No Entrepreneurs, Please; We're French


Loic Le Meur and Arnaud Montebourg
Le Web/YouTube

CNet's Stephen Shankland has the interesting story of encounters at international tech entrepreneurship conference, LeWeb, between start-up business people and Arnaud Montebourg, France's minister for industrial renewal. Specifically, entrepreneurs compared their experiences in America and Britain, where they were relatively free to innovate, take risk, hire, and fire as needed in order to get businesses off the ground, with the rule-bound and expensive process in France. An interaction at the 11:00 mark in the video below makes it clear that, whatever Montebourg's title,  there's probably little renewal in store for France anytime soon.

Clara Shih, founder and chief executive of Hearsay Social, had a message she said [organizer Loic] Le Meur could deliver to Montebourg: "You should tell him to make it easier to hire and fire," she said. "It would be helpful for employers…to have more flexible labor laws, because then we would be more aggressive about hiring."

When Le Meur delivered the message, with reinforcement from Jeff Clavier founder and managing partner of SoftTech Venture Capital, Montebourg said things are different here.

"We are not California. We are French," Montebourg said. "We have a tradition to help people, to protect people. The question for us is to find a good balance between protection and what you need."

Clavier wasn't buying it. More flexibility would mean more jobs, he said.

"The reason we create so many jobs in California and have such low unemployment is that we can contract with or get rid of people as we need to, if they don't perform or as economic issues arise. The point is that we create the jobs first and then contract afterwards as opposed to thinking for 12 or 18 months whether we can afford to hire one more person."

Note that France faces protests around the country against high taxes and intrusive regulation that make doing business increasingly difficult. Truck drivers blocked roads to protest an "ecotax," and the government even produced a secret (but leaked) report saying that taxation was losing legitimacy and the country is on the verge of revolt.

The Hollande government is under serious pressure to ease byzantine labor regulation after the country was slammed with a surprise credit downgrade. Those rules are sufficiently bizarre as to require companies to keep money-losing plants with inefficient workforces open—apparently indefinitely, or at least until the money runs out.

Which makes a less-than-enticing environment for entrepreneurial types.

As Le Meur told Montebourg at LeWeb, "The problem here is that countries around us see this as trying to slow down startups. You're penalizing the startups. They try of course to disrupt systems. That's how they grow. The image of France is that it's the country where they try to slow you down to protect the past."