The FDI angle:

• Île-de-France, often referred to as Paris Region, is France's biggest magnet of FDI. 
• Brexit, the 2024 Summer Olympics and reshoring have all enhanced the region's investment proposition. 
• We want to reindustrialise and we want to stop industry going to the US and China.
• 'We are now working a lot to attract investors to rebuild factories in former industrial territories that have lagged since the factories closed,' says Île-de-France's president, Valérie Pécresse. 

France has witnessed a steady growth in greenfield foreign direct investment (FDI) in the past few years. Last year alone, foreign investors pledged the highest level of capital investment since the financial crisis in 2008, according to greenfield investment monitor fDi Markets.

At the heart of it stands Paris and its region, Île-de-France. The Olympics coming to Paris in 2024 gives it a chance to add new investment momentum. Local authorities have been upping their FDI strategy ahead of the Games. Valérie Pécresse, who has served as president of the regional council of Île-de-France since 2015, outlines the transformative shifts underway and her efforts to stop industries from leaving France for China or the US.  

We want to reindustrialise and we want to stop industry going to the US and China.

Valérie Pécresse, president, Île-de-France

Q: What has been driving Île-de-France’s transformation? 

A: We have had three big events that are changing the face of Île-de-France. The first was Brexit, as several companies relocated from the UK to Paris as part of their strategy to keep a foothold in the EU. We had 7000 new jobs created and tens of big firms setting up offices in Paris. And for the first time, the overall market capitalisation of the Paris Stock Exchange overcame that of the London Stock Exchange. As of March 30, the overall market capitalisation for the CAC 40, Paris’s main stock index, was $70bn higher than that of its British contemporary, the FTSE 100.

The second big event is the Olympics and Paralympics in 2024. We have put billions of euros on the table to rebuild and refurbish sports infrastructure and build new neighbourhoods around that infrastructure.

The third one is the launch of the Grand Paris Express, a huge transportation network whose first parts will start operating in 2024 and will be completed in 2031 with 300km of new metro lines, 70 new stations and millions of square metres of housing and commercial real estate to be built around those. 

Q: Do you see any weakness in your investment proposition that is yet to be addressed? 

A: One of the weaknesses that everybody has at the moment is a workforce shortage. We have a big talent pool — France is  very centralised and Paris makes up 40% of French researchers, 50% of French artists, about one third of our universities. Plus, the top schools are based here. Nevertheless, we still lack people, especially young executives, because the city is expensive and some of them prefer to get a job in the countryside to have a better quality of life.

We’re working on that and the region is investing a lot in training, especially in the digital area, because we also account for 50% of the jobs in the digital sector. Among other things, we recently opened the ‘Metaverse College’ — a higher education school focusing on metaverse applications.

Further reading on reshoring:   

• ‘If the industrial policy is better elsewhere, we will go elsewhere’
• Bottlenecks bedevil US investment projects
• 'It's costly, buyt they have to do it.'

Q: The US, as well as the EU, is spending efforts and resources to bring back manufacturing in strategic sectors. Is it an opportunity, or a threat for a geography that has already gone through a deindustrialisation process? 

A: We want to reindustrialise and we want to stop industry going to the US and China. As far as Île-de-France is concerned, we have been losing industrial jobs for decades.

When I was elected, I started introducing subsidies to attract new firms to build new industries. We have strong assets in research and development, so it’s easy to attract people who want to do innovation. But life and land in Île-de-France are expensive, which means that often prototypes are developed locally, and factories set up in the countryside.

We are now working a lot to attract investors to rebuild factories in former industrial territories that have lagged since the factories closed. We have targeted around 60 brownfield areas to transform and bring manufacturing back.

It’s a question of sovereignty. We want to produce our own energy and food; we want to be more autonomous.

This article first appeared in the April/May 2023 print edition of fDi Intelligence.