The Luddites running France

France’s policies towards the technology industry are facepalm-worthy 

Foreword: I’m no expert, I’m just a French guy in London who’s baffled at some of the things the government back home is doing and wanted to share them with people who don’t follow French politics. Views are my own.

The French government’s reaction to disruptive technologies is becoming increasingly depressing to watch.

You may have heard of the latest ridiculous law: to protect the interests of traditional taxis, operators which offer pre-booking taxi services will not be allowed to pick up a passenger less than 15 minutes after the taxi was ordered. The law has been passed and will be enforced from January 1st, 2014. So if the cab you’ve just ordered happened to be a block away and shows up within 5 minutes, you’ll both have to wait around for 10 before you can go on with your lives.

The good people of Twitter didn’t disappoint and promptly ridiculed this law through the hashtag #PourNePasFaireConcurrence, my favourite zinger coming from Libertas, a French liberal newspaper:

#ToAvoidCompeting with candles, lightbulbs will have to take 15 mins to turn on

But seriously, it’s notoriously hard to find a cab in Paris — taxi licenses are capped at 17 500, and there are only 1000 VTCs (on-demand cabs) around. London, which has a similar population, enjoys 20,000 licensed black cabs and 50,000 minicabs — consumers are getting screwed just because the government fears the Taxi lobby. Besides, there must be a smarter way of keeping taxi drivers off the streets than imposing this wasteful, childish, and arbitrary time limit on competing services.

This certainly isn’t the first time the French government uses its clumsy legislative wand to pick winners and losers and hurt tech businesses and consumers in the process. Here are two other notable, recent idiocies:

October 2013 — The ‘anti-Amazon’ law

This time, under pressure from France’s 3000 independent bookshops, a bill was passed to prohibit online retailers (read Amazon) from offering free delivery on books being sold at 5% discount from the editor’s list price. By the way, it’s already illegal (under a fixed book price law passed in 81) to sell books at more than 5% discount.

France holds dear its local bookshops (which it has 3 times more of than the UK where the fixed book price law was abolished in 95) so this law is somewhat understandable. What’s unsettling, however, is that this law was proposed by the right-wing party and unanimously approved. Consumer purchasing power is being hurt and no one cares.

May 2013 — Blocking Yahoo’s purchase of Dailymotion

This was another devastating fiasco for the French tech ecosystem. One minute, the French government is trying to foster foreign investment in its economy; the next it’s blocking Yahoo’s purchase of 75% of Dailymotion (the world’s second biggest video-streaming website) from its owner France Telecom — a private company which wanted to sell! The government had no judicial right to do that.

Yahoo was seen as a perfect partner for Dailymotion to grow the company, not least internationally, but the minister of ‘industrial recovery’ Arnaud Montebourg couldn’t resist the PR stunt of standing up to the greedy Americans.

It’s not all bad, though. Look — the French recognise the importance of fostering innovation and helping SMEs grow. They even appointed a minister of the ‘digital economy’, Fleur Pellerin, to do that. So what’s she up to? Oh. She’s setting up start-up incubators for French companies in China and in the Valley.There’s a good idea! Let’s make it even more attractive for job-creating, high-growth companies to take their business elsewhere!

All these questionable policies add to the already-dire fiscal, legislative, and cultural climate that businesses find themselves in in France. I won’t attempt to explain that but I can offer an empirical comparison with the UK, staying on the tech sector vertical.

In the UK, technology start-ups currently account for a 8% of the country’s GDP, set to rise to a whopping 12.4% by 2016, according to the National Institute of Economic and Social Research. In France, that figure will hit a measly 5.5% in 2015 according to projections from the ‘France Numérique 2020′ plan. (sources)

This contrast reflects the opposing attitudes of the governments on both sides of the Channel. The UK has fully embraced the digital age, and has developed the best tech ecosystem in Europe. Committing resources to Tech City — the cluster of tech companies and financial and governmental organisations to help them grow — certainly helped; so did the Seed Enterprise Investment Scheme which offers substantial tax relief from investments in small, unquoted companies and has made London a great place to be to make & receive Angel investments. No dice on this happening in France, where entrepreneurs revolted following Hollande’s fiscal reform (the government acknowledged their protest and tracked back, before screwing them after all).

Another testament to the sound policies from Whitehall is Google’s plan to build a gigantic $1bn London HQ for 5000 staff, which will be their largest office outside of Mountain View and a natural boost to the economy. They could have expanded their European HQ in Dublin, or chosen to set up camp on the continent, but no — London’s become the place to be.

Perhaps predictably, London’s growing ‘tech-appeal’ (I won’t use that word again, promise) has led to a sizeable shortage of skilled technologists in the capital. Thankfully there’s plenty of good French engineers ready to hop on to the Eurostar (on a one-way ticket) — if they haven’t already been lured to the Valley by their own government, that is…

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