Deal-Maker Macron Woos Vegas by Pledging France Can ChangeHelene Fouquet and Marie Mawad
Emmanuel Macron’s arrival as France’s economy minister has added some youthful appeal to the country’s struggling Socialist government. This week he’ll try to lend some of that sparkle to French startups seeking investors at the Las Vegas Consumer Electronics Show.
While France has a recent record of unwanted interventions in the activities of technology companies such as Uber Technologies Inc. and Dailymotion SA, it’s also home to a thriving startup scene -- something Macron is eager to tap as he attempts to revitalize his country’s flagging economy.
The 37-year-old former Rothschild & Cie banker will become the first French economy minister to attend the technology fair, which opens to the public today, offering support to companies from drone-maker Parrot SA to smartwatch designer Withings SAS.
The Vegas visit is evidence of how Macron, appointed in August, is pinning his hopes on the digital industry to help halt a three-year climb in French unemployment. It also signals a break from the past, when French politicians were more likely to treat business with suspicion than spend their holidays in Silicon Valley or dine with billionaire entrepreneur Xavier Niel, as Macron has done.
“I don’t want a country completely resistant to innovation, to modernization, to acceleration -- that’s exactly the opposite of what I want,” Macron said at LeWeb technology conference in Paris last month. There, he scrapped the usual formal political protocol of pre-written speeches in French and posed for a “selfie,” while sporting the rooster-shaped pin of entrepreneur group French Tech.
“Macron is sending a message that France is able to change and the mistakes the government made in the past, like the Dailymotion case, have to be forgotten,” Jean-David Chamboredon, who heads French investment fund ISAI, told Bloomberg Television today. Macron’s predecessor Arnaud Montebourg blocked Yahoo! Inc.’s $300 million bid for Dailymotion in 2013, saying it wasn’t in the national interest.
In Vegas, Macron will be looking to promote an image of a France that is open to investors. He’ll meet with chief executives from companies including Intel Corp, as well as Bobby Franklin, head of the National Venture Capital Association, and Consumers Electronics Association chief Gary Shapiro.
French business will be out in force to back that message, with 120 companies planning to attend, the biggest national representation from Europe. Half will be startups.
For French entrepreneurs, Macron’s appointment as France’s youngest minister is welcome, though there is skepticism about how far he can simplify the myriad rules that hinder small companies trying to grow.
“The tech world is finally getting a minister who understands it -- it’s certainly a good start,” said Loic Le Meur, an entrepreneur and founder of the LeWeb conference. “Still, ministers have a habit of coming and going without much changing in France. What everyone is really waiting for is concrete action.”
Jean-Luc Errant, founder of Cityzen, inventor of the connected t-shirt which won an innovation prize at the Vegas show last year, plans to lobby Macron about investment over lunch today. “There’s a real problem with startup financing in France, because entrepreneurs don’t always have access to banks and investors,” Errant said. “Someone with a minister’s stature and an extensive address book can definitely make a difference.”
Macron is certainly keen on networking, something drummed into him by political mentor Jacques Attali, one of President Francois Hollande’s most influential unofficial advisers. He has handed out his e-mail address at conferences, responding personally to messages telling him how France can improve.
And the stakes for France are high. Consulting firm McKinsey & Co. estimates that digital companies there had combined sales of 113 billion euros ($135 billion) in 2013, about 5.5 percent of the nation’s gross domestic product. The country ranked eighth internationally, ahead of Germany but well behind the 10 percent for the U.K. -- Europe’s leading digital economy.
Sales at French digital startups are also increasing rapidly, doubling in 2013 to 2.3 billion euros according to consultancy EY, which explains Macron’s interest as he hunts for growth.
With GDP forecast to increase by about 1 percent this year and France facing pressure from Europe to modernize its economy faster, Macron is aware that time is short for him to make a difference and establish a track record for any future political ambitions. The Socialist government’s term of office runs until the first half of 2017.
“He has an opportunity and he knows it may not present itself again,” said Bruno Cautres, a political analyst at Paris-based research center Cevipof. “He has only a few months, a year at most, to play his cards right and modernize France.”
Macron could take advantage of the relative lack of red tape in France to start a company. According to the World Bank Doing Business 2015 report, it takes 4.5 days in France to start a business, compared with 6 days in the U.K., 14.5 days in Germany and 16 days in Sweden.
For the technology industry, Macron has promised to change the environment and support small businesses by making the job market more flexible and cutting taxes, although entrepreneurs are still waiting to see what that means in practice.
Yet his popularity, alongside that of fellow Socialist reformer Manuel Valls, the prime minister, does offer evidence that the French public may be more pro-business than its political class. A survey by pollster BVA in December gave him an approval rating of 39 percent, the highest of any minister, even as he prepares a new law that would allow French shops to open on Sundays, foster competition in regulated professions and speed up disputed firings.
“The bottom line is French people like Macron -- they see him as someone who gets things done,” Cautres said.