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The French Government on Digital - Mid-Term Evaluation

ARTICLES - 31 March 2020

Described as the President of the “Start-Up Nation”, Emmanuel Macron confessed on June 22nd, 2017 that, had he not pursued a career in politics, he would probably have become an entrepreneur. This interest for entrepreneurship was largely reflected in his campaign programme and, once elected, in his public actions. Now in his mid-term, if his determination  cannot be questioned, the results are nevertheless still far off. The current COVID-19 crisis only reinforces the French State’s limited digitalisation : paper travel certificates (used by citizens for any local travels during the lockdown), perfectible online education tools, a lack of epidemiologic surveillance through big data, little use of medical records on a large scale, etc.  

The beginnings were promising: the French State Secretary for Digital was placed under the umbrella of the Prime Minister’s office, and the famous incubator Station F was launched  by the President himself. However, things did not unfold as planned, as the Secretary of State for Digital ended up under the Ministry of the Economy’s responsibilities, turning digital issues into economic ones and narrowing its capacity to act on the whole of government.

Review of the election commitments

A considerable effort to provide Internet access

Campaign commitment: complete national coverage with high-speed networks before the end of the five-year term, and eradicate areas without network (also called “white areas”)

Concerning Internet access, despite the challenges faced by the government when financing new infrastructures, it is likely that the promise to cover 100% of France with high-speed networks will be kept. Concerning 5G however, two challenges remain. First, it is necessary to educate the general public on security issues (in order to avoid controversies such as the one occurring for the Linky meters, a connected electric meter criticized by a large part of the population for public safety concerns). Second, there needs to be more dialogue and planning with economic actors, who don’t seem to have seized the opportunities the new networks represent. 

Finally, on the topic of “white areas” (rural territories where network access is limited or  nonexistent), the four national operators signed an agreement to mutualise infrastructure and invested 3 billion euros, largely under the government’s initiative. Therefore, despite France being in the 20th position amongst EU member states in terms of access, the government’s efforts and coherence remain remarkable, even though critics coming from French territories remain valid (heavy bureaucracy and a distribution of territorial competencies that is difficult to understand).

Small measures to avoid digital exclusion

Campaign commitment: carry out an inclusive strategy towards people facing difficulties using digital tools by building, in collaboration with NGOs and local authorities, a support network offering help and training 

Regarding digital exclusion, a training program called the  “Digital Pass” was put in place. Its aim was to offer credits to citizens who face difficulties using digital tools. In total, this amounted to a 40.5M€ budget (10.5M€ + 30M€) to train 200 000 users - a small number compared to the estimated 13M French citizens facing difficulties with digitalisation. It should be noted that, this programme being coordinated by local actors, it is still difficult to measure its success.  

A poor governance of the State’s digitalisation

Campaign commitment: dematerialise 100% of administrative procedures by 2020 (except the first issuance of official identification documents) and rely on digital tools to redefine public action

The poor digitalisation of public services is at the root of many profound frustrations and concrete worries, as demonstrated by the Yellow Vests movement and the results of the resulting french Grand Débat (a series of discussions organised online and offline between the French government and local territories to understand local dissatisfactions). Overall, the digitalisation of administrative documents and procedures remain largely unequal amongst different ministries, and some are largely falling behind. A ministry for Digital and Public Transformation would have had the necessary powers to oversee the digitalisation of the French state. Unfortunately, the government never had the political strength to create such an entity.  

Some efforts to support the digital transformation of companies

Campaign commitment : support SMEs for the success of their digital transformation relying particularly on professional training 

The aid towards the digital transformation of companies, especially SMEs, was brought by the France Numérique initiative in 2018. This included online courses for entrepreneurs and business leaders and a 1 billion euro investment. However, actors willing to participate by creating content and services to help businesses were so numerous and diverse that it remained a challenge for entrepreneurs to find products tailored to their needs. Amongst the actors, the Chamber of commerce, the Bank for Public Investment, the regions, the company union MEDEF and others developed various tools and services. It is crucial to convince stakeholders to reduce the production of different solutions if we are to foster the digital transformation of French companies. The government could play a larger role in structuring these actions.

