I recently had the unique opportunity to join selected MIT faculty, students, and staff to discuss the current business climate with John Chambers, the Executive Chairman of the Board and former CEO of Cisco Systems. He was the guest of honor at a recent MIT Leadership Center luncheon and it was pure luck that I ended up sitting next to him as our meal was served.
My question to John was: what he thinks we should be doing to educate entrepreneurs today (that is currently lacking). Although he didn’t answer that question directly, he did talk about the differences in East Coast and West Coast philosophies. The West vs. East innovation discussion is always a good one (see my blog on Massachusetts being ranked the most innovative state in America) and it was clear that John felt that in Silicon Valley, it is more important to be a founder/key engineer than is to be the CEO of a Fortune 100 company.
We then started discussing innovation in other countries, particularly France, in light of my upcoming keynote speech in Paris at the symposium on Entrepreneurial Research: Past, Present and Future. John remarked that the French entrepreneurial ecosystem is actually as large as Boston’s. I was a bit surprised, but also intrigued as I’ve been researching how the French approach entrepreneurship to prepare for my presentation.
Here are some of the highlights of my research I thought I’d share:
- The French business environment has undergone radical change in recent years. Investment activity in French startups has been on a steady rise. Moreover, it is coming from all sides of French society – the government, the corporations, and the new wave of entrepreneurs. In addition, France has over 100 venture capitalists who invested more than $2 billion in 2016.
- This activity has changed the general attitude among the younger generation towards entrepreneurship. Up until 2012, France’s best talent was driven to big firms. However, now more than 50% of young people between the ages of 18 and 24 want to start a business, and 1 in 3 of France’s 70,000 Ph.D. students also want to create their own business. At this moment, France has more than 50 startup accelerators, and more than 100 co-working spaces have opened their doors recently.
- President Hollande’s socialist government has made fostering startups an economic priority with a cohesive policy that has included:
- Tax incentives for new businesses
- Government and public sector funding
- Creation of Special Tech Programs on national and regional levels
- New crowd-funding legislation
- The weak point of French VCs is lack of sufficient capital for later-stage funding rounds, forcing many promising French startups to look abroad for their financing needs or get acquired by global multinationals.
- According to French government, more than 550,000 startups are created each year. More than $2 billion was invested in French startups in 2016. Three startups raised more than $100M:
- Sigfox (IoT ecosystem)
- Deezer (Music streaming)
- Devialet (Sound technology)
- According to European Digital City Index (EDCI), Paris is the 5th best city for startups in Europe. According to the Compass 2015 Global Startup Ecosystem Ranking, Paris is the 11th best ecosystem for startups globally.
- Brexit creates excellent opportunity for France to lure best tech startups from UK and transform itself into the #1 European and one of the leading global startup hubs.
- The presidential elections that will be held in April and May 2017 should be carefully watched. The possible win of Mr. Macron could be a big boost for the French entrepreneurial ecosystem since his tenure as a Minister of Economy was huge boon for the French startup ecosystem.
As Americans we tend to critique French capitalism due to issues such as a high level of government intervention, inflexible labor laws, a fear of failure among entrepreneurs, and the lack of innovation. However, all this is changing.
I look forward to my visit to Paris in the springtime and will share what I learn at the symposium.