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  • Innovation:
    France's Got Talent

    Report - October 2021


  • Gilles Babinet, Advisor on Digital Issues, Institut Montaigne
  • Francis Hintermann, Global Managing Director, Accenture Research


  • Julien Chartier, high official (rapporteur général)
  • Bridget Fitzgerald, consultant (rapporteur) 

Task force

  • Loan My Descourvières, StartUp & Technology Incubator Director, Valeo
  • Matthieu Eyriès, Director, Air Liquide Venture Capital (ALIAD)
  • Diana Mangalagiu, PhD, Professor, Neoma Business School and Oxford University
  • Tristan-Pierre Maury, PhD, Economy Professor, Edhec Business School
  • Mariette Oudin, EMEA Business Incubation Leader, Schneider Electric Ventures
  • Laurent Schmitt, CEO of the BOLD Corporate Venture Fund, L’Oréal
  •  Isabelle Thizon-de-Gaulle, Director of Scientific Relations and R&D Initiatives for Europe, Sanofi
  • Florence Verzelen, Executive Vice President, Dassault Systèmes

Institut Montaigne team

  • Éléonore Casanova, Assistant Policy Officer
  • Blanche Guinard, Assistant Policy Officer
  • Théophile Lenoir, Head of the Digital Programme
  • Anuchika Stanislaus, International Affairs Officer

Institut Montaigne would like to thank Diana Mangalagiu, PhD, Professor at the Neoma Business School and Oxford University, Tristan-Pierre Maury, PhD, Economy Professor at the Edhec Business School, as well as the Accenture Research team for their help with the quantitative study:

  • Lucie Dussert, Research Analyst
  • Julie Josquin, Data Platform & Visualization Specialist
  • Deeksha Patnaik, Research Associate Manager
  • Praveen Tanguturi, Global Artificial Intelligence Research Lead
  • Hélène Vuillamy, Research Analyst
  • Yuhui Xiong, Research Manager

