France - Overview:
France has a population in the region of 60 million people and is one of only four countries in Western Europe to boast a trillion dollar economy. It is a founder member of the EU and belongs to several other prominent international bodies including the Group of Seven industrialised nations, the International Energy Agency, the International Atomic Energy Agency, the General Agreement on Tariffs and Trade and the World Trade Organization.
State involvement in the economy has traditionally been greater than most other countries in Western Europe and remains significant in both the transportation and utility sectors. However, the government's role has been changing recently, with its holdings in the insurance and banking industries, defence industries, France Telecom and Air France passing to private ownership since the beginning of the 1990s.
In a report published by the OECD, France's national GDP stood at around 1342 billion euros in 2001, while the French National Institute of Statistics and Economic Studies put growth at 1.8 per cent for the same year. The IMD World Competitiveness Scoreboard 2002, which takes into account a country's economic performance, government efficiency, business efficiency and infrastructure, ranks France 22nd of 49 countries around the world.
Economy:
Figures published by the World Bank show that the service sector is by far the country's most important sector, accounting for approximately 71 per cent of GDP in 2000. In the same year industry accounted for around 26 per cent and agriculture for almost 3 per cent.
According to the Féderation Française des Sociétés d'Assurances, the French insurance industry alone employs more than 203,000 people and is worth in the region of 110 billion euros. French banks such as BNP Paribas, Credit Agricole, Credit Lyonnais and Credit Commercial de France are among the largest in the world. Call centres and telecommunication services in France are growing rapidly.
The French market share of the European call centre industry has been increasing significantly in recent years and currently around one-fifth of European call centres are located in France. The business information company Datamonitor, found that there were approximately 2,420 call centres in 2000, employing in the region of 50,000 people.
France has one of Europe's largest software and IT services markets. Syntec Informatique, the French association representing software and IT services sector states that in 2001 growth in this sector in France, together with that in Spain, was the best in Europe at around 13 per cent. Revenue from this sector in 2001 was 21.3 billion euros, double the amount for 1996. Leading companies in the industry include IBM Global Services, Cap Gemini, IBM Software France, Accenture France and Hewlett-Packard Services.
As one of the world's top tourist destinations France has a thriving tourist industry. Figures published by the World Tourism Organisation for 2001, show that France received in the region of 20 per cent of all visitors to Europe, with approximately 75.5 million people coming to the country from abroad.
Within the secondary sector the automotive industry is of considerable importance and, according to the development agency 'Invest in France', contributes 15 per cent to the country's total industrial turnover and directly employs over 150,000 people. In addition, the automotive suppliers sector employs almost the same amount again. According to figures published by the International Organization of Motor Vehicle Manufacturers (OICA), France is the second largest producer in Europe behind Germany, with in excess of 3.6 million vehicles produced in 2001.
The Country Commercial Guide, published by the US Department of Commerce in 2001, ranks the chemical industry in France fourth in the world, with sales in the region of 75.5 billion euros a year, and as the world's third largest exporter of chemicals and pharmaceuticals in 2000. The industry employs approximately 8 per cent of the industrial labour force and has the third largest turnover of all French industries.
The biotechnology industry in France is growing rapidly. The country has 250 biotechnology companies, four fifths of which have been created since 1990. France Biotech, the association responsible for the development of the industry, states that France is placed third in Europe in terms of biotechnology enterprise creation. The industry has an annual turnover of approximately 2 billion euros. Information published by the US Department of Commerce shows the French textile industry to be worth in the region of 37 billion euros a year. Nearly three quarters of which comes from apparel, 15 per cent from technical textiles and the rest from household textiles.
Despite the relatively low contribution of the agricultral sector to the national GDP, France is one of the world's largest producers of agricultural products, second only to the USA and is home to around a third of all the agricultural land within the EU.
Infrastructure:
France boasts a modern transportation system with one of the most dense yet least congested road networks in the world. All the principle consumer markets in Europe are accessible by road within 48 hours. In a report published at the end of 2001 by the UK Commission for Integrated Transport, France had fewer than one in twenty principle road links that had experienced delays lasting an hour or more. In contrast, nearly a quarter of UK roads, a fifth of Spanish roads and a tenth of Italian and German roads experienced delays of at least an hour.
