La France Numérique: Grandeur and Decadence

Photo: A woman is checking her phone while walking, in Paris. Credit: Steven Lasry via Unsplash.
Photo: A woman is checking her phone while walking, in Paris. Credit: Steven Lasry via Unsplash.

July 12, 2022

EXECUTIVE SUMMARY

In his 1837 novel Grandeur et Décadence de César Birotteau, the French novelist and playwright Honoré de Balzac portrayed a successful and arrogant Parisian perfumer who, a victim of his success, became delusional and squandered his wealth with visions of grandeur and frivolous expenditures. French digital policy does the same, navigating between grandeur and decadence.

Grandeur has been placed first and foremost, as French politicians refer to this Gaullist expression to achieve what they call digital sovereignty. While debate remains over the exact meaning of the term, the French conception emphasizes national self-sufficiency in most digital technologies. The assertion of grandeur and sovereignty has never been as vocal, even as France’s influence on the international stage wanes. In the past, France has spent public funds on a series of misguided state-run projects,  — Plan Calcul, EuroNet, and even a public effort to rival Google called Quaero. All ended in undeniable, often costly failure.

Present day French digital policy can point to undeniable tech success stories. France is home to a growing number of innovative tech start-ups. Its e-commerce market is one of Europe’s largest and most competitive. It is loosening its labor market to allow Uber and other gig economy actors to flourish.

But these attempts to achieve grandeur lead French politicians to flirt with decadence — and to revive the Gaullist tradition of alleged neutrality between, on the one hand, the United States, and on the other hand its main rival — yesterday, the Soviet Union, and today, China. Disheartened by the transatlantic relationship following the announcement of AUKUS, a new Australia-United Kingdom-United States security pact that cost France a submarine contract with Australia worth billions of dollars, France’s attitude toward the digital agenda is to pretend to practice some form of equidistance between the United States and China.

Paris downplays the cybersecurity threat posed by China. Given the considerable influence of France, and especially of any French president, on European digital policy, this internal and existential French dilemma of how to remain independent of both the US and China may prove decisive for the future (and reality) of transatlantic digital policy.

The French quest for digital independence creates tension within the EU. Other Europeans — start with Denmark, but also, as we will see, Italy and Poland — prefer to partner with US companies.

DIGITAL PERFORMANCE

France’s digital performance has exceeded expectations. Over the last few years, French society has embraced digital technologies and French tech start-ups are scaling up.

Digital adoption has increased dramatically. In 2020, France ranked second after Switzerland among the Organisation for Economic Co-operation and Development (OECD) countries in adopting high-speed Internet subscriptions per 100 inhabitants.1 Out of 65 million inhabitants, France has 59 million Internet users — a 91% rate.2 It has 49 million active social media users, and 67% of the French population makes online purchases or pays bills online.

E-commerce is booming, with an average annual growth in France of 18%. It accounted for $54 billion in sales in 2021. In France, the average cost for broadband is about €28 per month — a low price when compared to the €58 for Americans or the €34 for Swiss and Danes.3

France’s venture capital market is burgeoning: start-ups raised more than €11 billion in 2021, well above the €5 billion raised in 2020.4 The French venture capital market is Europe’s third largest, after the United Kingdom (€32 billion) and Germany (€16 billion).5 Notable successes include companies like Back Market for secondhand smartphones; BlaBlaCar for ridesharing; Deezer for streaming music; OVHcloud for cloud computing; and Sorare for blockchain soccer card trading.

The “French Tech” initiative created in 2014 and dedicated to growing French start-ups is another success story.6 By the end of 2021, France counted 26 tech unicorns, companies with at least €1 billion in market valuation.7 This goal was achieved well before the original 2025 target.

Located in Paris, Station F is the world’s largest start-up campus, incubating more than 1,000 tech start-ups.8 The upcoming University of Paris Saclay campus plans to bring together prestigious French universities and leading corporations. It already boasts 155,000 researchers and ranks 14th worldwide in the Shanghai University overall ranking of universities globally.9 French tech companies are oriented toward international opportunities: 40% of their revenue comes from outside France, and they accounted for a 14% increase in French exports between 2020 and 2025.10

The French government has launched a French Tech Visa to attract foreign talent to France with a simplified, fast-track scheme for non-EU start-up employees, founders, and investors.11 Visas apply to family members, are valid for four years and renewable, and are not conditional on the applicant having certain educational qualifications.