  • Mohamed Abdesslam, Investment Director VC, MAIF Avenir
  • Patrick Aebischer, Former President, EPFL
  • Joakim Appelquist, Deputy Director General, Vinnova
  • Rodolphe Ardant, CEO, Spendesk
  • Marc Auberger, Managing Partner, Iris Capital
  • Jean-Marc Bally, Managing Partner, Aster Capital
  • Elisabeth Bargès, Public Policy Senior Manager, Google
  • Tyson Barker, Head, Technology and Foreign Policy, German Council on Foreign Relations
  • Agnès Bazin, Chief Development Officer, Doctolib
  • Suzanne Berger, Institute Professor, MIT
  • Bruno Berthon, Senior Digital Transformation Fellow, Senior Advisor, INSEAD
  • Laurent Bertonnaud, Head of Public Affairs – France, BNP Paribas
  • Sébastien Beyet, Co-Founder and CEO, Agicap
  • Alain Bloch, Scientific Director of the Entrepreneurs MSc, Ecole Polytechnique-HEC Paris
  • Olivier Bordelanne, Partner, Demeter
  • Cyril Bourgois, Group Chief Digital Officer, Casino
  • Jan C. Breitinger, Dr, Project Manager, Program Shaping Sustainable Economies, Bertelsmann Stiftung
  • Roman Bruegger, Managing Director, Swiss Edtech Collider
  • André Catana, Head of the Startup Unit, EPFL
  • Ann Cathrin Riedel, Manager Digital Transformation & Innovation, Friedrich-Naumann-Stiftung für die Freiheit
  • Chris Caulkin, Managing Director and Head of Technology for EMEA, General Atlantic
  • Eric Chaney, Economic Advisor, Institut Montaigne
  • Xavier Chopard, Director - Business Center Ile-de-France Innovation, BNP Paribas
  • Sarah Cledy, Policy Analyst, Google
  • Philippe Collombel, Co-Founder and General Partner, Partech
  • Emmanuel Custodero, Scientific Director, Michelin
  • Enrico Deiaco, Research Director, Swedish Entrepreneurship Forum (Entreprenörskapsforum)
  • Johan Eklund, CEO, Swedish Entrepreneurship Forum (Entreprenörskapsforum)
  • Isabella de Feudis, Chief Executive Officer, Swedish Private Equity & Venture Capital Association (SVCA)
  • Paul-François Fournier, Innovation Executive Vice-President, Bpifrance
  • Benjamin Haddad, Managing Director, Technology Innovation, Strategic partnerships, Accenture Ventures
  • Dorothée Julliand, Director WAI - We Are Innovation, BNP Paribas
  • Erkki Karo, Professor, TalTech
  • Gérald Karsenti, Chairman, SAP
  • Patrice Kefalas, Head of Innovation and Partnerships, Michelin
  • Martin Kenney, Distinguished Professor           , University of California, Davis
  • Jean-Philippe Lallement, Managing Director, EPFL Innovation Park
  • Mark Lazar, Programmes Director, PUBLIC
  • Bernard Le Masson, former Managing Director, Strategy Public Service, Accenture
  • Olivier Letessier, Vice President, Research & Development, Air Liquide
  • Bernard Liautaud, Managing Partner, Balderton
  • Cyril Magliano, Chairman, Systemis
  • Denis Mercier, Deputy Executive Director, Fives
  • Sébastien Meunier, Vice-Chairman Public Affairs, ABB France
  • Laurent Monet, Senior Advisor, BNP Paribas
  • Jordi Montserrat, Co-Founder and Managing Partner, Venturelab and Venture Kick
  • Jean-Luc Moullet, Deputy CEO in charge of Innovation, CNRS
  • Julien-David Nitlech, Managing Partner, Iris Capital
  • Olivier Pailhes, Co-Founder, Aircall
  • Mathias Pastor, former Director, The Family
  • Sophie Paturle-Guesnerot, Managing Partner, Demeter
  • Antoine Petit, Chief Executive Officer, CNRS
  • Christian Raisson, Co-CEO, ManoMano
  • Delphine Remy-Boutang, Founder & CEO, the bureau - JFD, Chair, Global Entrepreneurship Network
  • Philippe Renaud, Professor, EPFL
  • Jean-François Ricci, Senior Advisor, EPFL
  • Christian de Sainte Marie, Program Manager, IBM
  • Jan Sandred, Program Manager, Vinnova
  • Guillaume Sauvage de Saint Marc, Sr Director Engineering, Emerging Technologies & Incubation, Cisco
  • Yonit Serkin, Managing Director, MassChallenge
  • Romaric Servajean-Hilst, Associate Professor and Researcher in the Strategy Department, Kedge Business School
  • Nicolas Sultan, Managing Director - Communication, Media and Technology, France and Benelux, Accenture
  • Peter Svensson, Analyst, Growth Analysis
  • Sten Tärnbro, Analyst, Swedish Private Equity & Venture Capital Association (SVCA)
  • Suat Topsu, President, Erganeo
  • Manuel Trajtenberg, Dr, Professor, Head of the Institute for National Security Studies (INSS), Tel Aviv University
  • Oliver Väärtnõu, CEO, Cybernetica
  • Francis Verillaud, Special Advisor, Institut Montaigne
  • Stuart Wilkinson, Head of Knowledge Exchange and Impact Team, Oxford University
  • John Zysman, Professor Emeritus of Political Science, Co-Director, Berkeley Roundtable on the International Economy, University of California, Berkeley

French unicorns have been on the rise. In 2017, there were only 3 such companies, a.k.a. startups that are valued at more than €1 billion. Within four years, as of October 14th 2021, that number has shot up to 19. The United Kingdom is still well ahead, with 31 unicorns under its belt. However, France now ranks second on the list of the largest start-up ecosystems in Europe, on par with Germany.

Strong state support has been key to this rapid evolution, as the French government was quick to disburse the funding necessary for startup growth.

However, while financially supporting start-ups clearly delivered, talent shortage remains a real challenge. In a highly competitive international environment, France still lacks a professional training that is fit for the new economy. The lack of diversity in talent and the gap between research and entrepreneurship further reduce the country’s capacity to innovate. As a key driver of growth, investment in human capital must become a priority for France if it wants to strengthen its innovation ecosystem.

In partnership with Accenture, Institut Montaigne conducted extensive data collection across 10 countries, and more than 50 interviews with private actors and French and international experts. As a result, we have put forward nine recommendations for how to make France a key player in European innovation.

