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France - RIO Country Report

RIO Country Report France 2015

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.

R&I Challenges
Increase the impact of R&D incentives on innovation
Challenge description: 

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.

Policy Response: 

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".

Policy assessment: 

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.

Improve science-industry collaboration
Challenge description: 

France has long made of knowledge transfer and science-industry collaboration one of its main R&I policy priorities. In spite of the adoption of numerous measures and of the achievements since 2000, difficulties in developing links between the academic world and industry persist. In 2014, OECD suggested that the latter resulted mainly from different functional cultures and operating rules. France lags behind similar countries in substantial specific areas. The share of R&D carried out in the French academic sector funded by industry was 2% in 2010, compared to 2.7% in 2000. In 2010, that share was 4.1 in the United Kingdom, 6.4% in the European Union and 6% in the OECD. Researchers' mobility between public and private sectors remains also low: public researchers rarely get hired by private companies. Reciprocally, public research organizations very rarely recruit research staff from the industry, in spite of the legal possibility to do so (this is due to lower remuneration). However, the CIFRE agreements allow the joint funding of doctoral students between a research laboratory and a private company. As a result, in recent years, about 10% of the PhDs were funded through this modality.

Knowledge transfer mechanisms are supported by a multiplicity of comparable measures and organisations, all aimed at fostering public-private collaboration (e.g. the Carnot Institutes, the Institutes for Research and Technology, the Technology Transfer Accelerating Companies, CIFRE). This variety, though converging, may lead to a lack of clarity, overlaps and potentially extra costs.

Finally, the Pôles de compétitivité scheme was often criticised in recent years. This innovation clusters policy was launched in 2005 to develop collaborative projects between public and private research and industrial entities. To date, 71 clusters have been created, with an impact on innovation, job creation or patent registration considered as limited.

Policy Response: 

A number of policy initiatives have been taken in recent years to improve the framework for science-industry collaboration and its effects on innovation. . Measures to support research stakeholders and to foster the development of a culture of knowledge transfer, to promote the creation of spin-offs and to further involve innovative SMEs in science-industry collaboration have been included in the Law on Higher Education and Research of July 2013 and taken into account in the elaboration of the National Research Strategy (2015).

More specifically, several National Reform Programs (2015; 2014; 2013) have insisted on the creation of an ecosystem to foster innovation and bring together companies, research laboratories and higher education establishments. The last NRP (2015) reminds that each cluster is committed to a performance contract, laying down the development of closer ties with technology transfer players and better support for SMEs in access to financing, international expansion and strengthening of skills.

Policy assessment: 

Since 2013, a number of major policy documents have been released, such as the Law on Higher Education and Research (2013) and the National Research Strategy (2015), one of the the aims being to improve  public-private and science-industry collaboration. While France is still lagging behind in terms of privately funded public R&D and mobility of researchers across sectors, it is still too early to assess the effectiveness of both the Law and the Strategy.

Regarding the specific aspect of the Pôles de Compétitivité, little progress has been made with respect to the recommendation made by the Council in 2014 to ensure that resources are focused on the most effective poles and further promote the economic impact of innovation developed in them. However, policy initiative is underway and may be translated into action soon.

Strengthen scientific excellence
Challenge description: 

The French research landscape is traditionally dominated by large Public Research Organizations (the largest of which is the National Centre for Scientific Research) over smaller-scale universities. The average efficiency of public research performers in France was often considered insufficient over the last years. France's scientific output is in an intermediate position when compared to similar countries. Publication figures remain behind those of the United Kingdom and Germany, but show better performance than Italy and Spain. This position has not changed in the last decade. The share of national publications among the top-10% most cited publications is one of the main impact indicators. As of 2012, it has improved to reach 11.9%, but France lags behind Germany (13.0%), the United Kingdom (13.3%), the Netherlands (15.7%) and Denmark (15.6%). It is slightly ahead of Italy (11.4%) and Spain (10.9%). The share of grants awarded per country by the European Research Council gives comparable results: with percentages around 12% to 13% over the period 2007-2012, France stands behind the UK, Germany and Northern European countries and shows better results than Southern Europe.

Policy Response: 

Over the last 10 years, many reforms have been implemented to modify the public research structure. This is meant to positively affect scientific performance and reach excellence. Successive governments have made substantial efforts to further influence research orientations, to increase the role of universities and foster the use of project funding.

One of the most important policy decisions in this regard was the creation of the National Research Agency (ANR) in 2005. Its role consists in allocating competitive funding to PROs and universities, thus complementing their budget allocation. Through this allocation of funding and the management of the Investments for the Future Programme from 2009 onwards, the ANR has been playing a role in the implementation of the national strategic research priorities.

The creation of the ANR has been complemented by the setting up of the High Council of the Evaluation of Research and Higher Education (HCERES, previously AERES). Its main mission consists in evaluating research and higher education institutions, PROs, research units, higher education programmes and degrees to link the allocation of institutional funding to a performance assessment.

