Today's Letter IEDI surveys recent industrial policy initiatives in France aimed at the diffusion of new technologies associated with Industry 4.0. These technologies are central to the French government's effort to regain the position of an industrial power and to revert the sharp deindustrialization and technological lag that have plagued the French economy in the last two decades.

This work is part of a series of IEDI studies on international experiences with industry 4.0, including: Germany (Letter No. 807, "Industrial policy for the future – Germany's INDUSTRIE 4.0 Initiative," Sep 29, 17), the USA (Letter No. 820, "Industry 4.0: The US Strategic Plan for Advanced Manufacturing," Dec 11, 17), China (Letter No. 827, "The 'Made in China 2025' initiative," Jan 26, 18), South Korea (Letter No. 831, "Industry 4.0: South Korea and the Industry of the Future," Feb 16, 18) and Japan (Letter No. 838, "Industry 4.0: Industrial Policy in Japan in the face of the Fourth Industrial Revolution," Mar 16, 18), among other works, including Brazil (Letters No. 797, "Industry 4.0: Challenges and Opportunities for Brazil," Jul 21, 17, and No. 803, "The future of Industry", Sep 01, 17).

Before properly tackling the theme of industry 4.0, it is important to note that in France, as in Brazil and in contrast to some countries like Germany, the manufacturing industry has shrunk in the last decades. This is an important aspect because the downward trajectory of the sector can make it difficult to adapt to the new times. On the other hand, it can also mean a unique opportunity for its strengthening, from higher levels of productivity and competitiveness.

While the German manufacturing sector kept its share of GDP relatively stable (22.6%), in France its weight fell from 16.2% in 1995 to only 10% in 2015. Industrial participation also declined in terms of employment, from 15% to 10% of total employment in the last 20 years, and as a share of foreign trade. The trade balance of the French industry became chronically deficient, dropping from +2% of GDP to -2% in the period.

Although common to all major industrialized countries in the same period, the phenomenon of deindustrialization seems to have been much faster and more brutal in France than elsewhere. According to Professor Jean Luc Gaffard, a researcher at SciencesPo, the specificity of the French deindustrialization lies in the dismantling and dispersal of large national industrial conglomerates following the financial liberalization of the late 1980s, leading to a concentration on their core business and ignoring the similarities of the skills and competencies involved in the different areas of activity. In addition, there was a reduction in industrial investments, with deleterious consequences for innovation and growth.

Aiming to interrupt the decline of the industry in its productive structure, promoting the sector's modernization and competitiveness, the New Industrial French Initiative (Nouvelle France Industrielle, NFI) was launched in September 2013. Similarly to the industrial policy programs implemented in other developed countries, like Germany, South Korea, the United States and Japan, the NFI addresses three areas: development of cutting-edge technologies, support for the diffusion of these technologies to companies, with eyes on the modernization of the productive apparatus, and development and adaptation of workers' skills and abilities as required by such technologies.

Composed initially of 34 industrial reconquest plans, NFI mobilized a group of public and private actors, from the industry, academia and government, around concrete actions aimed at the following objectives: new supplies, new technological advances, new investments and new jobs. Leaders of industrial and/or digital companies became responsible for coordinating individual projects while the overall direction of the initiative was assigned to a managing committee that brings together public and private actors under the authority of the French prime minister.

In May 2015, NFI entered its second phase, with an expressive investment plan. The public investment bank BpiFrance provided financial support through loans of around € 2.2 billion to help not only small and medium-sized companies but also larger companies to finance their investments in digital technology, robotics, energy efficiency, etc. In addition, the French government instituted a temporary tax benefit in the form of a super-amortization (suramortissement) for companies investing in their productive modernization from April 2015 to April 2017. This extraordinary tax benefit was in the order of € 5 billion.

Moreover, this second NFI phase resulted in a reorganization of the 34 initial plans into nine "solutions", which provide concrete answers to the country’s main economic and social challenges: new resources, sustainable cities, eco-mobility, transport of tomorrow, medicine of the future, data economy, smart objects, digital trust, smart food production. At the same time, a cross-cutting project named Industry of the Future was set up, the French correspondent to Germany's Industry 4.0 initiative. Its main objective is centered on the modernization and transformation of the French industrial model through digital technologies.

The cross-cutting project Industry of the Future was organized around five pillars: developing cutting-edge industry 4.0 technologies; helping companies to adapt to the new paradigm; training employees; showcasing the French industry of the future; strengthening European and international cooperation. It will support projects of companies in markets where France can, within a period of 3 to 5 years, acquire European or even global leadership, such as additive manufacturing, digital production lines and virtualization, and augmented reality.

In charge of the coordination of this project is the Industry of the Future Alliance, announced in April 2015 and made operational in July 2015. Presided over by Philippe Darmayan, the president of Arcelor Mittal France and of the group of industrial federations, this association brings together industry representatives, universities and research centers, and the French regions.

According to Darmayan, for French industrialists the challenges of the industry of the future involve four areas: supply differentiation through a finer adaptation to demand (customization); competitiveness (lower costs, continuous improvement, robotization, data processing); reduction of capital employed (processing speed, link between design and factory, reduction of working capital requirements, predictive maintenance); transformation of business models.

Further details on the French initiatives for industry 4.0 are presented below (in Portuguese). The work was based on documents of the French government, reports of the French think tank La Fabrique de l'Industrie, articles published by the French Economic Observatory (OFCE)/SciencesPo and the October 2016 issue of the journal Réalités industrielles, entirely dedicated to the subject "Industry of the Future". Information extracted from the OECD report “Science, Technology and Industry Scoreboard 2017—The Digital Transformation: France” was also used.

The full text is available in Portuguese.