The French government is currently undergoing a major push to encourage biotech development in France. Biotechnology has been recognized formally by the state as one of the key growth priority areas for the future. In 2002, the government put in place a “Plan Biotech” whose mission was to establish a separate biotech fund that underwrites start-up investments and encourages private sector and venture capital investments for the biotech sector. In 2004, the French public sector invested €89m in direct aid to biotech, and €70m in indirect aid.
Despite this Plan, there was a significant drop in seed capital raised by companies in 2005 (€50m in 2005 as compared to €70m in 2004). The overriding reason for the fall was the lack of available exit routes for investors and, more precisely, as the stock market had overall poor performances that year, the fear of not being able to recoup investments during an IPO.
Biotech companies have been clearly more dynamic since 2004 when the government introduced the “Young Innovative Enterprise” (JEI) initiative as a further boost to biotech. More than two-thirds of French biotech SMEs now qualifies. The advantages are numerous, most particularly a full exemption from payroll taxes on employees involved in R&D projects. Of those companies that qualify, 74% immediately ploughed back the tax saving, amounting to roughly a fifth of payroll, to recruit highly skilled personnel. The majority launched new R&D projects and many acquired more advanced facilities.
Seventy-five percent of the French biotech companies are SMEs employing between 20 and 50 people. In total, biotech employs around 6,000 people and 3,000 researchers in France. Employment in the sector has risen by 30% between 2002 and 2004.
Geographically, there is a strong concentration within the Paris/Ile de France region. The distant number two and three regions are the Rhône-Alpes (the Lyon and Grenoble area) and the Alsace area (centered on Strasbourg).
In respect to the number of companies, the top three regions are:
Ile de France: 23%
Rhône-Alpes: 15%
Alsace: 7%
R&D is even more regionally focused:
Ile de France: 45%
Rhône-Alpes: 15%
Alsace: 10%
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