France: a spectacular improvement in attractiveness

12 Jun 2018  2043 | World Travel News

A man takes a picture of the Eiffel Tower in Paris. Reuters

PARIS (AFP) – France’s image as perceived by investors has never been so positive according to auditing firm EY’s annual attractiveness barometer. A spectacular rise that has previously been highlighted by Business France in its “Internationalisation of the French Economy” report, published in April 2018.

The perception of France has never been so positive in the last ten years according to EY’s annual attractiveness barometer, published on the 11th of June. This is evidenced by 81 percent of the 208 leaders interviewed who said they were satisfied or very satisfied of France. This optimism seems sustained as more than half of those asked predict that France’s attractiveness will improve further in the next three years. The French score is far higher than that of its European neighbours with Germany at 45 percent and the United Kingdom on 30 percent.

This improvement in France’s image was already noted in Business France’s “Internationalization of the French Economy”. In fact, Business France’s economists were already noting in April that foreign investments had reached a ten-year high in 2017.

“Multiple factors contribute to the noted improvement in France’s image” explains Christophe Lecourtier, director general of Business France, quoted in EY’s barometer. “Though we are hearing some protectionist rhetoric, the expression of France’s openness to the world has been very well received by foreign investors. The desire to a profound reforming of our economy is also noted as a positive.”

According the EY’s barometer numbers, foreign investment projects in France leaped up 31 percent in 2017 compared to the previous year. This rise confirms new energized growth of the previous year. In total, 1 019 decisions to invest in France were recorded in 2017, creating 25,126 French jobs.

These results confirm the upward cycle observed published in Business France’s April 2018 report on internationalisation.

However, the auditing divisions of private organizations cannot offer an exhaustive analysis as, unlike Business France, they can only reflect investment decisions that have been publicly announced or listed.

But beyond the methodological differences – which explains a slight variation in results – Business France and EY reach the same conclusions: France is particularly dynamic and is closing the gap with its German and British counterparts.

As a result of Brexit and the relocation of certain activities in continental Europe, Germany now leads with 1,124 new investment projects (+6 percent) against 1,075 in Britain (+6 percent) according to EY’s barometer.

The United States are the undisputed leader in foreign investment and job creation in France, with a 40 percent increase in the number of projects, as highlighted by EY. Half of the 223 American investment decisions in France relate to industrial sites, R&D centres and international headquarters.

On which sectors are the most attractive to foreign investors, Business France and EY share the same conclusions: industry leads the way. Despite a drop in industry as a share of French GDP, her industrial fabric remains very attractive and foreign investments in production activities have shot up by 52 percent in 2017, with 323 investment decisions according to EY’s barometer. According to Business France, industry represents 26 percent of all foreign investments, creating or maintaining 16,213 jobs.

On the global scale, France is part of the great innovating countries and more than 8 in 10 leaders perceived her as a creative economy. France is third in Europe, behind the UK and Germany. A notable example: e-commerce giant Amazon announced in May 2017 that it would open its first research unit in France dedicated to drone deliveries, with a dozen engineers developing a drone-based traffic management system.

An increasing number of foreign investors have decided to settle in France’s decision centres.

Last year, 59 new companies have based their decision centres in France, 4 times more than in 2016.

For example. Business France announced in April that Singapore’s H3 Dynamics, specialising in tele-robotics, set up its first European decision centre and an R&D centre, in Paris.

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