IT for Export and Import
- By Yelena Anisimova
- Jun. 18 2015 00:00
Futur en Seine
At the dawn of information technology, France created Minitel, a pre-World Wide Web online service, which was widely used until the age of the internet began.
In the second decade of the 21st century, France continues to confidently make itself felt in the innovation race, including participating in the "world competition" for the fastest Internet, and receiving many prizes at the Consumer Electronics Show (CES), a large exhibition for new gadgets and technologies, in Las Vegas, despite intense competition from South Korea, China, the U.S. and Germany.
The share of the Internet-economy in France's GDP for the end of this year is forecast at 5.5 percent (in comparison to 3 percent in 2009). Indeed, the number of French applications for patents places it as second in Europe and sixth in the world. In November of last year at the "Technology Fast 500 EMEA" competition, France took first place and was named the leading country.
The reasonably decent performance figures are forecast to improve in the near future. Several projects, which were launched with the support of the French state, serve this precise purpose.
France Numérique, or Digital France, is a plan that sets out France's proposals for infrastructure development and is the most general document. The plan is largely aimed at consumers, for example, the expansion of the sphere for electronic rendering of state services, the introduction of high-speed broadband, and the improvement of the quality of mobile access, such as 3G and 4G.
The project has already brought certain benefits. According to the EU's Digital Economy and Society Index (DESI), in France many people use online portals for public services. For example, 39 percent of general practitioners store medical data in electronic form (this figure is 36 percent in the EU as a whole), and 28 percent of physicians send digital prescriptions to pharmacists.
France is first in Europe for shopping and watching TV online. For communication on social networks and video calls, according to the DESI, the French use these Internet services less often than other Europeans. A presentation by UbiFrance at the prestigious CES in Las Vegas noted the average Internet speed provided by French telecom networks reaches a rate of 31 Mbit/s (in Paris the average is 78.7 Mbit/s). Twenty billion euros has been invested into high-speed Internet-related projects, which aims to achieve 100 percent coverage across France by 2022.
The mobile communications market in France is the second largest in Europe. Many consumers prefer 4G Internet access. For this indicator, France is also second in Europe.
In 2013, President François Hollande announced a list of 34 strategic high-tech projects for the country. The program is named "New Industrial France." One-third of the projects in the program relates to the IT sector.
Investment in Start-Ups
In 2013, with the support of the French government, the French Tech project was launched, which aimed at giving support to startups with high potential. The project not only supports French companies in the domestic and international market, but also attracts startups from other countries to work in France.
"Foreign companies play an important role in France's economy. In comparison to the United States, Qatar, China and others, Russia's representation is still relatively weak. In Russia, there are a lot of strong tech firms, such as Yandex, and MTS and Vimpelcom, but when these players want to go beyond their own borders, they will face difficulties. As for Russian startups, their challenge is even more difficult. We want to help. If the company wants to expand abroad or to the European market, then, certainly, it's in our interests to attract them to France. This sort of image will contribute to economic growth and job creation," explained Stephanie Morley, department head of new technologies, innovations, and services at the Russian office of Business France.
The investments should be supported by a favorable investment climate. For example, in France there are research loans, which can cover up to 100 million euros in costs and can also be used to pay tax expenses. There are also special "credits for innovations". In addition, companies can receive the status of a "young innovative enterprises," which gives startups a preferential tax regime for eight years. "Due to the riskiness of investments, the State National Investment Bank has created a financial mechanism to facilitate private investment in the venture capital industry. Clearly, it has had a positive effect. BlaBlaCar, for example, raised 100 million euros in 2014," said Stephanie Morley.
French startups also receive support to participate at CES in Las Vegas. In 2014, there were 120 French companies and startups at the electronics show, says Morley. France was the first among the European delegations, and fifth with respect to all participating countries. At the same time, 25 percent of all startups were French.
With regard to efforts to attract Russian startups and small to medium enterprises, the emphasis is on the festival Futur en Seine in June this year. The event brings together 20–25 countries, which demonstrate their technological innovations. This year, the competition is expecting a Russian delegation that will include the Russian Venture Company, a state-sponsored group that supports Russian innovation. The group, in turn, is inviting other Russian startups to join the delegation.
Entering the Russian market, says Ms. Morley, is also important for French Tech. The French occupy a strong position in the field of e-commerce and digital marketing, audiovisual technology, telecommunications, software design, big data, cyber security and the use of drones.
According to the head of the IT department at Business France in Russia, these are the areas where the two countries cooperate effectively.
"In general, I think Russians know where to find experience and knowhow. Even though there is competition from the Americans and Germans, Russia still chooses French firms, if they are really experts in their field," says Stephanie Morley.
For example, the company Sigfox has signed a contract with the mayor of Moscow and is taking part in a project to equip parking spaces in the capital. In the future, other French companies may be in demand in Russia: in particular, award-winning technologies from the CES, such as the Parrot drone, or Netatmo surveillance camera capable of identifying faces, and many others.
The French on the Russian Market
French IT players are already a presence on the Russian market due to their attractive economic profile.
The head of strategy and research at Oxymore Inc., Jean-Christophe Bonis, noted that penetration into the Russian market was understandable, considering Russia's dynamism, prospects, and the size of its territory.
The company promotes education on innovation in Russia. It holds lectures, workshops, and special consultations, but its main goal is the creation of an education platform that uses smart data and artificial intelligence.
For a company engaged in online video streaming that can be integrated on any web page, entering the Russian market is quite a natural step. "The secret for success of a technology company is to be just slightly ahead of the market," Mr. Cellerin said.
The sales director for Russia and the CIS at Arkadin Rus, Yury Larin, noted that good quality services must be represented by staff who speak the native language of the country where the company has a presence.
Moreover, in Russia because of the scale of its territory and its variety of users, multi-platform compatible video technology is particularly relevant.
"France is a leading European country with a rich culture, and this includes technical knowhow. We are pleased to offer Russian customers the best remote-workspace technology developed in France and tested in Europe and around the world," says Mr. Larin.
The general manager for Fabernovel's Russian operations, Lev Samsonov, says that Russia is among the top five digital markets in the world. The possibilities for expansion of the digital revolution in Russia will increase year on year.
"Today, companies need to create new products and services by using their assets and expertise, and not simply rehash and repackage past successes," Samsonov said.
Thierry Cellerin agrees. "Companies still do not understand the possibilities for their businesses through developing their IT. They mistakenly view IT as simply a technology for communication. IT can give businesses new technologies, create new products, and change business models for enterprises… It must be an integral part of strategic planning."
This means that companies will simply have to act, employing innovative technologies, otherwise they will be left in the dust, like Kodak.
According to Stephanie Morley, the task is to help French startups to come to Russia not just to "sell" their products, but to settle for the long term. "The talent and capacity is there, so our group and the French-Russia chamber of commerce and industry are going to help them."