production/manufacturing investments grew sharply (+44%), which was reflected in a rise in the average project size (47 jobs per investment decision). For example, the Swedish Volvo Group announced several expansions in 2017 at production sites in France, creating more than 160 jobs in the Auvergne-Rhône-Alpes region, while Anglo-Swedish pharmaceutical giant AstraZeneca invested €135 million in Dunkirk, and General Electric (United States) decided to invest €120 million to establish a new wind turbine blade production facility in Cherbourg (Normandy), enabling more than 500 jobs to be created.

There was a 9% increase in R&D, engineering and design investments from 2016: 125 investment decisions were recorded, representing 10% of all projects.

Investments such as these included those by American firm ZenDesk, a global leader in customer service software development, which decided to double its R&D personnel in Montpellier by recruiting a further 50 engineers.

Meanwhile, German group Sartorius, a subsidiary of the Göttingen group, which specializes in producing consumables for the pharmaceutical industry, decided to significantly increase R&D capacity by hiring 200 new employees, including 80 at its facility near Marseille.

21


The presence of R&D centers and headquarters of multinational groups has a domino effect on the rest of the economy through knowledge and technology transfers. Investment projects like these deserve to be recognized as strategic.These activities contribute strongly to France’s investment attractiveness and the growth potential of the French economy. In 2017, France was the country that attracted the most industrial investment, as well as the largest number of foreign R&D centers in Europe.

In 2017, France was the leading recipient of R&D activities in Europe, attracting 16% of R&D centers on the continent, versus 15% in the United Kingdom and 12% in Germany.The United Kingdom remained the leading country attracting corporate headquarters, receiving 25% of all investments in Europe.France was also Europe’s leading recipient of foreign investment in industry, with around 25% of all investments in Europe. For these purposes it enjoys a number of advantages in the field (presence of sectors and major clients, expertise, and transport infrastructure). Among others, France attracts 37% of investments in the machinery and mechanical equipment sector and 25% in the agri-food sector.

France is a preferred destination for foreign investments in the chemicals/plastics sector, attracting 19% of foreign investment in Europe in this area.

France also attracts 15% of foreign investment in Europe in the software & IT services sector, slightly more than Germany (14%).

Finally, in knowledge-intensive services, such as consulting and financial services, France is ranked second among investment recipients, after the United Kingdom.

The Paris financial marketplace appears particularly well placed to increase its attractiveness. Since Brexit was announced, around 3,000 jobs are being created in Paris, according to Paris Europlace, enabling nearly 20,000 indirect jobs to be generated. A number of banks have already announced their intention to set up entire branches of their activity in Paris.

Moreover, the growing attractiveness of the Paris financial marketplace has been shown, notably by the decision in September 2017 to install the European Banking Agency in Paris. This decision will create 170-190 jobs and in the longer term, with the presence of the European Securities and Markets Authority, should enable Paris to lead the way as the European bridgehead for major players from the financial services sector.

22

Fig 9, 10, 11, 12, 13, 14. MULTINATIONAL FIRM INVESTMENT DECISIONS (2017) EUROPEAN MARKET SHARE (%)

2,000

1,600

1,200

800

400

0

1999

1998

1995

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1996 1997


Chap 1

50

40

30

20

10

0

-10

-20





2008 2009 2010 2011 2012 2013 2014 2016 20172015

Unite

d Sta

tes

Hong

Kong

China

Irelan

d

Spain

Indon

esia

Singa

pore

Braz

ilNe

ther

lands

Mex

ico

Austr

alia

Italy

I

Documents

France Attractiveness Scoreboard...largest startup campus, Station F, opened last summer in Paris, while the French tech ecosystem is now the focus of major international recognition