Global Competitiveness Report : Gives France Good News
« Global competitiveness is not another term for cheap labour or low taxes. It’s a multifactor approach combining business environment, political and social stability, innovation, education and quality of life. »
(The 2019 Eight International Competitiveness Report)
Put more succintly, a country’s competitiveness is not only a matter of low wages and regulation which affects the business community alone.
It was with this perspective, that Eight International published a detailed analysis of global competitivity looking at the world’s 25 largest economies in a more comprehensive manner. Among the reports and research it drew upon were the World Bank’s « Doing Business » ranking and the World Economic Forum’s Global Competitiveness Index.
Recognizing the intersection of social and economic indicators in determining a country’s competitiveness produced 4 important messages for planners and investors :
- Economic development and personal happiness go hand in hand with a favorable business environment
- Competitiveness is directly linked to the promotion of economic freedom and positive business environment
- Social progress and improving democratic rights are directly linked to economic competitiveness
- Protecting the environment and promoting human growth are compatible goals
How is France doing ?
« France has shown substantial, marked improvement across a whole range of global competitiveness and innovation indices over the past years. In 2019 France was ranked the 5th most attractive country for foreign direct investment in the world.
This is a country very much on the up, with remarkable improvements in 8 of the 11 rankings we monitor for the quality of its business environment. France has excellent infrastructure and high performing health system. »
France can also count on the quality of its infrastructure and the productivity of its employees, strengths generally identified by foreign investors, says Eight International.
France economic system gets high marks for « its Internet network, the quality of its research institutes, its scientific publications, life expectancy, the quality of roads and the reliability of the water distribution network. »
And very importantly France has a positive global reputation:
« according to the US News & World Report magazine, it is now the 2nd country with the strongest cultural influence in the world ».
Is it all positive ?
Of course not. France has slowly but steadily been improving its performance in terms of labour taxation, hiring and dismissal practices, worker mobility, the complexity of trade barriers and the burden of government regulations. This remains a socially sensitive area that will require political determination to improve upon.
« While France has risen slightly in the Forbes ranking of globally most innovative companies, swapping places with the UK, the unresolved issue of restrictive employment practices continues to act as a drag on France’s rise up the rankings. »
Shifting global centers
The current world economy can be seen as quite precarious. Whether it’s markets affected adversely by Brexit or by tariff wars erupting between formerly cooperative trading partners.
However, what this innovative and much more comprehensive than previous analyses tells us is that France is :1) maintaining its high level of sound infrastructure 2) maintaining its excellent human resources 3) and advancing in key business indicators.
The story of France’s slow and sometimes painful advance in moving to a more business friendly environment is often highlighted by the media.
Pascal Raidron, Founding President of Eight Advisory and Chairman of Eight International summarizes it this way :
“A sense of frustration and insecurity created by trade tensions and political uncertainty has obscured the truth that regulated markets create prosperity. In this crucial moment for the global economy, policymakers must seek to cut through the political noise.”
What we learn from this report is positive for France’s positioning in this evolving global economic environment.
