Foreign Investments in France: a new record set in 2018 [fr]
Business France published on 4th April its “2018 Annual Report: Foreign investment in France”.
A total of 1,323 investment decisions were made in France in 2018 – up 2% on 2017 (1,298), at an average of 25 decisions per week. For example Dathena, an innovative Singaporean startup specializing in big data and data governance, rapidly expanding internationally has decided to open an R&D center in the field of artificial intelligence in Paris (Ile de France / Paris region), creating around twenty jobs.
Jobs created and maintained amounted to 30,302 in 2018, compared with 33,489 in 2017. This is due to the reduction in the number of jobs saved as part of an acquisition (- 4,000 jobs) resulting from the decline in the number of ailing businesses (-25%). Among those jobs, 6,000 people are employed by around 200 companies controlled by an investor from ASEAN member countries or New Zealand operating in France. For instance, the Singaporean firm CapitalLand Limited (Citadines) provides jobs for 600 to 700 persons in France. Moreover, eleven investments from Singapore, Thailand, Vietnam and New Zealand were confirmed in France in 2018, creating or maintaining 165 jobs.
However, investments at new sites increased by 14% in 2018, with 741 new decisions , compared with 651 in 2017, thus representing more than half of all investments (56%). This increase in investment in new sites reflects the strengthening of France’s attractiveness.
There were 500 investments involving expanding operations at existing locations, creating 15,588 jobs (i.e. 50% of all jobs created by foreign investments) in 2018, compared with 551 projects and 12,855 jobs in 2017. What’s more, 78% of production/manufacturing activities related to expanding operations at existing locations.
Foreign companies continue to invest in production/manufacturing operations, with 320 investment decisions creating or maintaining 11,295 jobs in 2018. Production/manufacturing operations were the leading contributors to employment, accounting for 37% of total employment and a quarter of all investments. However, in ASEAN, investments were made primarily in the energy sectors (two projects; 68 jobs), hospitality and tourism (two projects; 39 jobs) and software/IT services (two projects; 30 jobs), while projects were mostly located in Ile de France (Paris region) (five projects) and Occitanie (three projects).
“The improvement in France’s image is reflected in significant investments in industrial activities. Examples of foreign multinationals which are present in French industry include Collins Aerospace, US world leader in technology systems and solutions for the aerospace industry, which invested more than €18 million in the Occitanie region in 2018; Canadian company Robotiq, which designs and manufactures components for collaborative robots (robotic hands) and chose Lyon for its first site in Europe; and Japanese food group Takara Foods, which announced plans to invest €1.6 million in a ramen manufacturing facility” said Christophe Lecourtier.
Investment decisions in R&D, engineering and design are constantly growing, up 3% year – on – year, accounting for 129 projects and 2, 793 jobs in 2018, compared with 2, 282 in 2017. Interestingly, R&D investments accounted for58% of the total number of new sites. American companies stand out for their involvement in R&D operations, accounting for more than a quarter of the decisions recorded and 21% of employment associated with this sector. In the case of ASEAN, there are five projects and 51 jobs R&D activities in 2018 but also investments mainly involved decision-making centers with five projects; 104 jobs.
“France has shown that, on a global scale, it is punching above its weight in terms of innovation. R&D operations have grown year – on – year by more than 9% on average over the last five years, and now represent 10% of all investments. Furthermore, every year global tech giants such as Cisco, Google, and Facebook continue to strengthen their Position in France” said Pascal Cagni.
European investments remain predominant: 61% of foreign job – creating investments in France in 2018 came from Europe, compared with 58% in 2017. The main investor countries in 2018 were the United States, which accounted for 18% of investments (same level as 2017), followed by Germany (14%), and the United Kingdom (9%).
The strongest growth was seen in 2018: the United Kingdom increased its total investment by 33%, in vesting in the consulting / engineering, software and IT services, and financial sectors; while Switzerland’s investments rose by 22%, driven by a 57% increase in investment decisions in production/manufacturing activities.
The diversity of France’s regions and cities continues to drive their attractiveness to investors. Ile de France / Paris region, Auvergne – Rhône – Alpes, Hauts de France, Nouvelle Aquitaine, Occitanie and Grand Est were home to three – quarters of investment decisions in 2018.
Nevertheless, investment decisions are not concentrated in major cities, and indeed 40% of them are to be found in towns with fewer than 200,000 inhabitants.
“The support from the teams at Business France, working in conjunction with our regional partners, helped secure more than two - thirds of all investment projects attracted to France in 2018” said Christophe Lecourtier.
It promotes France’s companies, business image and nationwide attractiveness as an investment location, and also runs the VIE international internship program. Business France has 1,500 personnel, both in France and in 64 countries throughout the world, who work with a network of public – and private – sector partners.
Since January 2019, as part of the reform of the state support system for exports, Business France has given public partners responsibility for supporting French SMEs and mid-size companies in the following markets: Belgium, Hungary, Morocco, Norway, the Philippines and Singapore.