The Court of Auditors has just published a report in which it judges that the public policies carried out by France over the last ten years in favor of its industry have had a limited impact on the sector. This remains penalized by structural handicaps and the institution recommends in particular aligning French industrial policy with that of the EU.
“Results still fragile”. This is the way in which the Court of Auditors evaluates the last ten years of France’s public policies in favor of its industry. In a report that it has just published at the request of the National Assembly, the institution draws up a mixed assessment, to say the least, of state support for this sector. After falling from 16% to 11% between 2000 and 2010, the share of the manufacturing industry in national wealth did not recover despite the various aid measures put in place. It stabilized at around 11% over the period from 2011 to 2023, a low level, well below that of Germany (21%) and Italy (17.5%).
Certainly, the sector has been lastingly affected by two major crises. First of all, that of 2008-2009, where it was necessary to wait until 2013 for France to return to its 2007 level. Then that of Covid-19, with a return to the 2019 level in 2022. But France’s performance , the third industrial country in the EU, are worse than its two predecessors, Germany and Italy. The first saw the growth of its industrial added value increase by 61% over the period from 2000 to 2019 and the second by 28%, when France was limited to +20%.
French industry has focused on certain sectors, such as aeronautics, chemicals-pharmaceuticals and agri-food, while the share of automobiles and electrical products has declined. Industrial companies have the particularity of being relatively few in number (274,000 are counted in 2021), with a strong representation of multinational firms with subsidiaries in France and abroad. The latter in fact concentrate 78% of the added value and 69% of the employed workforce in the sector. Overall, industrial employment is stable at 10% of total employment, even if it has increased very slightly since 2017.
From 2014, the French State began a public policy to support the competitiveness of its businesses. Schemes such as the CICE (competitiveness and employment tax credit), then reductions in charges, have been put in place, but they have mainly benefited service activities, according to the Court of Auditors. The reduction in business taxation to 25% was good news for the industry, but the taxation of this sector remains “penalized by production taxes […]which are not linked to their profitability”, she notes.
A sharp increase in support from the French state from 2020
Structural handicaps hamper competitiveness, starting with limited research funding capacities, linked to the low level of industry, and which result in insufficient innovation. Then, the sector must face a degraded image, which harms the attractiveness of training and professions. If the cost of energy has long represented a significant comparative advantage, there are fears that the end of ARENH (Regulated Access to Historical Nuclear Electricity) in 2026 and the increase in energy prices will degrade significantly industrial competitiveness.
From 2020, state support for the industry has increased significantly, reaching €27 billion (billion euros) per year, compared to €17 billion over the period from 2012 to 2019. In these figures, It is appropriate to add equity investments in industrial companies amounting to €2.2 billion per year over the period 2012-2022. According to the Court of Auditors, “the results of the plans to support the reindustrialization or digitalization of industry which followed one another from 2012 to 2022 are inconclusive. Their targeting is insufficient and the instruments chosen are not very effective, with the exception of certain sectors such as aeronautics or microelectronics for which the State has been able to demonstrate continuity. »
In detail, the institution judges that the various PIAs (Future Investment Programs) implemented between 2010 and 2019, “had a limited impact on industrialization. » As for the France 2030 plan started in 2021, “ The first evaluations show that the targeting of public investments should be tightened and that the intervention doctrine should focus more on the most effective instruments by limiting the use of subsidies. »
If the research tax credit is assessed positively by the Court of Auditors, it still advises adjusting its base in order to improve its effectiveness. One of its main recommendations is to align French industrial policy with that of the EU. The institution cites in particular the Draghi report which advocates the reduction of European dependencies in six sectors: critical raw materials, semiconductors, health, digital technology, agri-food and energy.
