The protocol is now well established. For the past seven years, dozens of major foreign investors have been invited to the Château de Versailles to demonstrate France's attractiveness as a business haven. President Emmanuel Macron has turned the Choose France summit into a marketing tool, grouping industrial project announcements that were once made on an ad hoc basis. The 2024 edition on Monday, May 13, was particularly buoyant, with 56 investments announced, twice as many as the previous year, for a "record" total of €15 billion, according to the Elysée Palace.
France sometimes has a reputation for not successfully promoting its assets. In this respect, the Versailles Summit serves a useful purpose. Demonstrating that consideration will be given to those who are prepared to invest in France helps to change the image of a country that has not always been considered "business-friendly."
These efforts are beginning to bear fruit. For the fifth year in a row, EY's annual barometer has ranked France as the European champion for economic attractiveness. Since the launch of Choose France in 2018, more than €46 billion have been invested across 178 projects.
Behind the rhetoric, however, the situation needs to be contextualized. First of all, some of the projects would have seen the light of day with or without Versailles. Secondly, many of the projects are extensions to existing industrial sites, which reduces their impact on the economic landscape. Until now, France has struggled to attract gigantic multi-billion euro projects, such as automotive or microprocessor plants.
Eye-catching
Microsoft is an exception, with the announcement of a €4-billion investment. The aim is to develop data centers to strengthen the company's artificial intelligence and cloud computing infrastructure. The amount may be dazzling, but the contribution to regional revitalization will remain modest in terms of employment.
This is a feature of foreign investment in France, which creates fewer jobs than in other competitor countries for the same amount of money. Over the past two years, for example, the UK has attracted roughly the same amount of investment as France, but created twice as many jobs. Another handicap is that, according to data from Trendeo, France attracts only a tiny fraction of outward investment from the world's two leading economies: the US and China.
The glitz of Versailles may be eye-catching, but it should not be blinding. The road to reindustrialization is still long. Some advances are encouraging. In finance, for example, Paris stands out as the European marketplace that has benefited the most from the consequences of Brexit. A positive outcome was not a foregone conclusion. On the industrial front, 300 factories and 150,000 jobs have been created since 2017, but this progress is far from erasing the stigma of several decades of deindustrialization.
The requirements of low-carbon energy sources, a skilled workforce and capital for research and investment are far from being met. All three are vital if France is to regain its position as an industrial power. The investment fireworks at Versailles alone will not be enough to rebuild the economy.