When a foreign company locates to the Paris Region, it automatically generates jobs. It also helps create or safeguard a raft of directly or indirectly related jobs (the company’s suppliers, real estate agencies to help with employees housing and so forth). Such foreign direct investment makes an effective and very tangible contribution to economic recovery, comments Denis Tersen, Chief Executive Officer of Paris Region Economic Development Agency (PREDA).
A survey published by European Cities Monitor revealed that Paris is considered to be the top destination for potential expansion into Western Europe by senior managers with its quality of life remaining one of its major advantages.
The 10 most attractive European cities in which to locate a business
2009 (2008) City
1. (1) London
2. (2) Paris
3. (3) Frankfurt
4. (5) Barcelona
5. (4) Brussels
6. (7) Madrid
7. (9) Munich
8. (6) Amsterdam
9. (8) Berlin
10. (13) Milan
While cash flow from foreign direct investment activities declined globally in 2009 by 17 percent, foreign investment in Paris Region was relatively unaffected by the crisis.
Although the number of newly established multi-nationals (startups, expansions and takeovers) fell by eight percent, the number of jobs created remained stable due to the company size: 8,286 in 2009 versus 8,300 in 2008.
The Paris region has been fairly unaffected by the economic crisis that hit global economies last year. This can be credited to two factors: the resilience of a metropolitan area, bolstered in particular by networks and denser populations which help maintain business activity but also with Paris diversified economy. The Paris Region’s economy is competitive and innovative. Above all, companies setting up in the area gain access to vast local, national and European market opportunities, with 500 million consumers.
With 191 projects in 2009, the Paris Region accounted for 30 percent of newly established businesses and 28 percent of new jobs created in France. Services, IT, electronics and energy are the four sectors that have generated more than 50 percent of the projects.
Another of the region’s assets is unquestionably the diversity of its economic fabric which covers a vast spectrum of activities, from highly innovative sectors such as biotechnologies, nanotechnologies, wireless technology and 3D animation graphics to traditional industrial activities including aeronautics and the automotive sector.
These diverse economic sectors are driven by vigorous R&D activity, boosted by the creation of competition clusters which have opened up new opportunities for cooperation between the public sector and private enterprise. In 2009 13 R&D centres were created in the Paris Region compared with just two in 2008. This is a significant improvement brought about by research-related tax credits and the effectiveness of the region’s competition clusters.
The region has multiple areas of specialisation based around a wide variety of centres of excellence. This diversifies risk and fosters an interdisciplinary approach to technology. “The Paris Region also develops industry-service partnerships. All of this serves to rebuild the post-crisis economy,” comments Denis Tersen.
The clothing sector was very dynamic in 2009 largely as a result of the establishment of the Japanese company Uniqlo in Paris. Policy centres represented 45 percent of the foreign companies locating to the Paris Region in 2009 and 75 percent of such companies in France.
The jobs created by foreign companies in the Paris Region in 2009 were to a large part by the US and European companies; Germany, the United Kingdom and Japan invest massively in the region’s economy with 48 percent of projects in Paris Region resulting from this investment. In 2009 the US consolidated its position as the country with the highest number of companies in the Paris Region.
The percentage of companies from emerging markets or Asian countries increased significantly with 63 percent of Japanese companies setting up in France in 2009, choosing to locate to the Paris Region, which was also home to 91 percent of Japanese jobs in France. Such enthusiasm for the Paris Region spread to other Asian companies, which provided 27 percent of new jobs in the region in 2009. This trend offset the sharp drop in investments from the Middle East recorded the same year.
In addition to the Uniqlo and Daiichi-Sankyio projects, 13 other Japanese companies expanded into the region, generating an average of 40 jobs each: Fujitsu Service (60 jobs), Horiba Europe (40), Yamaha Motor France (40), Arkray France (30) and Ness Enfants (30). China more than doubled the number of companies locating to the Paris Region (+350 percent compared with 2007), primarily as a result of Huaweiís R&D centre. Lastly, India is one of the 10 countries that generate the most jobs in the Paris Region.
Post-crisis reconstruction
In 2009, PREDA did all it could to help promote remedies to the crisis and accelerate their implementation. To revitalise the economy, PREDA focused its attention on projects with a strong sustainable development dimension or that were vectors of innovation. As a result, major US stakeholders in photovoltaic energy such as SunEdison and Unisolar, as well as a significant number of research centres such as Intel (USA), Huawei (China), Horiba (Japan) and Algentech (UK), established operations in the Paris Region.
“For the Paris Region to remain competitive, particularly vis-a-vis its main competitors – London, New York and Tokyo – we need to anticipate the requirements of foreign businesses wishing to expand internationally”, explains Denis Tersen, Chief Executive Officer of PREDA.
The Paris Region Economic Development Agency (PREDA) has therefore stepped up its business development and promotional efforts abroad and has established close and productive relationships with companies for whom it is providing increasingly tailored assistance, such as putting foreign companies in contact with their local economic partners, or arranging themed visits to The Paris Region.
For more info: www.paris-region.com
About the Paris Region Economic Development Agency
Paris Region Economic Development Agency (PREDA) matches businesses’ needs with the regional offering. PREDA’s remits focus on the achievement of three main goals: Creating and safeguarding jobs in the Paris Region; enhancing the Paris Region’s economic attractiveness; supporting areas in the region affected by economic changes.
PREDA has developed an array of services to assist businesses looking to set up and grow their business in the Paris Region. These services cover all the main aspects involved in setting up: seeking premises and recruiting staff, advice on tax and legal matters, identifying commercial partners and R&D, media promotion and practical day-to-day information.
These services are provided in close collaboration with the regional departments assisting these projects with sites and operational support.