Liberty, equality, technology: France is finally poised to become a tech power

Once America had an unassailable advantage, an economic flywheel that spun off innovation and Fortune 500 companies like a perpetual-motion machine. Bring in the best, brightest, and most driven from around the world; educate them or their children at its universities; then watch them start companies, succeed wildly, give back to their alma maters, and recruit new talent as the virtuous cycle began again.

It hardly mattered whether these immigrants came in as students (think Satya Nadella, Sundar Pichai, and Steve Jobs’ father Abdul Fattah Jandali) or with their families (Sergey Brin and Jerry Yang) or as refugees (eg Alexis Ohanian’s father’s family) or as undocumented immigrants (eg Ohanian’s mother.) Meanwhile, the UK, thanks to its Commonwealth connections and universities like Oxbridge and Imperial College, did much the same on a smaller scale. It was a self-sustaining wealth-generation and nation-strengthening machine of gigantic proportions, and it would take colossal idiocy to want to interfere with it.

Enter Brexit. Enter Donald Trump. Enter their implicit and explicit rejections of immigration, including serious barriers to and discouragement of legal and skilled immigration, such as H-1B visa holders and international students — along with the general sense of “you’re not welcome here” that they’re clearly doing their damnedest to convey.

Meanwhile, across the Atlantic, that other great immigrant nation, France, has been working overtime for the last four years to open both its economy and its borders to tech startups. I was skeptical of these efforts a couple of years ago, but two days ago I sat down with former Cisco CEO John Chambers and Accel partner Joe Schoendorf to talk tech in France, and they’ve convinced me that under President Macron, “everything has changed.”

It’s not just that Macron’s reforms have made it far easier to hire and fire in France, making labor costs far more understandable and predictable — although this is a huge deal and a major sea-change. It’s not just that France is offering easy-to-access French Tech visas to founders, employees, and investors alike, so that it’s never been easier for techies to live and work in France — which, as a former Paris resident myself, I can tell you is pretty great.

It’s not just access to a sizable pool of relatively inexpensive engineers. It’s not just openness across academia as well as the private sector (41% of France’s 75,000 Ph.D students are not French.) It’s not just Paris beginning to surpass London in investor interest generally, not just in technology.

It’s also the transformation of the French population as well as the government. 50% of French youth aged 18-24, and 70% of students at the École Polytechnique, France’s flagship technical university, want to go work for startups rather than enterprises — and their ambitions are now European and/or global, not merely French. There’s strength in depth there, too; Chambers compares the raw engineering talent at the Polytechnique to that at Stanford, and France is one Fields Medal away from overtaking the USA in total numbers won.

I can aver that all this is a massive change from when I lived in France a decade ago. Schoendorf says he can think of only one comparable example of a major developed democracy changing so much, in such a short time, as France over the last four years: the UK under Thatcher. Regardless of whether you lionize or demonize Thatcher, that gives you an idea of the scale of the transformation. (And it’s nationwide: 75% of France’s members of parliament are new, and there are twice as many women as ever before.)

I don’t want to pretend that Silicon Valley is at risk of being supplanted by the Île-de-France. The Valley is and will remain the sun at the center of tech’s solar system. But France has now graduated from “asteroid” to “planet,” and is well on its way to “gas giant.” Not least because of its spectacular timing: inviting immigrants just as the US and UK are in the midst of the spectacularly stupid process of dissuading them, and just as the Valley has gotten so expensive, courtesy of NIMBY housing paralysis, that leaders there are looking for any way to diversify to other locales.

All this is beginning to have a measurable effect. There were 274 French companies at the latest CES, up from 13 less than a decade ago. There were more than 700 VC investments in French tech companies last year, which rivals the UK, and more than 50 had American VC involvement. Also, I don’t want to put too much weight on anecdotal data, but two serious, impressive tech people I know have, independently, moved from America to Paris in the last few months.

My chief complaint two years ago was that the French government wanted startups to make their big enterprises better and more competitive, rather than wanting startups to become their big enterprises. That has changed. As Schoendorf says, “Macron sees the world’s five most valuable companies, all tech companies on the West Coast of America, and thinks: we need one of those.” Pascal Cagni, chairman of Business France, has a more accessible intermediary goal: a French “NATU”, meaning Netflix / AirBNB / Tesla / Uber.

And he’s right. France’s transformation into Europe’s primary technology power is real and ongoing, among all of government, academia, big business, and startups; but what they really need is a big hit and a cohort of successful entrepreneurs, a French equivalent of what the PayPal Mafia became. (Xavier Niel is having an enormous effect — see Ecole 42 and Station F, “the world’s largest startup facility” in southeast Paris — but he can’t do it alone.) If and when that happens, though, France will lead Europe for the foreseeable future … and help lead the globe, too.