To bring together PROs and universities, at local level Higher Education Institutions and University Communities (COMUE) have been created.

Policy assessment: 

France's scientific impact has not substantially improved over the last 10 years, indicating that the reforms undertaken to date have had a limited effect on scientific output. According to the European Commission, there are several bottlenecks, among which the low level of competitive funding and the lack of quality-related criteria in allocating funds to public institutions.

Although the share of project funding has been increasing, from 7% in 2008 to 12% in 2012 for universities and from 7% in 2008 to 10% in 2012 for PROs, France is still among the OECD countries with the lowest proportion of this type of funding. The allocation of performance-based funding is also being enhanced, but most funding still remains based on education metrics (ie. Institutional block funded).

The efforts towards the modernization of the research landscape through structural links between PROs and universities should be maintained. So far, the process has proven complex and costly. OECD (2014) stressed that the integration of the various functions of steering, funding, implementing and evaluating into the PROs are likely to be sub-optimal.

1. Overview of the R&I system

With 66.6 million inhabitants in January 2016, France is the second largest country of the EU28 after Germany. The 2008 economic crisis has affected France’s Gross Domestic Product (GDP) growth rate, as it has in other EU countries, albeit less severely. In 2007, the GDP growth rate was 2.4%, but this fell sharply to 0.2% in 2008 and to -2.9% in 2009. Unlike other countries which quickly recovered, France’s GDP growth stood at 0.3% in 2012 and 2013.

In terms of R&D expenditures, France’s GERD has kept on growing since 2006. Within the EU28, France ranks second after Germany. The GERD to GDP ratio was 2.26% in 2014. France ranks 8th, above the EU28 average (at 2.03% in 2014); it has been increasing since 2008. Total GBAORD has been decreasing since 2009, from €17.5b to below €14.8b in 2014. In terms of percentage of GDP, a steady decrease is apparent over the same period, from 0.93% to 0.7% in 2014. In recent years, the total GBAORD as a percentage of GDP tends to be comparable with the EU average.

2. Recent developments in research and innovation policy and systems

Key developments in the R&I system in 2015 included:

  • Adoption of the National Research Strategy, containing a list of policy orientations and priorities for research performers.
  • Adoption of the National Higher Education Strategy, which provides a roadmap including an action plan of 40 proposals to improve the French higher education system.
  • Submission of the Stability Programme 2015-2018: “A strategy for fiscal consolidation”. This strategy includes measures related to R&I funding, such as the promotion of “investment, entrepreneurship and innovation”.
  • Launch of a new phase of the roadmap "New Face of Industry in France" entitled "Rallying the New face of Industry in France". This new step is meant to accelerate the industrial renewal in France.

To foster innovation, France has long made of knowledge transfer and science-industry collaboration one of its main R&I policy priorities. A number of policy measures have recently been adopted to boost the science-industry collaboration framework. Tangible results of these efforts are still to be seen.

3. Public and private funding of R&I and expenditure

In 2014, French GERD amounted to €48.1b, i.e. 2.26% of GDP. Slightly less than two-third (65%) of which correspond to business R&D (€ 31.2 billion). GERD has been increasing, though quite slowly, both in volume and in relative terms (GDP), at least from 2010. Nonetheless, 2.26% of GDP spent on R&D in 2014, is below the 3% target set by the EU in the framework of the Europe 2020 strategy. In EU 28, France is ranked 8th whereas Germany with 2.84% is at rank 5, and closer to the objective.

French GBAORD continues its decrease started in 2009 (it amounted to €17.5b back then), and reached 14.8b in 2014.  But this amount is the second largest, though far from the German level of public outlays (€ 25.7b, in 2014). When measured by the share per inhabitant, France would be at the 11th rank.

Business R&D expenditures, although representing two-thirds of the share of GDP, are stable at 41% below the objective of 2%.

4. Quality of science base and priorities of the European Research Area

France is aligned with most ERA policies. In terms of quality of the science base, France is slightly below the EU average for number of publications per thousand of active population and for the share of public-private publication. France’s researchers however publish 5.5 times more than the European researchers’ average per thousand of population. The country is ranked third in Europe, below the UK and Germany.

5. Framework conditions for R&I and science-business cooperation

France has long made of knowledge transfer and science-industry collaboration one of its main R&I policy priorities. In spite of the adoption of numerous measures and of the achievements since 2000, difficulties in developing links between the academic world and industry persist. Progress is however being made and the French framework conditions for science-business cooperation is likely to be conducive to business investment in research and innovation.

6. Conclusions

The chapter summarizes relevant policy actions, assesses their appropriateness, efficiency and effectiveness regarding their ability to tackle R&I challenges.

Geo coverage
Report year
Country Report file
Official publication date
Friday, 3 June, 2016
Last update: 27/02/2017 | Top | Legal notice | Contact | Search