PRESS RELEASE
28 November 2024
Communication to the finance committee of the national Assembly
10 YEARS OF PUBLIC POLICY IN FAVOUR OF
INDUSTRY: RESULTS THAT ARE STILL FRAGILE
Against
comparable
European
countries,
France
experienced
a
faster
rate
of
deindustrialisation between 2000 and 2010. Following the Gallois report in 2012, France
gradually changed its strategy. The actions taken have come in a variety of forms, with
contrasting results in 2024. Against this backdrop, the National Assembly has asked the
Court of Accounts to review ten years of public policy in favour of industry. The Court took
stock of the strengths and weaknesses of French industry, analysing the objectives and
resources mobilised between 2012 and 2022 for cross-cutting policies, as well as the results
achieved, and formulated eight recommendations.
Deindustrialisation more marked in France, but stabilising recently
After declining more sharply than our neighbours between 2000 and 2010, the economic
weight of industry, including energy and manufacturing, stabilised at around 14 % of GDP
between 2011 and 2019, rising to 15 % of GDP by 2023 thanks to a rebound in the energy
sector. Manufacturing has stabilised at between 10 % and 11 % of GDP. Industrial production
was affected for a long time by the 2008-2009 crisis, with a return in 2013 to 2007 levels, and
by the health crisis, with a return in 2022 to 2019 levels, in value but not in volume. Industrial
employment, stable at 10 % of total employment, has been increasing since 2017. Nearly 75 %
of it is located outside metropolitan areas, making industry an important lever for territorial
cohesion.
France, the third-largest industrial country in the EU, has seen its industrial growth lag behind
that of Germany and Italy. Between 2000 and 2019, industrial value added increased by
20 %, 61 % in Germany and 28 % in Italy. French industry's share of European exports has fallen,
and the trade balance with EU countries deteriorated between 2012 and 2022. Industry has
concentrated on certain sectors: aeronautics, chemicals-pharmaceuticals and agri-food; the
share of automotive and electrical products has declined.
Major efforts to boost business competitiveness
The measures taken since 2014 have narrowed the gap in companies' cost competitiveness with
that of other European countries. As a result of the Competitiveness and Employment Tax Credit
(CICE) and the reduction in social security contributions, the hourly cost of labour is equivalent
to that in Germany, whose industry can, however, rely on a higher range positioning. Hourly
costs are still higher than in Italy or Spain. Similarly, the reduction in the rate of corporation tax
and production taxes has lowered the effective rate of corporate taxation in France from 35 % in
2019 to 25 % in 2022, reaching a level close to the European average. Industrial companies are
still penalised by production taxes such as the CVAE and C3S, which are not linked to their
profitability. In addition, the end of the regulated access mechanism for nuclear electricity
(Arenh) in 2026 and the increase in energy prices pose a significant risk to industrial
competitiveness.
Non-cost competitiveness is hampered by structural handicaps. The contraction of industry is
limiting the ability to fund research, which is not translating sufficiently into innovation. Its
image remains poor, which is detrimental to the attractiveness of its courses and professions.
To reduce recruitment pressures, a sustainable training support scheme for employees in the
industry should be defined in conjunction with the professional sectors and local authorities.
The improvement in economic attractiveness remains fragile. Projects in France involve fewer
site creations than in Germany and the UK, and the business environment can still be simplified,
particularly the authorisation times for industrial site projects.
Public support not always targeted at industry, increasing since 2020 but of uneven
effectiveness
The Court has estimated public support for industry from 2012 to 2019 at €17bn per year and
from 2020 to 2022 at €26.8bn per year, excluding equity interventions. Most of this support
takes the form of tax expenditure and reductions in social security contributions. Cross-cutting
policies to support the energy sector, R&D, employment, training and innovation account for
86 % of the cost to the State budget. Industry is the main beneficiary of the research tax credit,
which could be better targeted, as well as support for part-time work, foreign trade and energy-
intensive businesses. Monitoring of equity investments by the Agence des participations de
l'État and Bpifrance, which amount to €2.2bn a year, should be improved. The results of the
successive plans to support reindustrialisation or digitisation over the period under review have
been inconclusive. As for the future investment programmes (PIA), from 2010 to 2019, their
impact on industrialisation remains limited. Since 2020, the France 2030 programme has
developed subsidies for industrial projects. Its interventions should be more targeted and give
priority to the most effective instruments, such as repayable advances or financial instruments.
An industrial strategy in need of further development
The industrial strategy must be based on macroeconomic and horizontal policies favourable to
the competitive environment of companies, and be integrated with policies on training, energy
transition, environmental protection, research and innovation and sectoral policies, without
being reduced to aid for companies. It must also be coordinated with the actions of local and
regional authorities, whose role is decisive in terms of access to land and support for industrial
projects and ecosystems.
The European dimension should be strengthened. The Draghi report, published in September
2024, recommends aligning trade, competition and industrial policy to guarantee Europe's
strategic autonomy, and expanding European programmes to support innovation and projects
of common European interest (IPCEI), which should be prioritised. Finally, a more strategic
dialogue with stakeholders is needed, with greater attention paid to territorial impacts and
sectoral disparities through appropriate indicators.
Read the report
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