While Silicon Valley arouses fear and admiration across the world, D. Lacorne looks back at the history of a French political passion that runs from Charles de Gaulle to the current president and highlights the limits of French Tech.
“A start-up nation is a nation where everyone can say that they can create a startup. I want France to be one.” At the time of this statement, made at the end of June 2017 on the occasion of the inauguration of Station F, the largest startup campus in the world, Emmanuel Macron confided that he himself had imagined in the past taking the path of entrepreneurship. It is this enchantment of the highest echelons of the State for entrepreneurship that Denis Lacorne’s latest work focuses on. We are familiar with his reference works on North American political history, but it is a sort of counterpoint that he proposes here by no longer looking at the United States from France, but at France from the United States, through the old dream of a French-style Silicon Valley. De Gaulle and the calculation plan intended to support the Bull IT company against IBMPompidou amazed by the dynamism and ingenuity of the engineers of northern California, Mitterrand under fire from Steve Jobs’ criticism of the French educational model and enthusiastic about telematics (p. 138), Presidents N. Sarkozy and F. Hollande striving to promote “national champions”, up to E. Macron who drew the heart of his political program from them: from supposedly distinct partisan positions, all saw in the Californian horizon the promise of an industrial renaissance of the French territory.
Based on three types of sources, a literature review on entrepreneurship, a review of articles from the French and North American economic press, supplemented by around twenty interviews conducted in Silicon Valley with expatriate entrepreneurs, Denis Lacorne offers a return to this impossible continuum, with a particular interest in these recent developments. Keeping his distance from a technocritical position that would see Silicon Valley as the smiling face of predatory capitalism, the author takes seriously this daydream of the French Executive: is the libertarian, technophile and Darwinist spirit of Silicon Valley transposable within a country marked by a Colbertist tradition and a statist power structure? He answers it through a clear and didactic detour in two stages, the first centered on the formation of the “spirit” of Silicon Valley, the second focused on recent French attempts to import it.
The Spirit of Silicon Valley and the Psychology of Risk
Often presented as a model, Silicon Valley is the result of a historical, patient and composite construction, where a few names eclipse a work environment associating entrepreneurs, engineers, managers, investors and lawyers, around a dozen universities, of which Stanford and Berkeley are the bridgeheads. If business creations have been particularly on the rise since the 1980s, it was in the 1930s and 1940s that the author places the point of origin with the systematization of the transition of young researchers working on the development of new technologies, first in the field of transistors and then microprocessors, to small, fast-growing companies that they manage (pp. 22-23). This pursuit of research by other means, which makes engineering students the cog in the entrepreneurial dynamic, is found at the root of the successes of Hewlett Packard, Intel, Apple, Paypal, or Google.
D. Lacorne presents the “startup” as an appropriate organizational form, due to its flexibility and its capacity to follow sequenced growth cycles: the launch (“ launch “), the growth (” growth “), the advanced stage (” late stage ”) and the redemption (“ exit “), followed one another in a few years under the control of specialized investors, the ” venture capitalists » (VC). From this point of view, the “startup culture” corresponds to a combination of psychological traits that allow one to emerge on top of a fierce obstacle course, at the end of which, as one respondent points out, “80% of profits in venture capital are made on 3% of deals” (p. 203). The author distinguishes four components: the desire for creation, the valorization of risk – and its counterpart the downplaying of failure -, the pleasure principle and the art of pitch.
Based on field observations, D. Lacorne points out that these inclinations do not exist sui generis but arise from an educational path and professional socialization. From elementary school onwards, students in northern California are invited to work in groups on projects whose results are presented during competitions. pitches in front of professional juries in which initiative, personal commitment, rhetorical clarity and team spirit are praised (p. 56). This approach is found at the highest levels of the region’s digital technology investment chain, which represented nearly $100 billion in 2018 (p. 196).
Under these conditions, entrepreneurs find at best a launching pad towards the conquest of a unified market of 330 million inhabitants; at worst, an ecological niche formed by enthusiastic technologists; between the two, numerous financing opportunities and for a few chosen ones, the possibility of being bought out by large companies seeking to consolidate their comparative advantage through constant acquisitions. The book returns to the excesses of such a model: producing companies in a position of hypermonopoly in the manner of GAFAM ; promote fraud as illustrated by the Theranos affair; encourage the commercialization and misuse of user data as revealed by the Cambridge Analytica scandal (see chapter 4).
