According to a study by consulting firm AT Kearney, the attractiveness of the Hexagon to foreign investors has increased in 2018, making the country ranked fifth in the world. The movement of “yellow vests” did not affect the opinion of decision-makers.
It was a major fear of the executive as well as the business community: at the height of the “yellow vests” crisis, several voices were raised to denounce the disastrous effect of the images of violence on the sidelines of the demonstrations. the attractiveness of France. “The attractiveness of the country has collapsed,” lamented the president of Medef International , Frédéric Sanchez, who considered that “when you are in the United States, you have the impression that France is in civil war.” “To regain lost market shares, it’s complicated,” worried the representative of the employers. The same goes for Bercy: for Bruno Le Maire, the social movement “has a cost for the growth and attractiveness of France”.
And yet, as the movement of “yellow vests” reaches its limits , these fears seem to be invalidated by the facts. According to the latest edition of AT Kearney’s strategy consulting firm index aimed at assessing the attractiveness of states for investors, France has even seen its coast climb up to the business community this year. The Hexagon enters for the first time in the leading quintet, in fifth place, behind the United States, Germany, Canada and the United Kingdom. The Hexagon steals the place of the Chinese giant, affected by the trade war , the slowdown in growth and concerns over the level of indebtedness of domestic companies. Struck by alarge-scale economic slowdown , Japan also fell back in the rankings.
“Investor confidence has slightly increased since the election of President Emmanuel Macron in May 2017,” the cabinet notes, for which “recent anti-government demonstrations like” yellow vests “across the country have not affected the opinion of economic decision makers. The latter remain focused on substantive changes and ongoing reforms, including the Pact Act, validated in April at the Assembly. For the firm, “improving the business environment has been a top priority for the government,” and these ongoing transformations, along with lower corporate taxes, provide a solid foundation for reassuring decision makers.
“France remains competitive in terms of indicators to invest,” concludes the firm, which highlights the assets of the Hexagon in terms of innovation, advanced technology and tax rates (thanks to the trajectory to the decline decided by 2025). So many assets that the country enjoys, for example by attracting funds from the US pharmaceutical titan Merck & Co, which put $ 3.25 billion on the table to swallow the group Antelliq, specializing in animal health.
Concerns on a global scale
These conclusions are in line with the estimates of other experts interviewed by Le Figaro a few weeks ago. At the time, the head of the barometer on the attractiveness of France’s EY audit firm, Marc Lhermitte, explained that the situation was “problematic but not dramatic”: an investor indeed reflects rather on the long term and favors the substantive transformations affecting a country rather than its punctual events, as long as these do not alter the reforms defended by the executive. “In the medium term, the question remains whether the government can continue the transformation of the French economic and social model with reforms such as the reduction of corporate tax, pensions, public spending, the cost of labor” , the expert said.
The decline in foreign direct investment (FDI) in France does not worry too much the consulting firm: this trend is indeed visible worldwide, and does not augur a decline in attractiveness for the country. The global context remains troubled: “investors believe that risks are increasing in developed markets,” the report notes, citing political instability, geopolitical tensions, the economic slowdown and trade conflicts as factors of instability. If 62% of investors remain optimistic and even more optimistic than last year, this figure is down compared to 66% of the previous edition of the index. In addition, the outlook is more attractive in Asia-Pacific than in Europe and Eurasia,
Details on the ranking methodology
To estimate and rank the attractiveness of nations, the firm conducted a survey in January 2019 with senior executives and regional and commercial managers of companies with annual revenues of at least $ 500 million. The final index is a weighted average of the number of responses on the probability of making a direct investment in a domestic market over the next three years. Only companies based on a foreign market are used to calculate the attractiveness of a country: thus, for France, no national company has been studied.