Report
Patrick Artus

Why has France deindustrialised?

We will compare France, Germany and the euro zone as a whole. France’s deindustrialisation began after the turn of the century . How can this be explained? We look at the French situation and compare it to that of OECD countries. In principle, can deindustrialisation be explained by: Insufficient research and innovation? Insufficient corporate modernisation? An increase in production costs, a loss of competitiveness, which may be due to wages, taxation and working time, when it is no longer possible to devalue? Obstacles to investment (financing, regulations, etc.)? A decline in labour force skills, which moreover is strongly correlated to other possible causes of deindustrialisation? All things considered, France’s deindustrialisation seems to be primarily due to ( this cause is present in France and applies to OECD countries) the low level of innovation and low labour force skills. The usual theory is that France has suffered from the upward trend in its production costs (wages, taxation, working hours) when it was no longer possible to devalue and from regulations (industrial standards, etc.) that hamper industrial investment. Here we see that it is the innovation and skills issues that are actually important.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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