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“France and the United States, at the core of innovation”

Published on November 15, 2012
Speech by the French Ambassador to the United States, François Delattre

Florida International University, Miami, November 2, 2012

France and the United States: leading innovators

It’s a great pleasure for me to be here with you this morning, and it’s a great privilege to speak at such a prestigious university and to such a distinguished audience.

I would like to begin by cordially thanking FIU President Mark Rosenberg and Provost Douglas Wartzok for inviting me to this conference. I want to offer my special thanks to the two departments that made this presentation possible: the Miami-Florida European Union Center of Excellence, represented today by Rebecca Friedman and Christine Caly, and the European Studies Program and the Department of Politics and International Relations, represented today by John Stack.

And last but not least, many thanks to FIU former Diplomat in Residence Hilarion Martinez.

I know there are FIU students who are interns at our consulate in Miami; I appreciate your hard work and your interest in France. It is great to see that, with almost 50% of its students having scholarships, FIU shares the same aims as France and that it invests significantly in research. I want to commend the Department of Study Abroad, which helped 53 students study in France in 2011.

Ladies and gentlemen,

Today I am honored to present France’s strategy for innovation, the tools the French government has devised for it, and the exchanges that currently exist in this area between France and the United States.

I – if you ask me what France’s priority is today as a country, I would answer without hesitation that innovation is our number-one, number-two and number-three priority. And it’s obviously a priority that we share with our American friends, regardless of the differences between our two countries in terms of public and private funding.

A) To start with, I believe we are experiencing three key technological revolutions at the same time, and that they are our priorities in terms of innovation.

The first is the revolution in sustainable development, energy, renewables, green tech, what you call sustainability, urban transportation, high-speed train, etc.

Here I believe it’s fair to say that France and French companies are in many respects in a leading position worldwide.

Two examples :

the two leading companies in terms of water treatment and waste management are French: Veolia and Suez Environment. And we know it is a very fast-growing market and an industry largely driven by innovation.

Second example: France is the world leader in nuclear energy, with companies like AREVA, the CEA, EDF, and Alstom (which is also a key player in the high-speed train). Seventy-five percent of our electricity comes from nuclear energy. And France is leading the way in terms of innovation, with the EPR reactor developed by AREVA and the ITER international program on nuclear fusion (located in Cadarache, in the South of France).

This investment in nuclear energy has been instrumental to increasing France’s energy independence and to better fight global warming, since nuclear energy is CO2-free.

More broadly, the French energy industry is very strong with companies like the oil giant Total, GdF Suez, and Vallourec, to name just a few. And all these companies are massively investing in innovation and in renewables in particular.

The second technological revolution is in the life sciences, genetics, genomics, biotech.

Here too France has key assets to offer:

Sanofi, one of the leading pharmaceutical companies worldwide, and a key player in terms of innovation (and a major investor in this country); the Pasteur Institute, the Curie Institute, etc.

France also has a flourishing biotech industry, preceded only by the U.S. in terms of the number of small businesses working in the biotech industry.

The third revolution is the digital revolution, the Internet revolution, everything that has to do with information, communication and nanotechnology.

Here, the fact is that the major players are American (Apple, Google, Amazon, Microsoft) but France also has important assets: Dassault System (a world leader in 3D), France Telecom, Vivendi, Alcatel-Lucent, Videogames (Ubisoft), ST Micro Electronics (microchips) and software more broadly.

B) France’s National Strategy on Research and Innovation, or SNRI, focuses on the three technological revolutions I was referring to.

This strategy considers the challenges we face in research and innovation and covers everything from the most basic research to the most cutting-edge innovation. One example of the latter is the work by our second-to-last Nobel Prize laureate in Physics, Albert Fert, who discovered giant magnetoresistance. It is now the basis for the design of the hard drives we have in our computers.

The SNRI offers numerous assets for companies involved in R&D.

France offers the highest R&D tax credit in the industrialized world. For companies receiving the credit for the first time, the amount represents 50% of their eligible R&D expenses the first year. Last year, companies – many of them foreign– received more than $7 billion in research tax credits.

The government provides many other forms of support to strengthen and expand the work of innovative companies.

Let me give you a few examples:

- Incubators: These are designed to encourage the establishment of innovative companies as a result of government-funded research. In 2012, 30 innovative business incubators nationwide were accredited by the Ministry of Higher Education and Research.

- Young Innovative Companies: Small firms conducting R&D projects are eligible for tax breaks and personal exemptions from social security taxes.

- Young Business Colleges: These promote the creation of businesses by students and those involved in academic research institutions. This status features significant tax exemptions that help companies make it through their early years.

- We also established a national competition to foster the establishment of innovative enterprises: In 2012, 1,000 projects were submitted and 62 winners were selected. Established in 1999, this competition has led to the creation of 1,400 companies; 95% of them are still in business.