Review of the government’s commitments

The draft Avia law against online hate speech: a missed opportunity

A draft legislation on hate speech (also called the “Avia law”) is currently under final revision of the Senate before its final vote at the National Assembly. This regulation, drafted in a context of highly emotional debates, was the subject of many criticisms. If it first passed the National Assembly, it ended up being reviewed by both the Senate and the European Commission. The text ends up transferring powers to online platforms and it is a shame that the government did not seek to follow, in the first version of the text, the recommendations drafted in the Loutrel mission on regulating social networks, such as proposals to audit platforms, as done in financial services.

Health transformations: a mixed review

The Health Act, inspired by the My Health 2022 strategy and adopted by Parliament on 16 July 2019, aims to establish a better-organised regional healthcare system, and in particular to introduce new local healthcare structures. This law should allow the emergence of a health system that takes advantage of some of the possibilities offered by digital tools (the law addresses the regulatory challenges posed by the Health Data Hub, a platform allowing a centralised access to health data, and the platform Digital Health, which includes  shared medical records and offers tools for patients). Here again, if the overall dynamics are to be welcomed, the challenge is one of governance, as a large number of actors play a role in managing these projects, reducing efficiency.

Some emerging initiatives in favour of diversity 

Concerning diversity, several initiatives were launched, including SISTA, a collective of women entrepreneurs that wrote, in collaboration with the French Digital Council, a charter encouraging investment funds to dedicate at least 25% of their investments to women. Furthermore, the A2RNE initiative, within the Ministry of Education, has put in place digital solutions for those with disabilities. Also, the Tremplin project seeks to increase the employability of young graduates with professional training.

Innovation and research: efforts that do not meet the challenges

The PACTE law (the Action Plan for Business Growth and Transformation, adopted in April 2019) deeply renovated the researcher-entrepreneur status and led to start-up creations within academia and the research environment. However, the academic sector still needs fundamental reforms, which can be considered a government failure regarding innovation. For example, both in the UK (venture capital investments of 11 billion euros, compared to 5 billion euros in France) and in Israel (innovation strategy financed by 4% of GDP in R&D), investments are supported by a strong core of universities and research centers which have proved their success. 

Concerning investment in innovation, if the French government sought to create a 10 billion euro fund dedicated to innovation, it was gradually transformed into an endowment fund (probably to stay in line with the European Commission’s 3% budget deficit rule), with around 300 million euros per year being invested. Sadly, this money is mainly used to support large organisations instead of financing truly innovative projects. On the positive side, the fiscal framework facilitating investments in innovative firms is laudable (a mechanism was put in place to lower the cost for employees to acquire shares in their company’s capital). Finally, it should also be noted that, in January 2020, institutional investors mobilised 6 billion euros of “growth equity” for the next three years, targetting digital startups.

A strong presence in Europe and globally

At an international level, the French government’s announcements have been so numerous that one can question whether there are enough resources and energy available to carry all projects.

First, on taxation, the question of how to deal with the GAFAM haunted the OECD’s work for years and caused tensions between France and the US. In this area, France has remained honorably constant, standing up for the principles included in the Base Erosion and Profit Shifting initiative. As a result of the difficulties faced by the OECD in moving forward with this initiative, France defended the idea at the Council of Europe. Without much support, France created a provisional tax of 3% on turnover, even though its implementation was delayed due to the American retaliatory threats.  

The president of the Republic also sought to position France as a regulatory leader on artificial intelligence through the French-Canadian statement on artificial intelligence, aiming to create an International Panel on Artificial Intelligence to support and guide the responsible development of artificial intelligence. This was aligned with analyses presented in the national AI for humanity strategy.

Other national initiatives include the Paris Call for Trust and Security in Cyberspace, launched during the Paris Peace Forum, and Tech for Good, a meeting before the Viva Tech Summit (a French technology and startup forum) gathering 50 national and international CEOs to discuss and commit to the common good. 

At the European level, during the nomination of the new European Commission, France had the great opportunity to name an Executive Vice-President with an extended mandate, including digital and competition. Unfortunately, the rejection of the first French candidate Sylvie Goulard led to a reduced portfolio for Thierry Breton, the selected French Commissioner.

Which path for the future?

Never in History has France had at its highest state-level position such competencies in innovation and technology. However, two particularly blocking factors should be overcome to unlock the country’s potential. On the one hand, moving forward with structural reform in higher education, a topic on which no major changes have been carried out since the Liberties and Responsibilities of Universities bill of 2007. On the other hand, creating a real momentum to transform public action to fit the digital age. The President cannot drive innovation alone, and a better governance of digital issues has become a prerequisite to adapt the country to this new era.

 

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