I hope everyone had a nice Thanksgiving, and for those celebrating this weekend (comme moi), enjoy the festivities!
The Economist has an interesting piece in this week’s issue that talks about the newly automated line 1 of the Paris metro system which was completely outfitted with new technology and revamped to make it driverless.
Besides having better and more service during rush hour and a lower risk of accidents (automated line 14, which I take quite often, has had no accidents since its launch in 1998), the modernization of services also results in a welcome side effect for many: these automated lines will not be affected by the occasional public transport worker strikes since there are no drivers (see excerpt below).
What is your view on technology and innovation in France? Do you think labor costs are too high and discourages employers from hiring more often?
“…Strict labour laws, costly payroll charges and erratic strikes seem to make French firms especially keen on technology. Supermarkets, for instance, have enthusiastically adopted self-checkout tills. “All French hypermarkets have adopted this strategy over the past few years,” says Alexis Lecanuet at Accenture, a consultancy. The idea is to speed up queues at peak times for impatient non-technophobes carrying light baskets. But it also cuts costs. “Self-checkout has worked better in countries where labour is expensive,” says Serguei Netessine, a professor at INSEAD, a business school.
France excels at high-tech services: credit-card operated petrol stations, touch-screen fast-food counters, automatic car-washing. Two years ago, McDonalds pioneered the use of touch-screen, credit-card-based ordering in its French fast-food restaurants. Eléphant Bleu, a self-service high-pressure car-washing chain, has 472 outlets in France, and is expanding. All this in a country where the labour code runs to over 3,300 pages, an employer pays an average of 39% in payroll taxes, and unemployment is at 10%. Spot the connection.”
French financial daily La Tribune reports that the Internet sector contributed to 3.7% of French GDP last year, worth 72 billion euros. It cites a report by McKinsey which states that the sector has created a net total of 700,000 jobs in France in the past 15 years.
At 14% annual growth, the sector should reach 5.5% of GDP by 2015, or 129 billion euros, creating another 450,000 jobs in France.
Moreover, companies that invest in new technologies (web sites, intranets…) have reaped the awards: “for every euro spent, they generated 2 euros in operating margins”, according to McKinsey.
The study was presented by Eric Besson, the French Minister for Industry, Energy and Digital Economy (Ministre de l’Industrie et du numérique) and co-fnanced by Google, which has participated in similar studies in the UK.