France is also particularly active in promoting public-private research partnerships.

Let me give you two illustrations:

- First, the innovation clusters.

Since 2005 the French government has helped establish and fund 71 innovation clusters nationwide. These incentives for R&D enable public-sector R&D centers and educational institutions that work with private companies to exploit synergies and develop collaborative innovation projects. At the end of 2011, 6,502 companies belonged to innovation clusters; of that number, 588 were foreign-owned firms.

Here, we’ve learned from what has been working so well in the U.S.: bringing together the private sector, universities and research centers. And it works very well in France.

- A second illustration of private-public partnership is what we call the “investment for the future” program.

Launched in 2010, it draws upon a $45 billion state-funded budget to enhance the French economy’s competitiveness in five strategic areas:

Higher education and training ($14 billion)
Research ($10.3 billion)
SMEs and the industrial sector ($8.4 billion)
Sustainable development ($6.6 billion)
Digital economy ($5.8 billion)

What is important here is to keep in mind that France is investing $60 billion of public and private money over a period of four years in research and innovation. It’s an unprecedented effort in my country and, I believe, in Europe.

C) This effort toward innovation goes hand in hand with booming entrepreneurship. In the past year, more than 600,000 business start-ups have been founded in France. It says a lot about the vitality of the French economy (…) and reminds us that entrepreneur is a French word.

And of course entrepreneurship and innovation go together. New business start ups are largely driven by innovation, and conversely, entrepreneurship is the best engine for innovation – and thus for growth and job creation.

II) Against this backdrop, what about French-American relations?

A) Here I have good news: French-American relations have never been closer than they are today, as illustrated by President Hollande’s very successful visit to Washington last May, literally three days after his inauguration. It’s true on the diplomatic and security front with regard to Iran, Syria, the fight against terrorism, etc.

And it’s true on the economic front with regard to cross-investment, (…)

Let me underscore that innovation is at the core of this French-American partnership. I’ll give you three illustrations:

1) As I told you, cross-investment is the backbone of the French-American economic partnership. And French investment in the U.S., as well as American investment in France, largely focuses on innovation and high-value-added jobs.

As far as French investment in the U.S. is concerned, let me mention two quick examples coming from the last few months (Dassault System’s campus in Waltham, Vax-Design/Sanofi’s new facility in Orlando).

As far as American investment in France is concerned, it should come as no surprise that high-tech companies like Microsoft and Apple recently established their main European research centers in France.

In the same vein, Amazon is investing in France, FedEx has established its largest hub outside the U.S. in Paris CDG (its second-largest hub worldwide after Memphis), etc.

2) Scientific exchanges between our two countries are also growing stronger every year. A prime example of this is the Curie Institute, one of the world leaders in the fight against breast cancer, based on the Marie Curie connection with the U.S.

3) University collaborations (such as the Alliance Program, MIT-Polytechnique, Chateaubriand fellowship, the Partner University Fund, etc.)

The Chateaubriand Fellowship aims to institute or reinforce collaboration, partnerships and joint projects by promoting exchanges at the doctoral level.

It supports PhD students who are enrolled in an American university and wish to conduct research in a French laboratory (public or private) for four to nine months as part of a jointly supervised PhD.

B) Because innovation is a key priority for us all, it should come as no surprise that intellectual property is an issue of the utmost importance. An issue on which France and the U.S. share, as in many other areas, many common views.

In both of our countries, the protection of intellectual property is a crucial tool to foster innovation and contributes in a major way to economic growth.

In both of our countries, patents, trademarks and copyrights are indeed the principal means of protecting innovation.

As far as France is concerned, I’d like to emphasize the recent creation of France Brevets, the first investment fund fully dedicated to patent promotion and monetization in Europe.

France Brevets is a 100 million euro investment fund whose primary objective is to enable research centers as well as private companies to exploit their patents more effectively on an international scale, primarily through the operation of patent clusters for licensing purposes, and by promoting cross-fertilization in the management of public- and private-sector patents.

In this respect, the fight against counterfeiting worldwide is a major priority (…). More broadly, one of our priorities within the transatlantic partnership is to make sure that the emerging countries better share our vision of intellectual property rights. We all know that a lot is at stake here.

Let me conclude on this positive note and on the values that we share.

Let us never forget that our two countries owe each other their very existence as free nations (from Yorktown to the beaches of Normandy…).

The French-American partnership is the strongest when it can walk on two legs: shared values, history and culture on one side; economic partnership and innovation on the other.

I hope you believe in France. We certainly believe in America’s future. So we believe more than ever in the French-American friendship.

Alors vive les Etats-Unis!

Vive la France !

Et vive l’amitié franco-américaine !

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