France, a lucky nation poised on the brink of sustained prosperity

We veer between inferiority (their trains, food and style) and superiority (our airlines, food and style)

HOSTING THE World Cup is a great way of getting noticed so, of course, for the past few weeks, France has found itself under the microscope.

Britons always find it hard to come to terms with our neighbour, for she always seems to present two, very different, faces. We have seen this clash between the two realities again and again: the grand, beautifully organised stadiums and the hopeless ticketing arrangements; or the excellent electronic transmission facilities and the Air France strike.

We veer between admiration and irritation, between a sense of inferiority (their trains, their food, their style) and superiority (our airlines, our food, our style). How else could you explain the fact that we have elevated London past Paris to the status of restaurant capital of the world except as a mixture of our insecurity and our cockiness?

Over the past five years the cockiness has been more in evidence, for two solid economic reasons. One is cyclical: our economy has grown faster than the French, which has only really improved into a solid recovery this year.

The other is structural: we have made a number of painful changes to our economy over the past 20 years which France is just starting to make. Together these have helped not only to cut our unemployment to half the French level, but also to push the pound back up to 10 francs. Whether it is eating at a posh Paris restaurant or rioting in Marseilles, we can afford it. Economic success is not the only component of cultural self- confidence, but it helps a lot.

But do not expect this to last. The economic pendulum will swing back. In fact yesterday's news on rising unemployment in the UK shows that the pendulum is swinging now. France will again start to enjoy faster growth than Britain, possibly even this year. And eventually France, too, will make the structural changes it needs to make. One small example: by facing down that Air France pilots' strike the Prime Minister, Lionel Jospin, may have managed to do from the left what his predecessor failed to achieve from the right: start to reinsert some discipline into French labour practice.

If you stand back and look at France's international comparative position, there are great strengths that will serve it well. There are also three serious problems, of which more in a moment; first focus on those strengths.

It is very clear that the world economy will shift further to services during the next couple of decades, and that what remains of manufacturing in Europe will rely on high technology, productivity and craft skills to survive. Well, France is a larger exporter of services than the UK: its strength is more than anything else in tourism, while the UK's is in financial services. But maybe tourism will grow even faster over the next couple of decades than finance.

Look at manufacturing, and the areas likely to prosper are precisely those in which France has comparative advantage: high tech, high productivity (currently still higher than the UK), and high craft.

These are deep strengths, embedded in the culture of the country. By contrast, many of the weaknesses can be fixed, given the political will. One of the main reasons why unemployment is so high in France is misplaced job protection legislation. It is expensive to get rid of people. Insiders, men with secure jobs, do well; outsiders, the young, the poorly educated, women, immigrants, tend to do badly.

France's rigid labour market, unlike Britain's of the 1970s, is not principally the product of excessive union power, though it sometimes seems so. It is the product of poorly crafted laws, something that is easier to fix. As it happens, some of the present government's policies, such as limiting the working week to 35 hours, take things in the wrong direction. But on a 20-year view this does not matter. At some stage these policies will be reversed, because they have to be.

There has been a problem of political leadership in France, winning popular support for unpopular measures. It is possible that it will be easier for the left to gain such support than the right. The left has continued the budgetary cuts needed to meet the Maastricht targets; it could continue the market reforms too, albeit at a slower pace.

In any case the single currency will act as a discipline on the whole of continental Europe, forcing convergence of good practice in industry and commerce just as Maastricht has forced convergence in government. When it does, the underlying strengths will come into play.

So what can go wrong? There are a couple of real concerns, which will dog France over the next 20 years. One is that reform will take place in a discontinuous way. It is tough to go through any period of big social and economic change unless you can buffer that change by compensating the losers. If people are going to lose their jobs you need to make sure that they have secure pensions. Given the ageing population there will not be a lot of spare resources available to compensate those who lose out. The French may therefore go through one of the sudden, searing, political changes that take place there every couple of generations.

