The annual RIO Country Report offers an analysis of the R&I system in France, including relevant policies and funding, with particular focus on topics critical for EU policies. The report identifies the main challenges of the French research and innovation system and assesses the policy response.
France presents a wide range of policy instruments and public organizations to foster innovation. The Crédit Impôt Recherche, the R&D tax credit, the Young innovative company scheme, the Investments for the Future Programme or the newly created public investment bank BPIFrance (as of November 2013) are the most well-known examples of a multiplicity of policy initiatives designed to support investment in RDI. These instruments have yielded mixed results so far: France shows a relatively low level of knowledge-intensive services export (15th position in the Innovation Union Scoreboard 2015) and of SMEs introducing product or process innovations (17th position), highlighting limitations in its innovation capacity. Also, the R&D intensity of the manufacturing industry (i.e. the ratio of R&D expenditure to value added) is of 8 % and the French manufacturing firms were 20 % less likely to engage in product or process innovation than their German counterparts in 2012.
This mismatch between the number of policy instruments to support research and innovation and their actual outputs has raised a number of critics in the last few years. Among them, the fragmentation and overlap of these support measures are often pointed out as well as their excessive complexity and insufficient gear towards quality and efficiency. The French R&D tax credit system is in particular under scrutiny for its high budgetary cost (around 0.26% GDP) and its limited effectiveness. Taking steps to simplify and improve the efficiency of innovation policy is widely considered as necessary.
While no evaluation of the complete portfolio of policy instruments in support of research and innovation has been provided as requested repeatedly in the Council recommendations (2015, 2014), the recent creation of the National Commission for the Evaluation of Innovation Policies represents an important step for the identification of systemic weaknesses and necessary improvements.
In addition, a set of measures and policy orientations have been defined to promote a more efficient financing and foster a favourable innovation ecosystem. The French innovation policy is articulated around six main avenues:
- Increasing the creation of competitiveness clusters to bring together small and large companies, research laboratories and higher education establishments in a given area and around a given field.
- Stabilising and facilitate the access of small and medium companies to R&D and innovation tax incentives, through the creation of an innovation tax credit for SMEs
- Strengthening financial support to innovative companies through the creation of a public investment bank BPIfrance (November 2013). While originally designed to finance R&D oriented companies, a recent shift has been announced towards the financing of innovation-oriented enterprises. This aims to improve non-technological innovation expenditures.
- Supporting innovation through public procurement
- Strengthening digital economy in all its components.
- Developing a project-specific financial assistance through the Investments for the Future Programme (Programme d'Investissement d'Avenir), with a total budget of €47b for its first two phases. Higher Education and Research priorities only add up to €23b. A third phase of this programme has recently been announced to extend its funding and impact beyond 2017.
These measures are included in a systemic approach to foster an innovation culture that started with the plan "A new deal for innovation" (Une nouvelle donne pour l'innovation) in 2013 and evolved into the strategic agenda for research, technology transfer and innovation "France-Europe 2020".
Some efforts are being made both to simplify and to improve the efficiency of most RDI support measures. While a substantial number of policy initiatives have recently been taken in this aim, the overall system is however still excessively complex. Systematic and periodical evaluation exercises are needed to precisely identify the weaknesses and necessary improvements of R&I policy. The new National Commission for the Evaluation of Innovation Policies should be particularly helpful in this regard.