France's late start in the race

France initially struggled to enter the startup race. The first public policies providing funding and guidance for start-ups were only implemented in 2010. Between 2010 and 2015, fewer than 400 French startups received seed-stage funding, compared to more than 500 in Germany, and almost 1,000 in the UK over the same period.

In addition, Europe itself is persistently behind the US and Asia. As recently as 2020, the total amount of venture capital funds raised in Europe was $41 billion, compared to $74 billion in Asia, and $141 billion in the US.

How do start-ups emerge?

A boost from public authorities

During the 2010s, France pursued a catch-up strategy to bolster innovation through an unprecedented mobilization of public funds, mainly focusing on entrepreneurship.

In 2012, the creation of the Public Investment Bank (Bpifrance) brought together various public funds to support research and investment. Thanks to its capacity to provide grants, material and real estate investments, or equity, Bpifrance became the central player in start-up financing. Its resources have almost doubled in 7 years, going from €17.3 billion in 2013 to nearly €30 billion in 2020.

In 2013, one year after the creation of Bpifrance, the "French Tech" label was launched to crystalize the French start-up ecosystem and promote its entrepreneurs. Labeling hubs as French Tech enables the public authorities and potential investors to identify the environments favorable to the development of French start-ups.

A number of public funding mechanisms have followed suit, such as the French Tech Exchange and the French Tech Acceleration fund. The French Tech Next 40 and French Tech 120 programs were launched in 2019, with the aim of bringing together the 40 and 120 most promising scale-ups (hyper-growth start-ups) each year. Together, these initiatives have bolstered the visibility of the start-ups with the strongest potential for international growth, enabling them to develop a network of investors, customers and partners.

Restructuring the ecosystem in this way has encouraged the development of local, public and private initiatives. In 2021, France counts over 100 accelerators and incubators, compared to only 30 in 2012. Among them, Station F, which opened in Paris in 2017, is now the largest incubator in the world and certainly emblematic of French Tech.

A favorable environment for private funding

This massive allocation of public resources towards start-ups has had a decisive leverage effect on the development of private funds in France.

Public subsidies, co-financing and guarantees have largely encouraged commercial banks to become more involved in the financing of innovative start-ups, both by developing their expertise in the matter, as well as by creating seed accelerators.

Public financial support has also been instrumental in the development of venture capital. The Fonds national d'amorçage (FNA, the National Seed Fund) is a fund of funds managed by Bpifrance, aiming to invest in private seed funds. A key actor in the development of venture capital in France, it is responsible for the investment of 29 private venture capital funds, averaged at  €43.4 million, and supported a total of 483 companies in 2019.

Ambitious tax and regulatory reforms redirecting French savings towards investment have also been implemented. The government’s goal was to shift the historically high savings of French citizens towards investment in company shares and stocks, by reducing investment costs and by taxing real estate. In total, between 2008 and 2018, the annual amount of tax aid directed to innovation rose from €4.1 billion to €6.7 billion.

In 2020, French start-ups raised an unprecedented €5.4 billion. But this funding-driven strategy cannot fully bear fruit without adequate investment in human capital and research.

Human capital, an essential part of the innovation ecosystem

A lack of diversity

The growing digitalization of the economy has resulted in new labor market needs. Jobs such as Content Manager, Customer Success Manager or Business Developer have been identified as key to fostering the development of start-ups. However, there is still a significant gap between these needs and what French higher education can provide.

The vast majority of French unicorn founders come either from business schools or have engineering backgrounds - in stark contrast to Germany or the UK, where half of unicorn founders have a background in computer science. German and British start-up founders also have more varied academic backgrounds, with training in science, mathematics, and law.

As far as gender equality is concerned, female representation in start-ups in France and in Europe remains extremely low. In 2020, 85% of the founding teams of European start-ups were male, a prevailing trend in the world of corporate R&D.

This lack of diversity is also reflected in the low number of international profiles and backgrounds among the entrepreneurs. Only 16% of start-up founders in France have studied abroad, and only 3% are foreign nationals. The rate of foreign researchers is slightly higher in companies, but only at 6%. That’s all the more striking given that 39% of young PhD candidates in France are foreign nationals. Diversifying the talent pool will thus be instrumental to improving the performance and openness of the French innovation ecosystem in the years to come.

