The Startup Nation: Macron's vision and the rise of IoT in France

In April 2017, the newly-in-office President Emmanuel Macron declared his ambition for France to become a "startup nation" and a country that "thinks and moves like a startup".

This vision aimed to transform France's entrepreneurial landscape, fostering innovation, attracting talent, and positioning the nation as a leader in emerging technologies.

Macron's commitment to a startup-friendly France was underscored by several strategic initiatives, and an acknowledgement that there was more to achieving a ‘startup friendly’ environment than merely upping the financial backing for companies.

There was, of course, financial thrust behind the vision.

• Bpifrance, the public investment bank, invested over €7.2 billion into the startup ecosystem, supporting ventures through accelerator programs, subsidies, and equity investments.
• The France 2030 Plan saw €500 million allocated to support startups emerging from universities, aiming to translate scientific discoveries into marketable innovations.
• The “Choose France Summit”, launched in 2018, invited international businesses to invest in France. The 2023 edition brought an investment of 13 billion euros from an array of companies wanting to do business in France.

But this was coupled with regulatory and tax reforms with the stated aim of enhancing competitiveness and attract further investment, and cultural shifts with programs such as La French Tech set up to encourage greater collaboration among entrepreneurs, researchers, and established firms.

In the heart of Paris, Station F was created as a business incubator and the world's ‘largest’ startup campus. It is estimated that during between 2017 and 2022, its companies raised more than €8 billion and directly created almost 50,000 jobs.

A nation-wide ambition

The objectives behind this ambitious vision were perhaps better framed as sparking evolution rather than revolution. Before Macron’s labelling of the “startup nation”, there were rich seams of innovation throughout the country.

Notably, the IoT Valley in Toulouse was established in 2011. It houses over 40 startups and partner companies, providing resources like accelerators and training programs to foster growth. One such success story is Sigfox. Founded in Toulouse, Sigfox developed a global low-power wide-area network for IoT devices and has become a leading light in France’s blossoming IoT sector.

The ‘startup nation’ was a plan to build upon these pockets of success and supercharge innovation on a national level. It would provide linked-up thinking, greater clarity around opportunities, and an overarching narrative to encourage even greater innovation and financing of new ideas.

There have been significant obstacles that have impeded the realization of Macron's vision.

First, the long shadow of the Covid-19 pandemic and a global cost-of-living crisis have significantly shifted the economic landscape.

There have also been concerns around a skills gap, with the rapid evolution of technologies outpacing the development of a workforce with the specific skills for the implementation of advanced solutions, and worries about a lack of integration for French companies within the EU Digital Market and challenges in scaling startups beyond national borders.

However, it is clear that significant progress has been made.

France is now ranked as the third biggest startup hub in Europe (after the United Kingdom and Germany) and, as of early 2024, there were 28 ‘unicorns’ in France (startups that have reached a value of over $1 billion). In 2016, the country only had a single unicorn.

But on a micro-scale, the change has been felt by business owners. Investment in the startup ecosystem and infrastructure has fostered excitement and dynamism among innovative companies, and, to an extent, a shift in culture.

Olympe Mougin, IoT Market Manager for Saft, explained “It is definitely something that we are aware of. We are continuing to diversify both our business strategy and sales approach to accommodate better the enterprise of startup businesses. That means thinking differently about how we provide the support they need, and understanding that they operate in a different way to long-established businesses. Our role is to help them succeed and to lend our know-how to them at whatever stage of the journey they are on.”

Looking ahead

The start-up nation is preparing for the end of the Macron era, with his presidency set to come to an end in 2027.

The impact of a change in leadership on the nation’s hyperfocus on innovation remains to be seen. Long-term investment in innovation and entrepreneurship is in some doubt, with a changing political climate and the likely change in priorities brought about by a new government. France’s national debt has hit 110% of GDP and there are persistent questions over how much the government should be involved in providing funds to startups.

There are other challenges ahead. For some organizations in the IoT and data space, the EU's stringent AI regulations (set to take effect in 2026) have raised some concerns about the potential stifling of innovation.

But the ultimate success of Macron’s vision may well be felt in the cultural shift that comes with a more entrepreneurial approach to industry, something that is harder to quantify and something that requires a strong nurturing and strong ecosystem in which to thrive.

The high-risk nature of startups (and consequential high-failure rate) means they need continued support, not just in funding but in further strengthening ties between startups, established firms, and research institutions to facilitate knowledge exchange and accelerate development. While government support is vital and helpful, it is incumbent upon the larger organizations that rely on a thriving ecosystem of innovation to actively support it.

As we discussed at our recent IoT Innovation Day in Paris, the challenges that individual startups face are often similar. Sharing those experiences (and solutions to them) is vital to the long-term success of an interconnected industry – particularly if the scale of centralized support is lessened in years to come.