The country's well developed network of airports received more than 800 million euros of investment during 2001. According to a report published by the Direction Generale de l'Aviation Civile, approximately 130 million passengers used French airports in 2001. This number was down by about 5 million on the previous year in keeping with the general downturn in air travel following the terrorist attacks on New York and Washington.
The French rail network is one of the most extensive in Europe and has more track length than both the UK and Germany. The TGV network, which operates trains at speeds reaching 220 miles an hour, will be linked to the Spanish rail network (Barcelona - Madrid) and to the German network (via the Paris-Strasbourg TGV) by 2005. Eventually, the Italian railway system will also be linked to the TGV network. The Channel Tunnel carries passengers between London and Paris in less than 3 hours.
Major French ports include Marseille, Le Havre, Dunkerque, Bordeaux and Saint Nazaire, jointly handling more than 300 million tons of cargo every year.
The country has state-of-the-art telecommunications facilities. According to the French telecommunications regulatory authority, the penetration rate of mobile phones increased from 1.3 per cent to 61.6 per cent from the end of 1994 to the end of 2001. Furthermore, during 2001 the number of mobile phone accounts exceeded the number fixed lines in the country, with a total of 37 million by the end of the year.
There has been more than a two-fold annual growth in internet traffic in France over the last three years and the French Association of Internet Access Providers (AFA) reported that by the end of 2001 there were 15.7 million internet users in France. Following, rapid growth in the market for high-speed internet connections, particularly ADSL, during 2001, high-speed subscribers now account for 10 per cent of all active internet subscriptions in France.
Workforce:
Figures published by the US Bureau of Labour Statistics indicate that, in 2000, France had a total workforce of approximately 26 million people. In addition, according to the US Department of Commerce, France has the largest temporary employment market in Europe with over 600,000 temporary employees registered in 2000. Unemployment in France has been steadily falling in recent years and in 2000 reached an 8-year low. OECD figures for the first half of 2002 put the unemployment level at just under 8.8 per cent.
The World Competitive Yearbook 2000 (WCY), shows that a high proportion of 17 to 34 year olds in France, some 14 per cent, enroll in Higher Education. For Spain the level is 13 per cent, for the Netherlands it is 11 per cent and for both the UK and Germany it is 9 per cent. The development agency 'Invest in France' states that 22 per cent of the French workforce holds a university degree. According to the WCY public expenditure on education totals approximately 6 per cent of the country's GDP, compared to 8.3 per cent in Denmark, 6.9 per cent in the Netherlands, 4.6 per cent in Germany and 4.4 per cent in the UK.
Labour regulations in France, in terms of factors such as minimum wages and hiring and firing practices, are among the least flexible in Europe. The WCY gives the country a score of 1.75 compared to 6.92 for Denmark, 6.04 for Ireland, 5.92 for the UK and 4.52 for the Netherlands, with higher scores pertaining to greater flexibility.
New Technologies:
France has a long history of high-tech research and development that is well supported by government. Several financial grants for Research and Development have been made available by the French government. These include the R&D tax credit, which can give companies a tax credit of 50 per cent on expenses incurred in one year over and above the expenses incurred during the previous two years. In addition to this, as part of the EU, France benefits from a number of programs designed to stimulate research and development. These include the Eureka and the Esprit programmes. The former is designed to develop R&D and corresponding training in any technology area, whilst the latter concentrates on establishing Europe wide standards and providing member countries with critical technologies in a wide variety of areas such as advanced microelectronics, software, industrial automation and advanced information/image processing.
According to the OECD's Main Science and Technology Indicators database, France's expenditure on research and development, as a percentage of GDP, is amongst the highest in the EU.
Business Costs:
The French telecommunications regulatory authority has reported that telecommunications costs have been decreasing considerably in recent years. Between 1996 and 2001, France Télécom's national call charges fell by approximately 60 per cent, while the average price of long-distance calls decreased by around 31 per cent. This has resulted in an overall reduction in phone bills, although this has been offset to a certain extent by increases in the France Télécom subscription charge. The cost of mobile phone call charges and subscription packages have also decreased in the last few years and internet connection charges fell by approximately 40 per cent from 1998 to 2002.
The government offers financial assistance for corporate training programs, which can vary from simply covering the direct cost of the program to contributing to the wages of any employees attending. Subsidies are also available to companies hiring individuals in certain categories such as the long-term unemployed.
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