Lobbying for Technology: The French Case
European Straits #22
Dear all,
France is a notoriously difficult place when it comes to doing business in technology. Regulatory frameworks have barely been adapted to fit the new technology-enabled business models. The local elite has yet to be educated on the institutional challenges of the new age. And entrenched incumbents have a strong grip on elected officials and civil servants, whom they constantly lobby so as to maintain the status quo. As someone in charge of public policy for a large US tech company once told me, “France represents 20% of our business and 80% of our regulatory problems”.
One reason is that the French economy is still dominated by the state. Hence it’s necessary to secure a good relationship with the government to exert influence on the overall state of things—something the tech industry has yet to achieve. There’s also a lack of diversity among the elite: many in French power circles know each other because they attended the same schools, live in the same neighborhoods, and started their careers in the same organizations. As a result, influence depends not on how much you can pay lawyers and lobbyists, but on how long you have been part of this tight network.
A third, overlooked reason is that France has so far failed to grow its own technology champions. We have Criteo (an online advertising company focused on retargeting), and we have BlaBlaCar (which is still in the race to become a large player in the ride-sharing industry). But apart from those exceptions, most French people see the tech industry as essentially American. The disturbing consequence is that fear of technology is only made worse by France’s traditional mistrust toward the US. For the French elite, making life harder for tech companies is another way of retaliating against American imperialism.
Finally, there’s simply the lack of professionals who are willing and qualified to advance the tech industry’s interests in France. D-J Collins, with whom my co-founder Oussama Ammar and I had lunch yesterday, is the co-founder of Milltown Partners, a London-based global advisory firm with many clients in the tech industry. The reasons why firms such as D-J’s have grown in London and not in Paris are numerous: there’s the fact that PR is a profession with a certain prestige in the UK (former Prime Minister David Cameron himself used to be a PR executive); that London is a major media market, with global media powerhouses such as Reuters, The Financial Times and The Economist; the English language, of course; and that most large US tech companies have located their European management team in London, notably in the policy field.
So is technology a lost cause in France? We at The Family certainly don’t think so. On the contrary, we have many reasons to rejoice considering the radical shifts that are currently on the way. The first, obviously, is the new Macron administration: following last Sunday’s parliamentary elections, the new French president has much room to maneuver and a firm such as The Family now has the opportunity to work with many new, pro-startup ministerial advisors and members of Parliament.
Another cause for optimism: the technology industry has come to realize that in order to increase its weight it is necessary to coalesce, with French startups and large US tech companies joining forces to advance their common interests. US tech companies have the means and resources to exert influence, but as they’re perceived as foreign agents, most of their efforts so far have been ineffective, even counterproductive. As for local startups, their case is easier to make: the local elite considers any French entrepreneur as “one of us”. But hard-working French entrepreneurs don’t have the resources to pay lawyers and lobbyists, and for them infiltrating France’s high power circles would be a distraction over the short term. It’s time all those players, local startups and large foreign companies, work together to lobby the French government.
Finally, the ideas we should advance have never been clearer, and you can count on us to make a big push in the months ahead following five axes:
Education—How to open up the French education system to better prepare our children for the Entrepreneurial Age.
Capital—How to seize the opportunity of the global savings glut and deploy more capital in the local technology industry.
Red Tape—How to ensure that the state becomes a platform and works with entrepreneurs to make life simpler for businesses, especially at the early stage.
Social Policy—How to reinvent the welfare state to cover new critical risks in the age of personal computing and networks.
Regulations—How to make legal frameworks more welcoming for new technology-driven business models.
By the way, I’ve resumed publishing our short Scaling Strategy notes. You can read the latest one here: Startups Are All About Growth.
Warm regards,
Nicolas