But despite these excesses, Silicon Valley remains the promised land of entrepreneurs, starting with those from France, nearly 20,000 nationals, to which are added several hundred entrepreneurs each year (p. 68). The book paints a portrait of some of the most spectacular success stories that have been able to adopt local codes to distinguish themselves in a highly competitive world, like Jean-Baptiste Rudelle, founder of Criteo, an advertising targeting company listed on the Nasdaq since 2013, which had a turnover of nearly 1.8 billion dollars in 2016.
There ” French Tech “, a public policy that does not bear the name
From France, these stars of the economic press struggle to describe the winding path and the cobbled-together nature of a public policy that does not bear the name: French Tech. If we were to schematize the story that D. Lacorne delivers, we could present it as a back-and-forth movement operated on two axes: a horizontal axis, between France and Silicon Valley, and a vertical axis, going from Paris to its provinces. On the first, three categories of actors have been striving since General de Gaulle to operate a productive turn inspired by northern California: the Executive and its close advisors, heads of large French companies, entrepreneurs who have left since the 1960s to try their luck in a region of the world that celebrates risk-taking. The second axis relates to the action of disseminating an industrial policy placed under the sign of the “new”. The “label” and support funds are the two preferred means. The recent period has thus seen the establishment of 74 competitiveness clusters and 62 aid schemes (p. 211).
According to the author, the overall assessment remains mixed. Of course, France can now highlight national champions (Blablacar, Deezer, Doctolib, etc.) but there is no reason to conclude that these companies have developed thanks to the specific measures adopted by successive French governments. The city of Paris also lags behind London, Berlin and Tel Aviv in terms of investments made in business creation. Finally, the stated attempt to free itself from a centralist and Jacobin framework of action must face the observation of a continued or even reinforced domination of the Parisian scene, which concentrates the large and small coding schools, trade fairs, investors, the specialized press and the support of the central power in its various forms: Treasury Department, BPI France, Ubifrance, Caisse des Dépôts, etc.
D. Lacorne qualifies the pessimistic tone of certain pages by recalling that the primary objective of the label ” French Tech “, initially led by Fleur Pellerin, was to raise awareness, particularly among political leaders, of an entrepreneurial culture to which France, marked by the domination of CAC 40, did not at first glance offer a welcoming land. However, from the point of view of foreign venture capitalists, the political momentum now personified by Emmanuel Macron could be perceived as the beginnings of a cultural revolution in the homeland of the Minitel.
Silicon Valley, model or counter-example
The book thus constitutes a practical guide to the history and organization of Silicon Valley as well as a welcome complement to recent work on entrepreneurship and innovation in France. The reader will be able to explore the imaginary bridge between California and Paris that several generations of politicians have tried to build, sometimes at the cost of a few reductions, projections and misunderstandings. The French fascination, older than it seems, of the ruling classes for this part of the world, reveals in some respects all that it offers a counterpoint to what could be defined as the French social model. It is this irony of history that can be found in the development of Paris-Saclay, the “labor law” or the reform of Pôle emploi, all actions consisting of framing “from above” administrators dreamed of as entrepreneurs of themselves, whereas Silicon Valley devotes initiatives coming “from below”, based on asymmetrical properties: structural unemployment and a restrictive migration policy decided in Paris vs. a Northern California in a situation of full employment, with 50% foreign workers in a region that does not have to question a limited and highly unequal education offer or its lack of fiscal coherence to see companies established on its soil but often imagined elsewhere, including in France, prosper worldwide.
D. Lacorne’s essay could thus invite us to open two questions: on the one hand, are entrepreneurs, researchers, investors and all the actors who participate in bringing innovation to life today in more favorable conditions than their predecessors? On the other hand, should we not accompany these systems with a fundamental reflection on the infrastructures that ensure their embedding in society as a whole? From this point of view, we can note that Silicon Valley is a bad student when we consider the question of income inequality, the housing and transportation crisis, the cost of education, the many cases of sexual harassment that have made the news in recent years or its ecological footprint. The author concludes that it is perhaps less on the shores of the Pacific than on the shores of the Mediterranean that an economically efficient and socially inclusive model has seen the light of day. Israel, where the very notion of Startup Nation was born, had indeed more than sixty companies listed on the Nasdaq by the end of the 2000s, with a State that invests massively in higher education, maintains a policy of public funding of research (notably in the fields of cybersecurity and cartography), offers an advantageous loan system for young companies and seeks to structure the links of a population of more than 7 million inhabitants, the vast majority of whom are first and second generation immigrants, with entrepreneurs and engineers established in the United States. It remains to be seen whether this march of history is inevitable, welcome or even truly at work because, as the author reminds us, the startup scene represents only a “bush in a vast forest” (p. 248).