Exclusive interview France: More favourable as a Location

As a neighboring country, France is counted as the most important business market and investment location for German companies. Didier Boulogne, the Managing Director of Business France in Germany, Austria and Switzerland explains the current reasons for involvement and the factors making the location France favorable.

Mr. Boulogne, how is the current situation of French industry?

Even if the French industry is not as strong as that in Germany and though it is spoken about deindustrialization, it remains a major industrial land. E.g. France is ranked number two, just before Italy, if the value added of the industry is considered. Also in all industrial sectors, minimum one company from France is among the world-wide leading companies.

Which are the strengths, on which the French industry is based; what are the weaknesses?

The strengths of French industry are the large corporations. We have 30 industrial companies among the fortune-500, the same number as in Germany. On the contrary, large medium-sized companies with 500 to 5000 employees are lacking. The smaller companies must grow; this is the prerequisite to become successful in the world markets. These also support the government and institutions such as the development bank BPI France. The food processing industry belongs to the strong industrial sectors in France, which is based on the strong agricultural sector. Also the automobile industry plays a key role: Not may countries in the world have their own manufacturers; we have here two company groups. One out of ten workplaces in France depends on the automobile industry. The sector is now getting better than in the previous years; which the suppliers track. Also the pharma industry, biotechnology and aerospace are strong sectors.

How keen are the German companies to invest in France?

In the previous year, we have supported 141 German companies with their investment projects in France; this is a record. The projects are primarily used for the enhancement of existing subsidiaries; these are used very rarely for start-up. Primarily, it dealt with expansion of production; France is currently the European country, in which the companies mostly invest in production.

Which reasons are in favor of a commitment in France according to your observations from the perspective of German companies?

France offers a huge market with 66 million residents, the second largest in EU – with a positive demographic trend. This also has advantages in the labor market. We help the German companies in France, which suffer from shortage of skilled professionals to find a solution. A further advantage is the favorable infrastructure, whether telecommunication, fast internet, highways, trains or other transport options. Also, the energy costs are less for the companies. The attractive prices for electricity and gas are favorable for energy-intensive companies. Lastly, Paris is the city with the second largest concentration in Fortune-500-companies world-wide after Tokyo; however, just before New York or London. Such concentration is a strength as well as weakness for the country at the same time. Thus, Paris is a very favorable city for the companies; a place, where one must be present sooner or later.

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