The Failure of French Industrial Policy

Abstract

France, for a century, thought of herself as a great industrial nation. This country not only saw a source of prosperity and quality jobs for its citizens but also always considered technological autonomy and industrial power as an attribute of sovereignty. For the classical economist, deindustrialization is a fact of development: the more economies grow and become more sophisticated, the more they produce and consume services, and the more industrial activities migrate to emerging countries. However, in France, the attachment to industry and to an active industrial policy remained strong even as the country gradually embarked on European construction and had to respond to globalization and new technological waves. France has long successfully pursued an industrial policy of major projects. European integration, the ever closer union, the development of regulatory authorities for competition, and state aids led France to dismantle its public intervention apparatus. The introduction of the euro further deprived France of its devaluation power to correct relative competitiveness losses. Thus, France is a pure case of a voluntarist country subjected to the test of globalization intermediated by the European Union whose long-term effects on deindustrialization can be judged.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2

Notes

  1. 1.

    In 2008, according to UNCTAD, for the 15 largest French multinationals, over 60% of their assets and 60% of employment were located outside France. The same year, for the 13 large German multinationals, 46% of total assets were located abroad, 14 points lower than the French multinational.

References

  1. Aghion P (2018) Un an de Macron, le compte n’y est pas. Alternatives Economiques. June

  2. Artus P (2013) France: what should we expect from the tax credit for competitiveness and employment? Natixis, October

  3. Buigues P-A. & Sekkat K. (2011). Public subsidies to business: an international comparison. Journal of Industry, Competition and Trade, 2011, vol. 11, issue 1, 1–24

  4. Buigues P-A. & Sekkat K. (2009) Industrial policy in Europe, Japan and the USA. Palgrave Macmillan

  5. Cohen E (2007) Industrial policies in France: the old and the new. Journal of Industry, Competition and Trade, 2007 7(3):213–227

  6. Cohen E & Buigues P-A (2015)., Le décrochage industriel, Fayard, 2015

  7. CEPII (2019). L’étonnante atonie des exportations françaises. La lettre du CEPII, N°395, Janvier 2019

  8. Cour des Comptes (2013) L’évolution et les conditions de maîtrise du crédit d’impôt en faveur de la recherche July 2013

  9. Eurostat, (2013) High-technology versus low-technology manufacturing

  10. Eurostat, (2011) High-tech statistics

  11. France Stratégie (2018) Rapport 2018: Crédit d’Impôt pour la compétitivité et l’emploi

  12. France Stratégie (2017). Evaluation de la politique des pôles de compétitivité Février

  13. Gallois L. (2012) Pacte pour la compétitivité de l’industrie française, La Documentation française Novembre

    Google Scholar 

  14. Gouvernement (2014). La Nouvelle France Industrielle: 34 plans de la nouvelle France Industrielle Septembre

  15. Institut de l’Entreprise (2012).Pôles de compétitivité: Transformer l’essai Policy Paper, Novembre 2012

  16. McKinsey Global Institute (2012) Manufacturing the future: the next area of global growth and innovation, November

  17. Mittelstaedt JD, Harben G, Ward W (2003) How big is big enough? Firm Size as a Barrier to Exporting Journal of Small Business Management 41(1):67–83

    Google Scholar 

  18. Pisani-Ferry J. (2018). La méthode Macron doit changer. Journal du Dimanche, 1 Septembre

  19. Porter M (1998) Clusters and the new economics of competition Harvard

  20. Rodrik D (2016) Premature deindustrialization. Journal of Economic Growth, 33 21(1):1

  21. Sénat (2019) Pôles de compétitivité: Bilan et Perspective Février

  22. UNCTAD (2018). World investment report

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Pierre-André Buigues.

Additional information

Publisher’s Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Buigues, PA., Cohen, E. The Failure of French Industrial Policy. J Ind Compet Trade 20, 249–277 (2020). https://doi.org/10.1007/s10842-019-00325-0

Download citation

Keywords

  • Public support
  • Business
  • Subsidies
  • Public procurement
  • Competitivity

JEL Classification

  • H25
  • H57
  • L52