Montrose Journal Winter 05
AT THE FOREFRONT OF CHANGE: FRANCE THE GLOBAL BUSINESS PLAYER? -
BERNARD SPITZ, CEO, BS CONSEIL
this era of Euro-pessimism, we are always being fed the formula for
what a European paradise might look like : a region of German
organisation, Italian leisure, English business and French cuisine. Naturally
the same consensus exists for the definition European hell : an inferno
of German leisure, Italian organisation, English cuisine and French
business. But what if they are all wrong ? Never trust cliches. In the
same way as we can eat very well in London, it’s time to end the
simplistic notion so often associated with France – indeed with which
we French sometimes associate ourselves – namely our so-called
inability to be organised, efficient, or good business professionals.
images of disorder in the French suburbs have been broadcast around the
world. And the question on the lips of many Anglo-Saxons has been
whether France, a model country where one buys a second home and goes
almost free to the dentist, is in fact in crisis ? Has Paris become a dangerous city ? And
coming after the rejection of a referendum on the European
Constitution, is this merely another sign of the decline of France in
The reality, of course, is more subtle. France
presents a combination of great successes but also of great weaknesses.
What happened in the suburbs demonstrates that we cannot ignore the
weaknesses for too long without them provoking despair and, fatally,
violence. Paris is not burning, we shouldn’t be worried about that. Rather, it is political immobility that is being burnt to a crisp and which, in the end, could be good news for France.
French public debate, to an extent, was already informed by an awareness that things could not go on as they were. Nicholas Baverez, in an essay on success last year developed the idea of a France in free fall. In
the same tone of self-criticism, a quarter of a century ago Alain
Peyrefitte was already talking about the ‘French illness’. Roger
Fauroux has offered two equally critical polemics about the inability
of France to reform itself : ‘Our State’ and ‘State of Urgency’.
yet as recently as June 2000, Time Magazine headlined ‘the French
Renaissance’ and was expansive in its praise of our modernisation. In
some ways we are ready to recognise our handicaps and force ourselves
to combat them much more than we are prepared to accept criticism from
abroad. Particularly when the abroad in question is close to the Bush
Administration…but that doesn’t mean France is set in aspic.
Often when we talk of assets and handicaps, the temptation is to draw on the past to create an impression of the present. This is an exercise that tends to remind us that France has moved in just a quarter of a century from being a predominately
farming economy to becoming the second or third biggest exporter of
services in the world; from constant inflation to monetary stability. These
areas of excellence are clear drivers for the future and offer real
value to a host of industries, including for example
telecommunications, aerospace, transport, the Arts, fashion and luxury
goods, distribution, foods, cars, the BTP, energy or water distribution.
examples help to remind people of an incontrovertible truth : namely
that France has accomplished a vast transformation and should never
underestimate its capacity for change. What emerges as the most
important lesson for our future is to envisage our assets and handicaps
not as mutually exclusive but as part of a single, dynamic concept.
first asset is the flexibility of our population to adapt. This has
been exemplified most obviously in the past decade by the trouble-free
adoption of the Euro and the widespread adoption of digital technology.
Next comes the quality of our education and by proxy the productivity of our employees who, according to businessmen based in France, are among the very best in the world.
industrial specialisation has seen us create, in a number of sectors,
leaders which are not merely European but also global, with real access
to international markets.
the attraction of our country is often demonstrated in terms of
tourism, we should not forget the large number of investors ready to
base themselves in France and invest in French businesses. This makes France among the most privileged countries in terms of foreign investment.
Then there is the quality of infrastructure networks and public services. The
widespread power cuts in the United States and elsewhere, decaying
state transport networks and the difficulty of access to quality care
in many countries serve to remind us of the importance of these assets,
as much elements of individual security as factors in a competitive
economy. The same can be said of an
administration that is honest, competent, modernised, open to new
technologies and willing to play the European Union game.
the end it is about putting into action the new French form of
liberal-colbertism, a modern but largely practical effort at state
level to ‘do what I say, not what I do’ In
contrast to the two-faced American attitude which advocates liberalism
in big international negotiations but does not hesitate to encourage
the discreet support of the federal state for big companies, France is
actually in the process of inventing a symmetrical model: one which
profits when it offers the advantages of liberalism to favour the
international development of its champions, as in the acquisition of
marquee foreign brands by Pernod-Ricard or the re-purchasing of Nissan
– or the opposite by devising poisoned pills to discourage foreign
investors not welcome in France such as in the case of Danone, Alstom
very real handicaps can undermine our position, curbing the intrinsic
dynamism of the French economy and preventing us from putting our
assets to good use. Our
first handicap is a lack of self confidence which translates into a
growing number of fears that hold back our economic growth and divide
our social plan. The fears are many :
globalisation, inequality, unemployment, legal complexity, new
technology and an erosion of the safety net that represents state
second handicap is the weakness of our intermediary bodies, notably our
unions as well as the structure of working rights which encourages a
culture of conflict over negotiation. The third handicap is the delay
in modernising public structures and adapting methods of social
security to meet our demographic demands. The
result of this is not merely an extraordinarily constrained management
of the budget, but also an inability by the state to dedicate the means
necessary for the future, as much for long-term investment or human
capital as for research and higher education. In
short, the state lives below its means but does not dare admit it,
particularly in advance of elections. Our final handicap became only
too clear during the referendum on the Constitution. It resulted in a
real loss of influence within European institutions.
we have two Frances drawn along grand lines : the one is based on
access to the outside, on movement in the workplace among the younger
members of the population and those who have received the best levels
of training. This France welcomes globalisation
with open arms. Many leave here to go elsewhere, in particular to
London, the latest destination of choice for many young French people.
the other end of the spectrum is the brittle France, more
individualistic, largely sceptical and conservative, elderly and
anxious about the most vulnerable elements of society. For this France, globalisation is seen as an assault on our way of life and as a brutal rejection of social protection.
Of course it is in this duality that we discover the most oppressive menace for the future social cohesion of our country. Such
separation could have happened in any number of European countries.
Great Britain has had the good fortune, like many other countries in
the Union, to have invented a political leadership capable of
reconciling these two apparently contradictory interests.
In France the problem remains unresolved and is at the heart of the next election in 2007. In
order to win power in France is it necessary to use a political
discourse which is rooted in the past to reassure the France that is
anxious – the France that appears to have been in the majority in our
Many on the left and right believe that it is possible to defend our social model without profound change. A
political victory based on such a premise could end very badly, not
merely for our economic future since public deficits would rapidly
become untenable, but also for our social plan.
Nothing is certain. Some of us hope that in 2007 there will be a rather different outcome, one in which France will change its political leadership and wholeheartedly turn its assets to good use. A
country free of the shackles of pointless responsibilities, which can
return confidence to her own entrepreneurs and make them want to open
businesses in France. A country which
rediscovers social dialogue and fluidity in the workplace, which
balances her public finances for the assistance of research and
attracts the best foreign students, and which assures modernisation of
her public services and financing of social systems. In short, a France
that generates confidence and hope in society as a whole, this country
would be unbeatable, except perhaps on the football pitch. France certainly has the capacity for change as witnessed by the relentless march of enterprise in the course of past decades. She
has the imagination, as proven by her new liberal-colbertism. All that
remains is for a new political leadership to give her the desire,
courage and the will.
Bernard Spitz is CEO of BS Conseil, a strategic consulting company, and teaches at the Sorbonne. A
member of the Council of State and former adviser to French Premier
Michel Rocard, he is a former head of strategy for Vivendi. He was co-author, with Roger Fauroux, of the best-sellers ‘Notre Etat’ and ‘Etat d’urgence’.