France: Why have industrial companies not substituted technological capital for labour?

France is characterised by high labour costs and low real long-term interest rates: all conditions should therefore be met for industrial companies to substitute technological capital for labour in order to maintain their competitiveness. But that has not happened, and French industry’s cost competitiveness has remained poor, a disadvantage that is all the more significant now that, in the wake of the COVID crisis, companies are looking to produce in low-production-cost countries to restore their profitability. Why is French companies’ technological investment so low? Perhaps because of: Low labour force skills; Low profitability that limits investment; The use of offshoring rather than investment in modernisation.