Unemployment Is High, but France Is Fertile Ground for Start-Ups
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Version 0 of 1. PARIS — Government statistics revealed last Wednesday that the number of unemployed French people ticked up again in April, with the greatest increase among men under 25 years old. The next day, taxi drivers across the country blocked traffic and burned tires in a violent protest against UberPop, a popular, though illegal, ride-hailing service. It added up to more bad news for France, now limping through its longest recession since World War II, with youth unemployment hovering just below 25 percent. Yet according to backers of the start-up economy here, there are silver linings among the clouds. “I would argue that this is an amazing time for start-ups in France,” said Liam Boogar, the 26-year-old chief executive of Rude Baguette, an English-language blog for French start-ups. Jason McDonald, 31, European director of the American marketing agency StringCan and co-chair of NextGen, an initiative of the American Chamber of Commerce in Paris, describes an “explosion” inside the French start-up world. This may sound counterintuitive, even self-serving, coming from two young Americans who recently moved here to help French start-ups attract foreign investment and try their luck on the American market. Their argument goes like this: France has long been famous for its highly trained engineers, mathematicians and other professionals who traditionally were steered into long and stable careers in prestigious French banks and companies. “Luckily,” Mr. Boogar said, “those companies have stopped hiring, so that’s 25 percent of young people who have nothing to lose.” There is evidence to support the “explosion” referred to by Mr. McDonald. In 2013, Rude Baguette held an event to bring together would-be entrepreneurs, mentors and potential investors. The first gathering, with 105 attendees, took place in a bar. Last January, the same event attracted some 700 people, and was held in an auditorium. Paris&Co, a municipal initiative to nurture the “innovative” economy, has about 10 incubator sites, from which 104 successful projects were created in 2014. The website VentureBeat reported that the French start-up “ecosystem” raised $85 million in just one week this month, “maybe its best week ever,” continuing a trend that brought in $500 million in investment in the first half of 2014. Last month, Facebook said it would open an artificial intelligence lab in Paris because it is “home to some of the best researchers in the world.” This doesn’t mean that France has become an easy place to open shop. Every entrepreneur has a nightmare story about bureaucratic obstacles, from opening French bank accounts to navigating the minefield embedded in French labor law. That’s true for Internet companies and for ground-level enterprises like Scaramouche, an ice cream parlor that began business in the south of France in 2013 and last week opened an outlet in the Paris neighborhood of Montmartre. To work around arcane banking requirements, the owners, Elizabeth Bard and Gwendal Auffret, a Franco-American couple, had to go through the onerous task of creating a separate Paris-based company. But, entrepreneurs say, things are changing, albeit incrementally, with recent tweaks to the labor law and a program to provide credits for research and development. “The government is figuring out which buttons it should push, and which buttons to leave to the private sector,” Mr. Boogar said. “It can be frustrating,” Mr. McDonald said, “but it is moving in the right direction. You have to separate the French from France.” Most important, young entrepreneurs are reporting a shift in mentality. “Something has changed in the last five years in attitudes towards people trying to create their own business,” said Mr. Auffret, who before ice cream, had tried a start-up in digital entertainment. “We are not looked at negatively. Now, people say, ‘Wow, that’s courageous.”’ The problem, Ms. Bard said, “is that the institutions are not catching up with the changing mentality.” As France lived through another fractious strike, Mr. Boogar said he detected a swing away from the traditional sympathy for protesters — whether they are airline pilots or taxi drivers. “The view now is, ‘Dude, you have a job. Quit complaining,”’ he said. |