Silicon and the State: French Innovation Policy in the Internet Age

In the early 1990s, French officials viewed with some concern the emerging and innovative high-technology sectors of the U.S. and British marketplace. Fearful of falling too far behind, the French government implemented a vast array of policies—from tax incentives for investing in risky high-tech start-ups to new standards for electronic signatures—designed to promote the commercialization of new economy technologies in France. The efforts have turned French innovation policy on its head. Traditional government and bank-financed research and development were replaced by private venture capital. Professionals in France's technical elite—long accustomed to a secure career track in prestigious laboratories and industrial conglomerates—began moving into risky entrepreneurial ventures. New technologies, once developed exclusively by France's national champions of the marketplace, such as Ariane, Airbus, and Renault, began to be commercialized by technology start-ups. Efforts to promote the new economy, however, have proved politically and socially contentious. Many French policymakers and public intellectuals fear that regulatory liberalization might threaten or undermine state sovereignty. Gunnar Trumbull investigates France's experience in adapting to the requirements of innovation in the new information and communications technology (ICT) sectors by focusing on events over a six-year period, from 1996 to 2002. This short stretch of time proved a crucible for French leaders and businesspeople: it saw dramatic efforts at regulatory reform; a boom in technology start-ups, venture capital, and initial public offerings; the spread of the Internet; and then a collapse in the Internet market, accompanied by a broader economic decline. The new challenges of the ICT revolution were confronted, and new policies and practices were tested and stressed. The author describes France's new technology policy as both boldly new and familiarly French. He commends the French