The Invest in France Agency (AFII) has recently published a report in Franceon Foreign Direct Investments (FDI) which reveals that foreign investors have much more confidence in France?s economic potential than French actors have themselves!
With FDI amounting to 40 billion euros in 2005, France ranks as the fourth most attractive country for foreign investments, behind Great Britain – which enjoyed an exceptional score thanks to an important merger in the energy sector (Shell) – China and the United States. Since 2002, France has positioned itself around the third rank after the United States and China. According to the AFII, completed inward investment projects in France have increased by 12.4 % over 2004 with a record 664 projects creating or safeguarding 33,296 jobs.
As in previous years, the most important sources for investment in France were Western Europe (58.6% of jobs created) and North America (30.6%). The United States remains the most important country, ahead of Germany. Asian investments are still modest, representing 7.7% of jobs created in 2005 against 9.2% the previous year. Japan was still the most important Asian investors, responsible for the creation of 1,500 jobs (4.8%), while China retained its second place with 2 % of jobs created.
Regarding FDI’s sectoral distribution, it clearly appears that the structure of inward investment in France has gradually changed, reflecting the influence of two long-term developments, which are, the growing importance of the tertiary sector and a substantial growth in high-tech industries. The five most important areas of investment where:
o Software and IT services,
o Vehicles manufacturing and equipment,
o Commercial and financial services,
o Transport, storage and construction,
o Engineering, IT and medical technology.
Amongst the greatest investments that occurred in 2004, we can cite: Microsoft, joining forces with INRIA (the National Institute for Research in Computer science and Control) in order to establish a new research laboratory, Coca-Cola?s new European headquarters, LG Electronics? mobile telephony head research unit and Monster who chose Marseille for its European QG web.
The reasons for such settlings in France are notably:
o Efficient public infrastructures (transports, research centres, health care, etc.),
o Availability of a high qualified labour force,
o High productivity (number 1 worldwide for its hourly productivity),
o The recent reduction of fiscal pressure on companies and expat workers,
o A constructive dialogue between companies? executives and France’s representatives (national and local).
At last, the new programme supporting competitiveness clusters seems to have created an interest for French companies as well as for foreign ones.
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