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VIEWS ON EU DIGITAL POLICY

France is Europe’s leading cheerleader for digital sovereignty, the pursuit of a utopian tech multipolarity that makes the country a divisive — and decisive — voice in the transatlantic digital partnership.12 It pushes forward a hopeless goal to “Europeanize” US and Chinese tech platforms, pursuing a sovereign cloud” forcing companies to store data inside its borders, and imposing a digital tax on Internet platforms located outside the country but selling to French consumers.13 In 2017, French President Emmanuel Macron laid down his vision that a “key to our sovereignty concerns digital sovereignty.”14 He stated that “rather than bemoaning the fact that the current leaders in digital technology are American, to be followed by the Chinese, we must create European champions.”

When France presided over the Council of the European Union during the first half of 2022, the French vision of digital sovereignty became a European priority.15 France embraced the Digital Services Act (DSA) and the Digital Markets Act (DMA) unconditionally, as these pieces of legislation contribute to transferring power and wealth from US tech companies to European and French ones. In February 2022, France pushed to create a new European public fund to support scaling up start-ups.16 Macron has advocated for creating 10 Big Tech companies in Europe by 2030 — companies whose market capitalizations would reach tens of billions of euros (“the decacorns”).17

France desires to remain independent in the quest for tech leadership between the United States and China. Paris has avoided banning Chinese information and telecommunications company Huawei despite cybersecurity concerns made clear by the National Cybersecurity Agency of France (ANSSI).18 Huawei already supplies half of the network infrastructure of the French companies Bouygues Telecom and SFR. Here, the notion of sovereignty seems to not matter as much as when it comes to US digital platforms.19

Photo: Face ID information shown on an IPhone in French. Credit: Mathieu Improvisato via Unsplash.

DIGITAL POLICY

French digital policy relies on the Digital Agency (Agence du Numérique). Created in 2015, this agency is dedicated to “preparing” French society for the digital revolution.20 It oversees:

  • Executing a High-Speed Broadband Plan (Plan Très Haut Débit) aimed at covering the entire French territory with high-speed Internet.
  • Launching the Tech Society (Société Numérique) to foster the opportunities enabled by digital technologies.
  • Support for French tech start-ups domestically and globally.

As part of the European Union’s (EU’s) Digital Single Market program, France has launched a national strategy to encourage even its most vulnerable citizens to adopt digital technologies.21 It is part of the French Tech Tremplin aimed at identifying “French-speaking aspiring entrepreneurs from tougher backgrounds and welcoming them into the French tech ecosystem.”22

The French approach to digital technologies is illustrated in the 2016 Law for a Digital Republic (Loi pour une République Numérique). It addresses multiple issues such as digital accessibility, a sovereign operating system, digitalization of administrative documents and procedures, fiber Internet everywhere, and fairness obligations for digital platforms.23

In a post-COVID-19 France, the recovery plan (France Reliance or Relaunch France) will invest €7 billion in the digital economy, with €3.7 billion allocated to start-ups and strategic digital technologies, €2.3 billion to the digital transformation of the state, €300 million to training in digital professions, and €800 million to the dissemination of digital technology.24

French digital policy embraces EU regulations and portrays strong enforcement actions against the United States. With the idea of scaling up French tech companies, the desire to regulate foreign tech companies remains fundamental to the notion of digital sovereignty in France.

France possesses a powerful potential for being a powerhouse of digital innovation in Europe. The success of French tech, its high-skilled workforce, its robust infrastructure, and the high penetration rate of broadband demonstrates such potential.

Positive results are already visible: France remains third after the United Kingdom and Germany in Europe for its ability to nurture tech start-ups. Macron has scored considerable successes — removing red tape, reducing taxes, easing immigration, and investing in universities and training. However, significant improvements are still required.

France should exploit its formidable potential with a more coherent digital strategy. Otherwise, its dreams of digital grandeur could very well drift away to digital decadence.

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