Government approves 67 competitiveness centres

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In July 2005, the French government gave official approval to 67 'competitiveness centres' to be created in 2006, including 13 seen as suited for projects on a worldwide scale. Around 3,000 research posts are to be created in 2006 and an estimated 400,000 jobs could be created or saved by these new specialised industrial innovation projects. The social partners have given mixed reactions to the initiative.

The government's Interministerial Committee for Physical Planning and Development (Comité interministériel d’aménagement et de développement du territoire, CIADT) finalised a list of 'competitiveness centres' (pôles de compétitivité) on 12 July 2005. The approved centres are intended to set up networks of:

• companies;

• universities and vocational schools; and

• public and private research centres.

The main objective is to seek out complementarities between these different entities, so allowing them to fit together into 'areas of excellence' all over the country, with specialisations that put them on the cutting edge of innovation. Around 3,000 research posts are to be created in 2006, and these competitiveness centres could create or save an estimated 400,000 jobs.

Competitiveness centres

For Dominique de Villepin, the Prime Minister, choosing the 67 projects was a matter of combining two requirements: competitiveness and physical planning. A total of 105 bids for competitiveness centres status were lodged with the government in February 2005, and examined carefully by a Group of Experts (Groupe de Personnalités Qualifiées, GPQ) and an Interministerial Technical Working Party (Groupe Technique Interministériel, GTI). So far, 67 out of these 105 have been approved as competitiveness centres.

The number of centres selected varies from one region to another, ranging from one (as in Champagne-Ardennes or La Réunion) to 16 (in Rhône-Alpes). In the government’s view, 13 competitiveness centres are suited to run projects on a worldwide scale, in the following 9 sectors:

• surgery and health (Alsace, Ile de France);

• aerospace (Aquitaine and Midi-Pyrénées);

• maritime - oceanography, shipbuilding and safety at sea (Bretagne and Provence-Alpes-Côte d’Azur);

• electronics and telecommunications (Bretagne);

• chemicals (Rhône-Alpes);

• nanotechnology and virology (Rhône-Alpes);

• agriculture for 'non-agricultural' purposes (Rhône-Alpes);

• speciality vegetables (Pays de Loire); and

• software and complex systems, including telecommunications (Provence-Alpes-Côte d’Azur, Ile de France).

The CIADT did not follow up the recommendation made to it by the GPQ, made up of 30 industrialists, and the 140 experts of the GTI to place the competitiveness centres into different categories. The Prime Minister selected three times as many projects as it had been suggested he should.

Support for centres

The government has stipulated that each centre should benefit from technical support from the state. It will be the responsibility of the regional prefects (Préfets de Région) to set up teams, with what are to be known as partnership coordinating committees to support projects. These committees will have a scientific component, including the local field agencies of central government departments, and what will be known as a financial backers’ committee. There will be representatives from both public and private sector entities, such as the Industrial Innovation Agency (Agence de l’innovation industrielle, AII), the National Research Agency (Agence nationale de la recherche, ANR) and a new group, Oséo, the result of a merger between the SME Development Bank (Banque de Développement des PME, BDPME) and its SOFARIS subsidiary on the one hand and the National Agency for Exploiting Research (Agence nationale de valorisation de la recherche, ANVAR) on the other.

The government has decided to double the initial budget allocation of EUR 750 million for the period 2006-8. Over these three years, EUR 1.2 billion will come in the form of funds released by the various ministries (EUR 400 million) and by the national agencies (EUR 800 million) within the framework of programmes encouraging partnerships between public and corporate research centres and contributing to technology transfers and R&D development.

In addition, provision has been made for EUR 300 million worth of exemptions from tax and social security contributions for those projects that receive Ssate approval (the conditions for approval and the definition of the areas involved will be made public in October 2005). The 2005 budget includes two tax measures intended to benefit these competitiveness centres:

• a 100% exemption from corporation tax for the first three years and 50% for the two following years (within the limits of the EU 'de minimis' ceiling of EUR 100,000 per year); and

• exemption from the annual across-the-board lump-sum tax for a period not exceeding five years.

Employers’ social contributions may be reduced by 50% and 25% for SMEs and large companies respectively for the duration of the project, with an upper limit of six years.

The Prime Minister stated that the number of approved centres of excellence may rise in future, because 'many of the non-selected projects are nonetheless especially worthwhile for regional economic development'. On 28 June 2005, the Physical Planning Minister, Christian Estrosi, with a view to reinforcing support for the projects, brought up the idea of a merger between the Interministerial Working Party on Economic Change (Mission interministérielle sur les mutations économiques, MIME) and the Physical Planning Delegation (Délégation à l’Aménagement du Territoire, DATAR). He will moreover ensure that 'the new generation of European funds, from 2007 on, will be well enough financed to provide effective support for territory-based projects'.

Reactions

The new president of the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) employers' confederation, Laurence Parisot (FR0508102N), is entirely in favour of the government’s decision, as 'these competitiveness centres will be a source of dynamism for the economy and for jobs'.

The French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT) stated that, although the setting up of competitiveness centres is a good idea, it provides only 'incomplete answers to the questions raised by relocations' and that 'the state lacks a vision of the future'.

For its part, the General Confederation of Labour (Confédération générale du travail, CGT) believes that 'the government’s response is out of kilter with its declared objective'. It feels that the right thing would be to 'satisfy the demands of the scientific community' and 'encourage the involvement of the state in major programmes that develop the economy across a wide sweep of sectors along the lines of the three-part formula research-innovation-social and industrial development, as set out in the Beffa report.' (FR0502106F)

The General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO) has serious misgivings as to 'the part dealing with exemption from taxes and social contributions, which penalises tax and social revenue'. It insists on the need to have 'an industrial strategy including equality of treatment throughout the whole country', especially as regards setting up competitiveness centres. It fears 'an industrial policy on the cheap'.

The governing Union for a People's Movement (Union pour un mouvement populaire, UMP) party stated that 'the competitiveness centres will make possible an active struggle against delocalisations and in favour of the development of French jobs and skills'. The opposition Socialist Party (Parti socialiste, PS), for its part, regretted a perceived logic of 'spreading aid too thin' and 'pitting the regions one against the other'.

Commentary

The establishment of approved competitiveness centres is a significant issue in the current context of debates on company relocations abroad (FR0507106F). It challenges the relevance of decisions taken in the areas of decentralisation and the dispersal of central government departments (FR0410105F).

The new competitiveness centres confirm the existing priority status of projects in fields such as transport (air transport with EADS through Airbus, rail transport with the high speed train ([Train à Grande Vitesse, TGV]) and energy (encouraged by the recent international choice of Cadarache for Iter, the future nuclear fusion reactor).

Finally, competitiveness centres combine economic and industrial policies with social issues, since about 400,000 jobs might be involved. No consideration has been given to the risks of increasingly cut-throat competition between different parts of the country, nor to what the future may hold for economic activities and jobs in the non-approved areas. (Benoit Robin, IRES)