Relocating French production, an almost impossible challenge?

In the midst of a global pandemic, the French debt is close to 120% of GDP. A historical record that illustrates our economic and industry performance. It would be naive to believe that the health crisis is the only reason for this. Export figures are at their lowest. The Rexecode institute highlights these data in a report of March2021. For example, between 2019 and 2020, exports of goods and services around the world have fallen by 13.2% in Europe, where in France there is a decline of 19.2%. For exports of goods in the euro zone, France, which accounted for 13.9% of the share, reaches 12.7% in 2020, while the other European countries remain stable.

The health context does not explain everything. Other countries are also impacted by the same measures. For example, in the heart of this third containment, industries remain open and continue to produce. Since March 2020, Italy and Spain have had restrictions very similar to ours and their economic situation of export is not affected.

It is in this context that the country’s industrial situation must be monitored very closely. While we can rebound, what strategy should we choose?

Repatriate our industries or develop strategic sectors?

Many speak of relocation, the government speaks of reindustrialization. Moreover, it is in this objective that 1 billion additional euros will be released. They belong to the recovery plan for the relocation and digitalization of industry, and join the 800 million already invested since the beginning of the health crisis. 4700 projects have been identified to benefit from these subventions. But public money cannot revive the economy alone. Good decisions are needed, or business creators who want to settle in France.

The companies that relocated were motivated by good reasons. Processes that do not require French know-how, proximity to raw materials, or a more accessible workforce were often the motivations. It’s always about economic performance. Today, these factors have changed little or not at all.

Some industries, which manufacture heavy and difficult to transport products, or those which want a traceability or a reactivity without fault, relocate their workshops. Still, this remains anecdotal. There are 98 companies that have relocated their production between 2014 and 2018 according to the Direction Générale des Entreprises. Relocation is therefore not the solution, neither in the short nor in the medium term.

At the same time, the world is getting faster by the day and innovation is the key to success. For companies developing innovative products, the disruption of supplies from China in early 2020 was a warning signal. In technological advances, speed and reactivity are required to avoid losing ground to the many competitors. It is in this context that it becomes intelligent to produce in France. Thanks to these industries manufacturing the products of tomorrow, we can keep the hope to reverse the curves and make the French industry shine.

Competitiveness is the key

France Stratégie reminds us in a report that production taxes amount to 4.6% of GDP in France, while the European average is twice as low at 2.2%. In fact, we have one of the least advantageous tax rates in Europe. Robotisation could be one of the keys to improving our economic performance. We are also lagging behind in this area, especially compared to Asian countries. For example, South Korea has 4 times more robots per 10,000 inhabitants than France. Within Europe, Germany is in the lead with 346 robots per 10,000 inhabitants. You have to divide this number by two to get the French figures.

It is time to reverse the trend, with products that are in tune with the times. The general interest for “made in France” can help, but will not be enough. We must continue to help innovative companies to establish themselves in the long term with radical changes. For example, in an interview on Monday, April 12, Xavier Bertrand announced as a candidate for the presidential elections that he wanted to reduce taxes on production by 50%, to reach the European level. An announcement that we hope will inspire his opponents. The aid can also be territorial, and allow to revitalize some regions which offer today few job opportunities to their inhabitants.

New and more local offers

Demand is changing. When, a few years ago, we were aiming for maximum standardization in order to save on mass and offer ever cheaper products, relocation made sense. Today, everyone wants products that are different from others. Customization is in fashion. A car with a blue roof, a personalized pattern in the textile industry or a smartphone case with a picture of your son, these are products for which we do not want to wait 1 month between the order and the delivery.

With the rise of 3D printing, laser engraving, and new production technologies, it is a local and territorial economy that can be born if we help it. Help it financially, but not only, because today money is not enough. To make a company work, you also need skills.

Training, a key to the reindustrialization of the country

The skills needed to create and operate industries are now more difficult to find among young people. Indeed, the attractiveness of industry has greatly decreased in recent years. The crisis of 2007 has weakened the world industry and has impacted all young people who were entering studies. As a result, the number of students enrolled in industrial training programs has decreased.

Fortunately, for some years now, some territories and trade associations have been trying to do their best to attract young people to the industry. If France wants to become a leader in the industrial field again, it must at all costs revitalize the image of the factory. These are fruits that will be harvested in a few years, even decades, but it is one of the solutions to rebound.

French industry must also be digital

For reasons of efficiency, and to attract young people, the factory of tomorrow is digital. Some products and services associated with factory 4.0 allow workshops to develop quality or performance monitoring in a simple and accessible way. Thanks to developments of this type, it is possible for each company to increase its skills and profitability in order to become fierce competitors against global companies that often benefit from lower operating costs.

The appetite of young people for new technologies is no longer to be proven. They can enable today’s companies to stay in tune with our world and continue to innovate while staying on course. It is in this direction that we will be able to boost the general competitiveness of the country, the objective being to allow France to shine again.

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