French competitiveness clusters unveiled

July 21, 2005

Brussels, 20 Jul 2005

French Prime Minister Dominique de Villepin has announced the six industrial clusters and 61 competitiveness clusters or 'pôles de compétitivité' that will receive funding 'in an effort to redraw and modernise the industrial map of this country'. The funds initially foreseen for this initiative have been doubled, from 750 million to 1.5 billion euro.

More than 100 applications were received for the funding - a combination of tax breaks and other credits for research and development - which will be distributed between 2006 and 2008. The government has also shown interested in channelling in funds from other sources such as the EU's Structural Funds and the Framework Programme for research.

Referring to the decision, the Prime Minister commented in a press conference that he wishes to increase economic growth by 'offering the best possible environment to those who take risks', and 'to integrate research and production as closely as possible in order to reinforce the competitiveness of businesses operating within France'.

The six industrial clusters identified as 'global contenders' and eligible for priority support, such as funds to hire more researchers, include a health cluster in the Rhône-Alpes region; an aerospace cluster around the cities of Bordeaux and Toulouse, where the passenger jet maker Airbus is based; a cluster around Paris for complex transport and navigation systems; a group for secure telecommunications technologies in the south of the country that will complement research done by the chip maker STMicroelectronics; and a nanotechnology cluster near the city of Grenoble.

The sixth cluster will be MediTech-Santé, which groups researchers and businesses around Paris and fits with the strategic priority to promote biotechnology development in France, a fragmented and geographically dispersed industry consisting almost exclusively of SMEs. The government believed that no one region had achieved the critical mass necessary to meet the 'international visibility' requirement for clusters, and was hence willing to make an exception to the rules.

To counterbalance the tension between the government's desire to build up internationally visible centres of excellence through geographical concentration of funding, and political pressure to ensure that each region had its share, Mr de Villepin also identified 61 further 'pôles de compétitivité' across the country. The initiative is part of France's wide-ranging industrial strategy, launched in 2002, which addresses the key factors behind industrial competitiveness, in particular research-led innovation. The aim is to address the threat from countries with cheaper manufacturing and labour costs by focusing on high value-added sectors.

France's policy reflects that of other EU Member States on competitiveness. Many are turning to sustainable economic development, while the European Commission is also seeking to strengthen competitiveness. The French government sees these 'pôles' as being part of a European network of similar clusters and would be interested in discussing collaboration possibilities with overseas clusters, including through the technology initiatives due to form part of the Seventh Framework Programme (FP7) and through Eureka. Links with the German Kompetenznetze are already under discussion.

Studies have shown that innovation is most successful when a number of different actors (including public and private sector research and development (R&D) centres) are located in close physical proximity, allowing rapid exchange of new results and ideas.

The government agreement on the clusters included the following:
- A three-year budget of 750 million euro;
- Ministries urged to allocate 25 to 30 per cent of their support funds to collaborative innovation projects;
- Businesses participating in collaborative R&D projects could be eligible for exemption from corporate income tax and for lower social security charges.

The competitiveness clusters policy seeks to anchor high value-added industry - and in particular industry decision makers - on French territory, hence reducing the vulnerability of French jobs in economic downturns; to project a modern image of France and hence attract investment.

When a call for proposals was launched, the idea was first to select a series of proposals addressing structuring technologies and industrial activities in which France is specialised or has proven potential. The clusters were also chosen on the basis of excellence regional diversity.

R&D projects put forward by a cluster, and geographically located in the cluster's 'R&D zone', will be eligible for full funding for public sector partners costs and up to 35 per cent of private sector partners' costs. Whether a particular R&D project is funded will depend on the amount of public money available, although projects forming a core part of the cluster's development strategy will have a higher chance of funding. Companies involved in cluster projects will be entitled to a rebate of social costs for employees working on the.

Final decisions were taken on the following criteria:
- the cluster's economic development strategy;
- the cluster's international visibility or potential to grow rapidly into a centre with an international reputation in technology and R&D;
- the degree of public/private sector partnership proposed by the cluster and the governance arrangements to ensure these partnerships lead to coherent strategy;
- the quality of R&D projects leading to new high value products.

In addition to the above-mentioned R&D support and tax exemptions, this funding will also contribute to administration and investment in infrastructure such as new buildings for cluster companies or institutions and ultrabroadband Internet access.

For further information, please consult the following web address: http://www.competitivite.gouv.fr/
Or consult the press dossier available from the Prime Minister's website: http:///www.premier- ministre.gouv.fr/IMG/ pdf/Dossier_CIADT.pdf

CORDIS RTD-NEWS / © European Communities
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