On 7 May, Emmanuel Macron claimed a decisive victory over Marine Le Pen in the French presidential election. This news provides welcome relief for globalists and fellow EU supporters in a political landscape which until now has been dominated by rising populism and profound uncertainty.
For entrepreneurs across Europe, Macron’s presidency is the sign of a new pro-business era. France is currently home to the second largest venture capital market in Europe, behind only the UK, and favourable changes to the business environment could heighten cross-channel competition and see this order inverse.
Data collected by the French Private Equity Association shows that its members invested €5.5bn (£4.7bn) in the first half of 2016, up a staggering 47 per cent from the same period a year earlier. We are optimistic that Mr Macron’s arrival will support and sustain the pace of these investments across Europe.
The first quarter of this year was the European technology sector’s second-best in terms of number of mergers and acquisitions since 2013, with France leading by deal volume. With such positive industry momentum, it begs the question: Will a Macron presidency really make that much of a difference to French tech?
We believe Macron’s presidency could be a pivotal moment in Europe’s ability to challenge the dominance of Silicon Valley. President-elect Macron has publicly stated that fostering innovation and disruption will be key to raising France’s growth potential and fighting unemployment, with his previous actions as a minister for the Economy, Industry and Digital Affairs supporting this ambition for French tech.
In 2015, Macron was the driving force behind the French tech movement, pioneering the creation of free limited partnership companies with laws around “Growth and Activity” established that August – the so-called “Macron law”. The Macron Law sought to remove layers of red tape that handicapped and frustrated so many sectors of the French business community.
More recently, in 2016, he was the architect of many pro-market reforms, driving initiatives such as the Labour Laws, aimed at boosting labour market mobility.
We expect these reforms to be pushed forward by not only a pro-business President but also a ministry composed of new representatives from the business community as well as experienced politicians. Unlike previous presidents, Macron is a former businessman not a just a politician and we expect this bias to be reflected in his choice of ministers and policy priorities.
France’s entrepreneurs expect Macron to build on these pro-market reforms. They are anticipating reductions in regulatory and compliance costs, as well as the introduction of a simpler corporate tax regime.
Looking beyond France, businesses see the opportunity to strengthen France’s position as a leading source of innovation and economic power within the EU, whilst bringing a softer pro-market approach to European regulation. Although we are optimistic about the opportunity for economic reforms, it is important to remember that Macron could struggle to form the parliamentary majority necessary for implementation and these changes could take some time.
France has recently taken several major steps to cement its status as a hotbed of entrepreneurial talent and activity.
In April 2017, the government, in cooperation with telecoms entrepreneur Xavier Niel, backed the creation of Paris’s Station F, an ambitious project billed as the world's largest incubator. This startup campus, set to be the Parisian Silicon Valley, can hold up to 1,000 international start-ups across 34,000 square metres of office space.
Station F is emblematic of the larger cultural shift taking place in France, a move to encourage entrepreneurship and provide innovative business leaders with the resources and training necessary to build global businesses. A move we hope Macron will continue to support.
Macron now has a chance to emerge as an influential political leader but also a powerful proponent of innovation for all of Europe. Macron’s reputation in the US is strong, garnering extensive support from the French expatriate population.
In New York, Chicago and Boston he harvested over 92 per cent of votes from French residents in the US, and Obama’s public endorsement can only serve to strengthen his appeal. He has the potential to change the global perception of the European tech industry, challenging the public assumption that it could never compare to start-up environments elsewhere in the US or UK. Within Europe, Macron can show the rest of the EU how a pro-business and global-minded policy agenda has the ability to transform a country’s economy.
Entrepreneurs already face enough challenges when it comes to building and growing a business. But by electing Macron, the French are opening their doors to new and innovative ideas whilst continuing to be part of the broader global community.
We see increasing numbers of serial entrepreneurs and innovation becoming less local and more global in spirit. It’s only a matter of time before these ideas and this optimism helps France and Europe to challenge Silicon Valley’s mantle as the world’s home of innovation.
Christophe Bavière is chief executive officer of Idinvest, an investor in European small and medium-sized companies
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