Bringing students and researchers into the world of entrepreneurship

Teaching, research and business still operate in silos and the culture of entrepreneurship is underdeveloped among French university students. To that end, some 30 Student Centers for Innovation, Transfer and Entrepreneurship (PEPITE) were created in 2014. Aimed at bringing together higher education institutions and economic actors, these centers serve as an entryway for students into the world of entrepreneurship and innovation. Nonetheless, their capacity has remained overall limited, in part due to insufficient funding.  

Though researchers are increasingly interacting with the business world, that is not the case across all sectors. Half of the talent is concentrated in scientific and technical activities, computer and information services, the automobile industry and aerospace construction, while programs such as social sciences still have far too little contact with the world of business research and entrepreneurship. Moreover, the majority of researchers tend to join large companies and too few of them end up creating start-ups of their own.

Breaking down the walls between the worlds of research and entrepreneurship, and encouraging students, researchers and professionals to engage with the field of innovation requires state support. Through competitive calls for projects or programs such as the Programmes d'investissement d'avenir (PIA) or the Fonds pour l'innovation industrielle (FII), the state can stimulate breakthrough innovation and encourage researchers to become more involved in entrepreneurial projects.

Anchoring start-ups in universities thus implies increasing their funding. While France only spends about $60,000 in purchasing power parity per student, the United Kingdom and the United States spend $70,000 and $80,000 per student respectively. Total annual spending on higher education per student is also higher in Germany than in France.

France also lags behind when it comes to R&D funding. In 2017, France allocated only 2.2% of its GDP to R&D, far from the 3% target set in 2000 by the Lisbon Strategy for the knowledge-based economy, below the OECD average of 2.4%, and far behind Germany or the United States. In line with what Institut Montaigne recommends for the reform of higher education in France, a substantial financial effort for higher education and research is a prerequisite for expanding the pool of innovative French start-ups.


In detail Sustaining efforts to finance innovation by adding personal savings to existing funds In detail

Create an innovation savings account ("Livret I") with user-friendly standard operating rules, available in all major financial networks, which is to be entirely tax-exempt. This account should support the existing mobilization of funds in the French and European innovation ecosystem - particularly well documented in recent years - while allowing individuals to reap the return benefits of tomorrow’s economy.

In detail Investing in human capital In detail

A national survey should be conducted yearly to figure out what skills will be needed over the next 10 years. Higher education should be adapted accordingly. Successful start-ups manage to attract and retain all essential talent (scientific, technical, user experience, developers, AI experts, etc.). This annual survey could help higher education institutions adjust their programs, while also encouraging cross-curricula activities and high-level teaching in English.

To that end, broadening the range of start-up creators to include as many talented profiles as possible will be key, by:

  • Encouraging more university students to embark on entrepreneurial paths, as they tend to have more diverse backgrounds than students from the elite higher education establishments ("grandes écoles"). Notably, making PEPITE hubs (student centers for innovation and entrepreneurship) the strategic points for guiding students towards entrepreneurship will be key. This means adapting how PEPITEs are run and setting an objective to increase the number of student-entrepreneurs sixfold over the next four years;
  • Welcoming international talent by doubling the number of French Tech Visa recipients over the next two years;
  • Promoting the integration of foreign students into the world of French entrepreneurship;
  • Promoting talented profiles from across the country, including those outside the traditional education system, by doubling the number of annual recipients of the French Tech Tremplin (Springboard) incubator program over the next two years.
In detail Strengthening the ties between research and entrepreneurship In detail

Implementing ambitious policies to promote and encourage researchers in public laboratories to create innovative companies. More generally, promoting a culture of research dissemination in society and in the economy, and taking this into account in the assessment of research institutions by the HCERES (High Council for the Evaluation of Research and Higher Education) and in the assessment of researchers by the National Council of Universities (CNU).

Promoting a culture of competitive project selection based on the American DARPA committee model, while relying on existing operators and being mindful to not create new administrative structures.

Implementing, finally, a financial plan of 5% of GDP allocated to higher education and research by 2030, in order to enable France to grow its pool of start-ups in universities and research.


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