The other concern is economic. France has a problem with French. Or rather it has a problem with English. There has been a rise in the importance of English in the world economy. This is partly a function of the increased importance of the entertainment industries in world trade. These account for about 7 per cent of US exports, the country which dominates the market. It even dominates the French league. I looked at the list of top films in the French box office a few weeks back and all but one of the top five was American. A generation ago British students were brought up on French films; now even the French don't seem to want them.

But it is not just entertainment: English is enormously important in the adoption of information technology, the fastest-growing single area of growth in the economies of developed countries. The US leads the way, but other countries which score high in investment in information technology are the UK, the Scandinavian countries and the Netherlands - all countries which either speak English as a first language of are very proficient in it. Investment in information technology is much lower in France, Italy and Spain. Internet use is surprisingly low in France despite the fact that the technology is theoretically language-neutral.

To crank more productivity out of service industries particularly requires investment in information technology. The problem is not evident now, but 10 years down the line countries that have not embraced the new technologies will find themselves at a serious competitive disadvantage.

The balance sheet for France is still positive. Its underlying strengths will become more significant in the new service-oriented world. It is a lucky country in a tantalising position. The prize of sustained prosperity through the next two decades is there to be grasped, but the country needs to reach out and grasp it. The gap in economics between relative success and relative failure is such a narrow one, as we know in Britain. I suppose that applies in football, too.

Arts and Entertainment
Call The Midwife: Miranda Hart as Chummy

tv Review: Miranda Hart and co deliver the festive goods

Arts and Entertainment
The cast of Downton Abbey in the 2014 Christmas special

tvReview: Older generation get hot under the collar this Christmas

Arts and Entertainment
Dapper Laughs found success through the video app Vine

comedy Erm...he seems to be back

Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)

tvReview: No ho-ho-hos with Nick Frost's badass Santa

Arts and Entertainment
Bruce Forsyth and Tess Daly flanking 'Strictly' winners Flavia Cacace and Louis Smith

tv Gymnast Louis Smith triumphed in the Christmas special

PROMOTED VIDEO
Arts and Entertainment
Rhys says: 'I'm not playing it for laughs, but I have learnt that if you fall over on stage, people can enjoy that as much as an amazing guitar solo'
musicGruff Rhys on his rock odyssey, and the trouble with independence
Arts and Entertainment
Krysia and Daniel (Hand out press photograph provided by Sally Richardson)
How do today's composers answer the challenge of the classical giant?
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
News
Shenaz Treasurywala
film
News
tv
Arts and Entertainment
Jason Watkins as Christopher Jefferies
tv
Arts and Entertainment
Star Wars Director JJ Abrams: key character's names have been revealed
film
Arts and Entertainment
Pharrell Williams won two BBC Music Awards for Best Song and International Artist
music
Arts and Entertainment
Mark, Katie and Sanjay in The Apprentice boardroom
TV
Arts and Entertainment

Film The critics but sneer but these unfashionable festive films are our favourites

Arts and Entertainment
Frances O'Connor and James Nesbitt in 'The Missing'

TV We're so close to knowing what happened to Oliver Hughes, but a last-minute bluff crushes expectations

Arts and Entertainment
Joey Essex will be hitting the slopes for series two of The Jump

TV

Who is taking the plunge?
Arts and Entertainment
Katy Perry as an Ancient Egyptian princess in her latest music video for 'Dark Horse'

music
Arts and Entertainment
Dame Judi Dench, as M in Skyfall

film
Arts and Entertainment
Morrissey, 1988

TV
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

    Aren’t you glad you didn’t say that?

    The worst wince-and-look-away quotes of the year
    Hollande's vanity project is on a high-speed track to the middle of nowhere

    Vanity project on a high-speed track to nowhere

    France’s TGV network has become mired in controversy
    Sports Quiz of the Year

    Sports Quiz of the Year

    So, how closely were you paying attention during 2014?
    Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

    Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

    From Armstrong and Miller to Pointless
    Sanchez helps Gunners hold on after Giroud's moment of madness

    Sanchez helps Gunners hold on

    Olivier Giroud's moment of madness nearly costs them
    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect