INNOVATION AND INDUSTRIAL RENEWAL IN FRANCE IN COMPARATIVE PERSPECTIVE

Abstract

Conventional images of the French political economy portray a country stuck in a regressive dynamic, which hinders the construction of competitive industries. Recent developments question this interpretation of the French production regime: labour productivity and corporate profitability are high, the country has known an export boom, and has become the largest recipient of foreign direct investment on the continent. This paper attempts to analyse and explain these successes in French economic performance. It argues that the reorganization of the French economy owes much to a shift in the operation of the state-centred corporate governance system. While the state withdrew from direct involvement in the economy, it utilized its influence directly to pressure large firms to restructure internally, giving them the space to do so. The paper examines shifts in patterns of work organization, skills formation and firm-supplier networks as sources of increased competitiveness, along with shifts towards regional production networks within metropolitan France that have given new forms to the national innovation system.

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