It is one of those paradoxes of which France has the secret. “The country is the most deindustrialized in Europe, but it is the one that has always talked the most about industrial policy,” notes Sarah Guillou of the French Observatory of Economic Conditions, a research laboratory attached to Sciences Po. It is difficult to give wrong to the economist. The Gaullian and Pompidolian ambition of the great champions was followed by decades of nationalizations, rescues, states general and other ministries of productive recovery. The ace. In half a century, France has emptied its factories with a consistency that the social movements aroused by relocations have hardly shaken. Adherence to the idea of the company freed from its factories – the famous fabless theorized at the turn of the 2000s by the former boss of Alcatel Serge Tchuruk – left him bloodless. Since the 1970s, 2.5 million industrial jobs have been destroyed.
But the shocks caused by the Covid pandemic and the Russian invasion of Ukraine have led to the emergence of a political consensus on the interest of strengthening French industry, one of the most fragile in Europe. Armed arm of sovereignty, asset of the ecological transition, tool for creating value and jobs in the territory…: crowned with a host of virtues, the industry and the modalities of its resurrection are all the talk. Nothing to displease the industrialists gathered all this week in the north of Paris to celebrate the high mass of the sector, the Global industry fair, and who have found in Emmanuel Macron their self-proclaimed cantor. Since 2020, the tenant of the Elysée has made reindustrialization nothing less than the “mother of battles”. The result is a fireworks display of pro-business measures: slashing of production taxes dedicated to France Relaunch, support for transition and innovation thanks to 54 billion euros from France 2030, simplification of installation procedures, blow tax boost via the tax credit for green industry… without forgetting the Choose France cuddle therapy sessions for foreign investors, organized every year in the splendor of the Palace of Versailles.
“The momentum is worthy of the Trente Glorieuses”
All backed by the liberalization of the labor market. A proactive policy that is bearing fruit, we trumpet from high places. Rewinding the film from the first five-year term to 2017, the executive estimates that 300 factories have emerged from the ground in the territory. Inaugurated with great fanfare, immense cathedrals are the most beautiful postcards: in Hauts-de-France the concrete and steel monsters which will produce the batteries of tomorrow’s electric cars; in Normandy and in the territories along the course of the Rhône, factories dedicated to the production of the precious hydrogen molecule and all the components of the sector; in the Grenoble hub, the kilometers of clean rooms with employees covered from head to toe so as not to disrupt semiconductor production; elsewhere, drugs deemed critical, from Doliprane to innovative therapies…
“The momentum is worthy of the Trente Glorieuses”, we hear marveling in the maze of the Parisian lookout at Bercy. In seven years, 120,000 industrial jobs have flourished in the region. Reading the rankings, France has been propelled to the top of the most attractive European countries for foreign investors. Who are full of praise for their new country of heart: “Decarbonized electricity is an asset, like the existence of an ecosystem. France played as a team, and our CEO Vincent [Yang] felt very well welcomed”, commented Gilles Normand, president of the Taiwanese battery manufacturer ProLogium in Europe, at the last edition of Choose France. “The choice of France was extremely mature. Its electricity allows us to make products with a low carbon footprint, and we were offered a turnkey site,” added Jan Jacob Boom-Wichers, head of the photovoltaic panel manufacturer Holosolis. This is the nation on the verge of be saved from the nightmare of deindustrialization.
The abysmal trade deficit
But other indicators paint a less flattering reality. Despite the national resources activated and the crucial support from Europe, the share of industry in added value continued to erode from 2017 to 2022 in France. INSEE figures, which include energy production and water management, show a decline from 14% to 13.3% over the period. Those of the World Bank show nothing else: the share of the manufacturing industry in French GDP fell from 10% to 9.5%. Enough to explain why the trade balance is looking gloomy. If energy has weighed heavily in the deficit over the last two years, manufactured products are far from helping to redress the situation. Hand-sewn bags in Louis Vuitton workshops or planes from Dassault and Airbus factories are not everything, and France continues to massively import goods.
There remains clarity on the employment front. Since 2019, the pace has accelerated, with 88,000 industrial jobs created. But for how long ? “Many of the people hired were less trained, which led to an increase in hiring and partly explains the decline in productivity observed in France. However, the phenomenon is transitory,” notes Olivier Lluansi, one of the leading experts in the field. sector, mandated by Bercy to work on the future of French industrial policies. In this context, an increase in the share of industry in GDP to 15% as desired by the executive – without this being a “totem”, the Ministry of Industry is assured – seems presumptuous. short term. “Such a level would imply bringing out of the ground the equivalent of an automobile sector each year. The comparison gives the measure of the ambition”, confirms Vincent Charlet, the general delegate of the Fabrique de l’industrie, a laboratory of employer ideas. Because, despite a severe diet based on offshoring, the French automobile industry still has 1,800 companies and 212,000 full-time equivalent positions today, according to INSEE…
Still numerous locks
Pinstriped suit and aviator-style glasses, the boss of Bpifrance becomes impatient at the presentation of this chiaroscuro painting. Born under the five-year term of François Hollande, the public bank has become the armed arm of the industrial rebound desired by the State. “It is much too early to give in to this French passion which consists of being discouraged. Reindustrialization will be measured over the course of a decade, at least. The share of industry will rise in our country on condition of mobilizing a lot of “innovation, skills, land…” asserts Nicolas Dufourcq in the institution’s Parisian premises. While current policies are effective, they will only bear fruit in the long term, industry experts agree. “For this to work, there will also need to be political continuity. Industrialists will come back if they are certain that the commitment currently palpable will last,” adds Sarah Guillou. The industrial renaissance, a long, undisturbed river.
Especially since the locks remain numerous. In the short term, uncertainties around energy prices are causing a wait-and-see attitude. At the risk of threatening the decarbonization projects of a host of activities, an effort that is nevertheless essential to maintaining the existing fabric? No, we promise the Ministry of Industry. It remains that “the competitiveness gained by the United States [NDLR : avec l’Inflation Reduction Act] requires us to reconsider the question of energy and negotiate long-term partnerships between EDF and major customers to ensure a stable and predictable supply. Especially since at the same time Germany does not hide the fact that it is fighting against relocations with subsidies through the price of electricity”, assures economist Elie Cohen. And this, in a context of access to financing complicated by the economic deterioration and the jump in interest rates. The subject naturally weighs heavily on the shoulders of young shoots, SMEs and ETIs. “Financing remains the first difficulty for new entrants and companies in the “cleantech”, testifies Jules Besnainou, the founder of the Cleantech for France lobby. We are fortunate to have an excellent venture capital network [NDLR : qui finance l’amorçage des start-up]. But real difficulties persist when it comes to supporting industrialization.”
The race for megaprojects, stop or still?
Created three years ago around investors, expanded to include growing start-ups such as battery producer Verkor, the structure advocates for public guarantees to mobilize private investors. An issue well identified by Bpifrance: “The banks are asking to be guaranteed, which we have already done as part of the Verkor project. This should be useful during the transition period, which will allow private finance to resume supporting industry”, assures Nicolas Dufourcq. The subject is central, as the amounts to be paid are astronomical. Last May, economists Jean Pisani-Ferry and Selma Mahfouz estimated the annual amount required to finance the ecological transition in France at 70 billion euros, half of which would be borne by the private sector. Enough to relieve the government, in a hurry to turn the page on “whatever it takes” against a backdrop of a slipping deficit, even if it means making savings at the expense of ecology.
Especially since it is engaged in a race for subsidies to attract megaprojects, like that of the French STMicroelectronics and the American GlobalFoundries in chips. In France, Germany and beyond, tickets are pouring in. Fueled by generous American policy, the competition aimed at attracting projects worth several billion euros – or dollars, it depends – is in full swing.
Is the game worth it? “These gigafactories are important symbols and are the pride of the territories that host them. But is the geopolitical change at work so major that it justifies subsidies of 40% of the investment? The question arises, knowing that these sites will not bring about reindustrialization on their own”, analyzes Olivier Lluansi, for whom such factories will represent at best 20,000 direct jobs, when 500,000 would be needed in the coming decade to make the industry take off again. And to insist: “Not to mention that the capacities of the battery factories announced exceed France’s needs in 2030. This amounts to financing exports, not the ecological transition and sovereignty.” A world separates an outward-looking sector and a resilience industry in tune with the climate emergency. Hence the interest in “thinking about the desired reindustrialization and, behind it, about the way in which we project ourselves as a society,” says geographer Anaïs Voy-Gillis. In its quest, France has many challenges to meet.
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