Summary
Highlights
Alain Juillet highlights that economic warfare has always existed but has become more apparent in the last 50 years. He explains that businesses being transferred abroad, research laboratories moving overseas, and companies closing due to commercial attacks or patent issues lead to national impoverishment, job losses, and increased state aid. This economic damage, though less visible than military conflict, has severe consequences.
When a French company is acquired, it's often a high-performing 'flagship' company, coveted for its patents, products, activity, or talented staff. Over 2,000 such companies have been acquired and moved in recent years. The situation is complicated within Europe, as European law prevents France from opposing purchases by other European companies, even if this leads to the loss of strategic assets. However, France can impose conditions on non-European buyers, although these conditions are often not respected.
A crucial loophole exists when non-European entities establish European subsidiaries, granting them European rights. For example, American tech companies operating via Irish subsidiaries benefit from favorable tax conditions and can acquire European firms without the same scrutiny. Mistral, a French AI company, saw Microsoft gain significant hidden control through various European investment firms, illustrating how foreign interests circumvent national protections.
In 2005, France introduced a decree requiring government authorization for foreign acquisitions of French companies outside Europe, initially facing criticism for being 'protectionist.' This decree later expanded to include more sectors beyond just sovereign industries like defense, aligning with similar actions taken by Germany. However, enforcement remains a challenge, as companies often bypass agreed conditions.
France excels in fundamental research but fails to effectively transition it to applied research and commercialization. Researchers often resist the commercial application of their work, viewing it as 'selling out.' This leads to foreign entities benefiting from French innovations, like the case of hypersonics where French discoveries were developed into advanced weaponry by Russia and China, while France lagged.
French banks are reluctant to invest in businesses, preferring more lucrative trading activities. This leaves French companies seeking development funds vulnerable to foreign, often Chinese, investment, which then gains control. The lack of private pension funds, unlike in other developed nations, further limits domestic capital availability for national industrial development. France also lacks a coherent, long-term strategic plan, unlike countries like the US and China.
To reindustrialize, France needs to finance research, development, and factory construction, along with robust market intelligence, robust legal protection, and AI-driven analysis. It also needs sustained long-term commitment, considering that building manufacturing facilities, like microchip factories, can take 5 to 7 years. The current political climate, which often discusses over-taxing successful businesses, also discourages both national and foreign investment.
Modern economic competition requires strong state support for businesses, akin to military forces needing air cover and advanced technology. Historically, France's successful industrial projects like aeronautics and nuclear power were public-private partnerships backed by the state. Today, despite capable private companies, state support is insufficient due to lack of means and fragmented policy, leaving France in a vulnerable economic position.