THE EVOLUTION OF FRENCH INNOVATION POLICY

Postwar French policy measures in the innovation sphere have tended to create new measures alongside existing ones; instead of evaluating and culling out unsuccessful programs “the idea is often to create a new measure with more or less the same objectives but with a larger budget and/or a larger coverage.”3 The Carnot initiative was part of a broader effort that began in the early 2000s to reform the French innovation system and improve the relationship between the national research base and private industry, particularly small and medium enterprises (SMEs). Since 1983, when the government of Francois Mitterrand began dismantling the institutions of France’s postwar dirigiste industrial policy, French science and innovation policy has progressively moved away from centralized, government-directed “top down” measures based heavily on large enterprises toward decentralized, industry-initiated “bottom up” measures to encourage and incentivize entrepreneurialism by small and medium-sized firms. During the trente glorieuses (thirty glorious years of postwar economic expansion), the government held a large ownership stake in the economy, provided financial backing for “national champion” companies, and tasked public applied research organizations with executing grandes programmes, large-scale R&D programs to support the development of strategic industrial sectors. The grandes programmes gave certain French industries a lasting technological advantage (rail, atomic energy, aviation, telecommunications), but “by absorbing most of the R&D funds, they deprived other sectors of even the most basic support for technology innovation.”4 By the beginning of the 1980s, dirigisme was becoming fiscally unsustainable and less relevant to the economic challenges arising out of the emerging information technologies and the small-firm driven innovation observable in the United States.

The slowing of global economic growth that began in the early 1970s drew French policymakers’ attention to the potential role that could be played by innovation in stimulating economic growth. It was recognized that the country exemplified “the so-called European paradox of tending to be strong in basic research and weak in applied research.”5 France’s basic research was dominated

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3Eparvier, Patrick. 2007. Country Review France. United Nations University and University of Maastricht. March. p. 31. In 2006, France created a “High Council for Science and Technology” to identify research and technology priorities. The new High Council took its place alongside an already established “High Council for Research and Technology” responsible for evaluating research projects and providing advice on R&D spending. The latter High Council acknowledged the creation of the former and issued a statement to the effect that the distribution of roles between the two Councils needed clarification. Ibid. citing High Council of Research and Technology. 2005. “Opinion of the High Council of Research and Technology on the Pact for Research.”

4Blanka Vavakova, “Reconceptualizing Innovation Policy: The Case of France,” Technovation 26 (2006) p. 453; OECD, Technology and Industry Outlook 2012, p. 292.

5A 1993 study of the French innovation system reported that of 2040 firms and research centers conducting R&D, only 7 percent had an R&D staff with more than 50 scientists and engineers. A



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