The definition of ‘economic climate’ is the general state of the regional, national, or global economy. When people use the term ‘economic climate,’ they tend to refer to current economic conditions. According to the 2019 Index of Economic Freedom, France has a population of about 6.8 billion, GDP of $2.8 trillion, unemployment rate of 9.8%, inflation rate of 1.2% and a FDI inflow of $49.8 billion. France has more of a diversified economy that is mainly comprised of pharmaceuticals, tourism and manufacturing. France actively views itself as one of the top countries in European Union with a very modern economy. Their President, Emmanuel Macron, is in fact the youngest president since the Fifth Republic was established. France has had much post-war economic growth that can most evidently be seen in their rise of living standards. As stated by the Encyclopedia Britannica, half of France’s families own their own home. Additionally, this economic growth is reflected in a reduction of workweek hours to approximately 35 and an increase of days taken for vacation. However, France has relatively high value added tax rate than any other European countries.
While France is primarily known for their wine and cheese affiliations, they do have a significant presence of other markets in their industry. Leading the chart of the top companies in France, is insurance company, AXA Group. They have a net asset worth of €887.07 billion according to Marketing 91 and are located in places other than France such as the Middle East, North America, Western Europe, Britain, and the Asia Pacific. Coming down at number two, we have Total S.A, a predominantly oil and gas based company. They were founded in 1924 and currently have a net asset worth of 230.9 billion U.S dollars as stated in articles by Marketing 91. This company has actually won total acclaim in the chemical and petroleum product industry. The third industry on the list that needs to be mentioned, is the banking group of BNP (Banque Nationale de Paris). They have a retail banking network that serves more than 30 billion customers in Luxembourg, Belgium, Italy, and France. Its presence in four crucial domestic markets has helped it earn its title of being one of the most prestigious banks in the world.
Jobs that are currently highest in demand vary from region to region throughout France. However, TheLocal, an English version of French news, discusses a study that was done in 2018 which found the jobs with the highest rate of requirement anong France’s 13 regions. In the eastern French region of Grand Est, with a population of 5.5 million people, the main recruiting sectors in the region are maintenance technician, after-sales service, mechanic and customer advisor. Moreover, in the Paris region of Ile-de-France, with a population of approximately 12 million, the jobs that saw the highest level of recruitment consisted of pre-school assistants, teachers and administrative assistants. Additionally, in the Pays de la Loire region , the top 3 categories of job recruitment were after-sales maintenance technicians, mechanics and production officers.
As stated in the Economic Complexity Index (ECI) , France ranks at number 14 with the most intricate economy and the 6th largest export economy in the world. According to the OEC, In 2017, France exported $516B and imported $595B, resulting in a negative trade balance of $78.6B. In 2017 the GDP of France was $2.58T and its GDP per capita was $42.9k. The top exports of France are spacecrafts, planes, packaged medicine, planes, and of course, wine. Its top imports are refined and crude petroleum, cars, and aircraft parts. The top export destinations of France are Germany, Italy, Spain, the U.S and Belgium. The top import origins consist of Germany, China, Belgium and Spain. These statistics were provided by the Observatory of Economic Complexity.
The current political climate in France has been greatly influenced by President Emmanuel Macron as he launched a reform program aiming at addressing France’s structural challenges. With this reform, he also strived to increase their economy’s capacity to recover quickly from problems. As highlighted by the Santander Trade Portal, Macron’s new reforms were met with huge amounts of protests that built up much support after the arrival of the yellow vest movement in 2018. This is a populist, grassroots political movement for economic justice that is usually run in a leaderless fashion. Their demands vary from improved standard of living to the resignation of President Macron. Unfortunately, this tense political climate has proved to be troublesome when doing business because often times, these protest manifest into dangerous riots and cause irreversible infrastructure damage and terrible loss of human life. To try and fix his decreasing popularity rating, Macron has tried raising minimum wage and implemented reforms to cut certain taxes.
The UK Trade & Investment and the Foreign & Commonwealth Office created a report that looks at potential risks for businesses operating in France. In terms of human rights and gender equality, France in similar to the U.S in that it adopts a more modern economic approach. France is a founding member of the Council of Europe and subject to the jurisdiction of the European Court of Human Rights. While bribery is completely illegal, France ranked 21st out of 180 countries (U.S comes right after france at number 22) in bribery and corruption According to Transparency International’s Corruption Perceptions Index. Moreover, while there are government policies enlisted to combating threats, it is important to keep in mind when doing business in France, that terrorists are very likely to try to carry out attacks there. Due to ongoing threats to France by Islamist terrorist groups, and recent French military intervention against Daesh, “the French government has warned the public to be especially vigilant and has reinforced its security measures’’. (Gov.UK) Moreover, IP rights are territorial, which means they only give protection in the countries where they are granted or registered. There is not one specific European patent because a European patent is more like a group of individual national patents. Therefore, is is suggested by the Institut Nationale de Propriete Industrielle, to register your IP rights in your export markets. There are many things to take into account when conducting business in France or any other country, it is always important to remain ethical and be aware of all the policies governing the country.
The business culture in France varies from that of the U.S in a few different ways. Primarily, when conducting business in France, it is customary for them to arrive later than the agreed upon time. This may be troublesome for the U.S because we carry the concept that “time is money”. However, it is very common for this to happen during business meetings and it is also customary to meet quite a few times with a company before signing a deal. The French like to get to know the person they’re doing business with, therefore it is crucial to make an effort to create a good rapport between parties. Additionally, it is important for the U.S to accept any invitation for lunch or dinner made by the French party. A tip that can be of good use for the U.S, is to never bring the topic of business up until after the meal, when the coffee is being ordered. It is better to focus on points of French pride for conversation. Some of these points include, architecture, history, cuisine, wine and music. All information regarding France and international protocol can be found in an amazing book called, “Kiss, bow, or Shake Hands”, by Terri Morrison and Wayne A. Conaway. Like many other countries, France is subject to their cultures and guidelines, so it is important for us to be considerate and respectful when engaging in business deals with them.
Karen is an International Business major with an emphasis in French and Western Europe who is studying abroad at ESSEC Business School in Cergy, France for Fall 2019.
International Business Experience 