No Entrepreneurs, Please; We’re French

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.”