France, the land of (successful) entrepreneurs
Cocorico! Despite a difficult economic climate, the French entrepreneurial scene continues to shine, as INSEE explains: 848,200 businesses were created in 2020 (+4% compared to 2019), an all-time record that was quickly broken in 2021, however! As a matter of fact, 995,900 businesses were founded last year, a 17% increase compared to 2020. The crisis has not slowed down the burgeoning appetite of the French for entrepreneurship. More details to follow.
French entrepreneurship has weathered the crisis well
With almost one million new businesses created in 2021, France remains the promised land of entrepreneurship. Business creation continues to drive the economy and create job opportunities. According to INSEE, French startups have generated more than 1.5 million new jobs in 2021 alone! According to the 2021 French Entrepreneurial Index of “Bpifrance Creation”, 30% of French people aged 18 and over are now involved in an entrepreneurial activity.
About the French Entrepreneurial Index (IEF)
This index is conducted every two years on the basis of two metrics:
Despite the complicated economic situation during the health crisis, the French continued to show optimism and resilience. Entrepreneurship has emerged as a solution for fulfillment and emancipation in professional life. One out of five French people say they have been affected by the health crisis, and the same proportion are considering starting their own business.
This crisis has actually allowed project owners and those considering starting a business to study and explore new opportunities. So, despite the deterioration of the economic situation in 2020, the entrepreneurial chain has maintained the same level as in 2018.
What motivates entrepreneurs to start a business?
The health crisis has triggered profound shifts in the entrepreneurial world and has changed the reasons why French people want to start their own business:
- French people aspire to be their own boss (24% for business owners and 38% for soon-to-be entrepreneurs),
- To increase their income (22%);
- Fulfill a dream (22% of project owners and 34% for soon-to-be entrepreneurs);
- Face new challenges (20% for project owners and 22% for soon-to-be entrepreneurs, respectively).
Entrepreneurship is now associated with strong values. For example, commitment to the environment is important for more than half of project owners and two-thirds of company managers. This dynamic reflects the statement made by Emmanuel Macron in 2016, when he was Minister of the Economy, Industry and the Digital Economy: "Being an entrepreneur is about deciding to change the world."
What are the specific characteristics of French entrepreneurship?
Entrepreneurship involves all age groups and all business sectors, but young people seem to be taking the lead.
A wide variety of business sectors
The entrepreneurial momentum affects all business sectors, including health, agriculture, transportation, luxury, gastronomy and cybersecurity. The success of Made in France contributes to this trend. There are also many companies and startups in the following industries:
- Green Tech (including renewable energies, energy efficiency and Water & Sanitation);
- Ecology ( including organic farming, gardening, etc.)
- Real estate;
- Personal care (childcare, support for the disabled and the elderly, home help)
- crafts ( manufacturing, food, services, construction).
Young people at the forefront of entrepreneurship
Starting or taking over a business used to be associated with a certain social category (high level of education, important income, significant experience). Today, young people are taking the lead.
Indeed, 51% of young people aged 18 to 30 are part of the entrepreneurial chain and nearly 86% intend to create or take over a business (2021 “IEF Spécial Jeunes”):
- 29% are project owners;
- 26% are company managers;
- 24% are former business owners;
- 18% are soon-to-be entrepreneurs.
Young people are increasingly breaking away from the traditional wage model and view entrepreneurship as a way to gain independence by becoming their own boss. They express their desire to make a dream come true, to face new challenges, to change their job and to increase their income.
The CIC - Moovjee barometer further explains that 71% of young people are " driven to take control of their future " and 49% believe that " the crisis offers opportunities and that it is the right time to try new things ". Also, 62% say that "youth entrepreneurship is a necessity to overcome the economic crisis linked to Covid-19" and 48% believe that "in the current context, starting a business is the best way for young people to get a job".
About the national student-entrepreneur status
The Ministry of National Education, Higher Education and Research established the national student-entrepreneur status in 2014. Students and young graduates can receive support to start their business creation project from a "Pépite" (Student Center for Innovation, Transfer and Entrepreneurship).
"The national status of student-entrepreneur gave me the opportunity to start my own business as an end-of-study internship. I was able to follow a training course in entrepreneurship and learn more about the key aspects of business creation. I think I would have had a lot of trouble getting my project off the ground without this training," says Marjolaine, who founded the Atelier du ferment in Mayenne.
According to Infogreffe's "Women and Entrepreneurship in 2021" barometer, 32.3% of entrepreneurs in France are women, a proportion that has been steadily increasing over the last 30 years. Women account for approximately one third of the managers of the 611,264 companies registered in 2021 in the Trade and Companies Register.
Female entrepreneurship is particularly prevalent in some business sectors, such as textile manufacturing and the clothing industry ( around three quarters of female entrepreneurs in 2021), but also in social work and other types of personal care services (funeral services, hairdressing and beauty care, laundry, etc.). On the other hand, women are less represented in manufacturing, construction and water management.
Unicorns, startups valued at more than $1 billion
Aileen Lee, an American venture capital expert, introduced and defined the concept of a Unicorn in 2013. It is "a new technology startup that is less than ten years old and valued at one billion dollars or more before going public."
France now has 27 Unicorns, compared to just 3 in 2017. For Maïlys Ferrere, director of the Large Venture investment division at Bpifrance, "this is proof that the French Tech ecosystem has matured and that France is starting to have some sizeable startups." According to the EY barometer, €11.6 billion were invested in France in 2021. "This is a new record. We can see that operations of more than €100 million are particularly significant in France," explains Maïlys Ferrere.
The measures announced in 2017 by Emmanuel Macron seem to be coming to fruition: “France must become a country of unicorns, the country of the giants of tomorrow”.
Initiatives to promote entrepreneurship in France
The interest of the French for entrepreneurship and the upheavals of the job market have pushed the government to implement various actions, especially to simplify the formalities of business creation.
For example, the Entreprendre.service-public.fr website has been launched to " make it easier to start a business " and " better protect entrepreneurs " according to Jean-Baptiste Lemoyne, the minister in charge of SMEs.
The minister also mentioned another website, formalites.entreprises.gouv.fr, which has been open for testing since January 1, 2022. "It will centralize all administrative formalities for registering, modifying or ceasing one's activity as of January 1, 2023".
Do you want to start an entrepreneurial adventure? The American Business School of Paris provides the MBA in Entrepreneurship and International Business Development, a program dedicated to the creation or takeover of a business. Feel free to visit us and find out more about this program. Our teams are available to discuss your project.