The French Dream of Silicon Valley.
Paris is the Capital of European startups, but is it sufficient to make a Silicon Valley?
In february 2014, the minister of Higher Education and Research Genvieve Fioraso, displayed her ambition to create a 'French Silicon Valley'. The 6th October last, whilst visiting Paris, the president of Cisco, John Chambers, echoed her about French Tech declaring “to have the impression of seeing Silicon Valley in France”. He added in substance that “Decision makers of France better understood all that the numerical revolution can bring to everyone” and announced an investment of 200 million euros in French startups. Equivalent to the whole French tech budget allocated by BPI. An astounding speech on the part of an American director in the 35hrs country with oversized working codes and dupe contractors.
Paris, the capital of European startupsAnd yet, with 10 000 startups, France has at disposition the first European breeding ground. Paris alone counts more than half of the country’s startups, surpassing London and Berlin. Accompanying public structures, incubators, accelerators or again fablabs, have flourished these last years. The Numa district, first french accelerator, has even been baptized Silicon Sentier, for the technologic nuggets that abound there.
In 2016, a new step will be taken with the opening of La Halle Freyssinet, in the 13th district. This project co-financed by Xavier Niel et la Caisse des depots will be able to welcome 1000 startups and therefore constitute the world’s largest incubator.
Indisputable AssetsFrance disposes of more and more favorable surroundings for innovation. On one side, thanks to their higher Education Institutions, the country forms amongst the best engineers in the world. The latter cost half as much as those from San Francisco Bay thanks to credit-tax research. A real catalyzer of the R&D in France. This mechanism the most in Europe has notably allowed to attract the research centers of Google and Microsoft.
Furthermore, the creation of the BPI and the implementation of tax optimization tools such as FCPR and FCPI funds, allow boosting the funding of our startups. A study from EY shows that investments grew by 70% in 2015, rising to 759 million euros raised for 244 realized transactions, representing an average ticket of 3.1 million euros. Such ecosystem enables France to be ranked in 2015 for the third consecutive year at the head of the Deloitte list of 500 firms in the technological sector having made the largest growth in the zone EMEA.
Insufficient fundingAll is not acquired so far. Despite the measures put in place to facilitate the funding of startups in France remains low. France invests 10 dollars by habitant in capital risk, against 85 in the United States and 110 in Israel. As analysis of startup success show that a primordial element to reach a critical size is scale-up, here the French startups fail. As underlines a recent study, there exists a strong connection between the invested amount in a startup and their fulfillment. France only counts three unicorns, Criteo Blablacar and Venteprivée.com, these firms whose values are over a billion euros, placing the country fifth in the European range.
Another brake to the emergence of a French Silicon Valley concerns working rights. Their rigidness is not compatible with the nature of instable activity in a startup, explaining in a large part the fact that only 13% of American investors have a positive image of France, as shown in the last barometer of EY.
Finally another factor of the Silicon Valley success, is the profound difference with France, the extremely developed enterprising culture, a culture of risk that encourages enterprising and valuates failure. The entire contrary to France, where failure is very poorly viewed. In this respect an eloquent number: in average nine years are needed to get over a professional failure against only one in Denmark and six in Germany.
Which country is the unicorn champ?