Page last updated at 10:39 GMT, Monday, 8 February 2010

France rediscovers entrepreneurial spirit

By Hugh Schofield
BBC News, Paris

French commuters
France has been undergoing a renaissance in work-place ambitions

Asked to name the European country least favourable to small business creation, most people would probably not hesitate before saying France.

Tough labour laws, high taxes and a dominant state sector have all been a powerful deterrent to economic self-starters, with many choosing to relocate abroad.

But consider this: in 2009 the European country with the highest number of new businesses was none other than France.

A total of 580,193 enterprises were created over the course of the year, some 60% under a new government status called auto-entrepreneur.

Admittedly France still lags a long way behind Britain and Italy for the number of business units per head of population, but it is catching up fast.

In addition, a poll published last week on behalf of the Agency for Enterprise Creation (APCE) found that 47% of 19-29 year-olds envisage one day setting up their own business.

Business creation

Until recently, the life-goal of a clear majority of French youngsters was a nice, safe job as a fonctionnaire - or public employee.

So what has changed? Mentalities? The system? The economy?

What is happening is a major sociological change... Now people need, and want, to find their own ways to make a living
Jean-Claude Volot
APCE president

And is it a real change at all?

Or could the spurt in business creation be just a temporary aberration in a country still wedded to more collectivist ways?

One man who believes fervently that France has passed a watershed in its economic history is APCE president Jean-Claude Volot.

"What is happening is a major sociological change," he said. "We have had more than 60 years of a state-dominated culture which encouraged dependence.

"But now people need, and want, to find their own ways to make a living."

For Mr Volot, there is no objective reason why France should not once again be a byword for private enterprise.

"At the start of the last century France had more small businesses than the United Kingdom," he said.

"Is it a coincidence that that was also the last time France led the world in the arts, and in technological innovation and creativity?"

Online simplicity

France's interest in self-employment has been quickened by the highly successful auto-entrepreneur scheme, which came into effect in January 2009.

Herve Novelli, junior minister for trade, crafts, SMEs, tourism and services speaks during the opening session at the Salon des Entrepreneurs in Paris, 3 February 2010
Minister Herve Novelli said 2009 had seen a growth in French e-commerce

The beauty of the system is that it contradicts all the received wisdom about the awfulness of French bureaucracy.

Instead of taking months, a new business can be registered within minutes on the internet.

And instead of costly and complex dealings with tax and social security, the auto-entrepreneur simply files invoices online.

Above all, the auto-entrepreneur only pays charges to the state if he or she starts making profits. Gone are the days when a social security bill arriving out of the blue could knock a struggling enterprise into oblivion.

"The wonderful thing about the auto-entrepreneur scheme is that it removes a lot of the fear about setting up," said Marie Garaud, 26, who has created a press relations consultancy in Paris.

"If you are nervous about the world of business, it is an excellent first step - simple and quick.

"Like a lot of my friends, I think I am culturally on the left. But socialism has led us to a dead end. Young people want to be freer to do their own thing."

Go-it-alone

Last week at the Salon des Entrepreneurs in Paris - a kind of trade fair for start-ups - there were long queues at the auto-entrepreneur stand, as hopefuls waited for advice.

French president Nicolas Sarkozy
Nicolas Sarkozy has tried to scale down the state sector in France

But not everyone was starry-eyed about the brave new world of go-it-alone.

"Look - two words explain why small businesses are so popular today: unemployment and pay. The first is too high and the second is too low," said Christian Deloussure, who wants to set up a business consultancy.

"People can see reality around them. Jobs are harder to get, and the state sector is being scaled down under President Sarkozy. And at the same time, salaries are very poor in France.

"So people are responding intelligently to an incentive: they are looking after themselves. But it is out of necessity, not because they have suddenly become economic liberals."

The intriguing imponderable at the heart of it all is whether people create systems, or systems create people.

The French used to be great entrepreneurs - they gave us the word, after all - but somewhere over the last century they lost the knack.

Today - as conditions require a return to self-reliance - many seem to be rediscovering their esprit d'entreprise.



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