PARIS, France — While Britain grapples with its reactionary Brexit vote, across the English Channel, there are signs that long-stagnant France is finally modernising, embracing innovation and competitiveness.
Indeed, in recent years, the country has made considerable headway on important business reforms, many championed by former economy minister and current presidential candidate Emmanuel Macron. On the agenda are plans to cut corporate tax rates, attract investment in high-growth sectors like technology and promote greater labour market flexibility.
In the retail sector, reforms to Sunday trading laws, which were put into place earlier this year, have played an important role in helping to lift sales at Paris department stores at a time when the city is suffering from a decline in tourism linked to security concerns. The change, which was initiated by Macron, established “international tourist zones” in the French capital, within which businesses could strike deals with unions to open on Sundays.
Galeries Lafayette, one of the first to start Sunday trading in its Paris stores, reported a 10 percent rise in sales at its BHV Marais store (where the change was first deployed), adding that Sunday had become its second best sales day. “It was absolutely crucial for us to have the Sunday opening,” said a spokesperson for the company. “It was very important for us to remain competitive with other European cities, to be in the race.”
Increased investment in France’s technology sector is adding to the sense of new momentum. Last year, France became the third most significant European tech hub — after London and Berlin — measured by number of tech start-ups, number of investment deals and amount of capital raised. Initiatives like Le French Tech, a government initiative promoting tech start-ups, have helped. And, in April, Station F, a new tech hub backed by French telecoms entrepreneur Xavier Niel, will open in a former railway depot. Facebook is set to anchor the campus-like location, which aims to house up to 1,000 tech ventures.
“The way the French market has been structured for the past two years, with investors that are more and more specialised in early stages, is quite new,” said Sebastian Fabre, chief executive of luxury resale site Vestiaire Collective, one of France’s leading fashion-tech firms. “When we started in 2009, trust me, it was not easy to start a business. The structure of financing wasn’t very clear for the early stage of a start-up. But now you have many players that are really helping to start a business and for me, it has changed many many things.”
French Touch — a business conference focused at building connections between France and other entrepreneurial ecosystems, with a focus on tech, innovation and creativity — has also helped to build synergies between the tech sector and other creative industries. “The simultaneous development of French Tech and French Touch leads to potential fruitful synergies between both dynamics, which are I believe one of the features of this awakening seen in creative industries and especially fashion,” said Pascal Morand, executive president of Federation Française de la Couture.
“The question in all these cases is to be more competitive, while being oneself,” he continued. “Because the question is to say ‘OK, how can we cope with the great traditions that we have without being slowed down by tradition, which sometimes can work as a burden?’”
Incidentally, change has also come to Paris Fashion Week, which is one day shorter this season. While market reports suggest that some of the brands which had traditionally shown on the last day of Paris were unhappy with their slot, Morand said the change was an experiment. “It’s interesting to see that there is not one type of model [for fashion week]. You have lots of different types of choices. The only problem we have is to co-ordinate with the houses… It doesn’t mean that it will be the same way in October. We are glad to make it happen, to rationalise it this time but we will see how things happen.”
The shifts come at a crucial point for the France, which is set to hold a presidential election in April. Following the UK’s Brexit vote and the election of Donald Trump in the US, some fear French voters will favour far-right populist Marine Le Pen. But if France were to vote for Macron — who aims to cut France’s corporate tax from 33.3 percent to 25 percent; cut public sector headcount by around 120,000 jobs; and carry out structural reforms to reassure economic partners like Germany — France could well see its early signs of awakening turn into real change.