It is the same with the economy as with men. Exposed to an existential threat, the strongest, those who show the greatest capacity for adaptation through innovation, survive, the others are doomed to disappear. In a post-Covid context where France’s GDP must fall by 11%, the time has come to revive the country. But with an economy in full recession, can we continue to ignore innovation for a long time? In particular when the crisis highlights one of the great weaknesses of the French economy: the French discount.
In April 2018, I was chatting with one of our shareholders, an American and a Francophile. We commented on the fact that often, for equivalent assets, investors valued ten times less a French company compared to its American twin. He then told me that when he encouraged an American investor to buy French biotech stocks, the answer was often: “French equal French failure”. Followed by the comment: “Over the past 30 years, can you name a successful French technology company? “ This anecdote first grieved me. Then, after reflection, this is indeed what we are missing, some icons embodying successes, globally recognized technological companies with all the positive repercussions that one can imagine on our economy.
What is the best indicator of success for a technology company? The simplest standard for measuring success remains market capitalization, since it is determined according to a certain number of parameters and will have the effect of upsetting the hierarchy of the CAC 40.
France’s objective must be to bring at least three French innovation champions to capitalizations above 10 billion euros by 2025. The consequence will be the initiation of the theory of runoff in the chain of innovation financing, which is currently broken down in France, and the creation of an international financial attractiveness, a culture of innovation financing and a robust ecosystem of growth with socio-economic consequences major. Employment, trade balance, attractiveness of international capital, not to mention the morale of the population. An innovation economy will be the engine that will put France back in the front rank of the nations and allow us to perpetuate our redistributive social model, which is now exhausted.
We have in France all the assets to get there, an overflowing creativity leading to breakthrough innovations, an ever growing will to undertake, a benevolent State which has done what it takes to initiate this dynamic.
Unlike behemoths such as the United States and China, France is a small market for services. With the exception of a few niche services, only products can be exported easily and have a rapid global reach if successful. To achieve our objective, we must essentially focus on product companies with high barriers to entry, which are not reduced to intellectual property, but also include a technological barrier in know-how and manufacturing.
I remember a meeting with a very prestigious American fund which participated in the creation of the most beautiful tech companies in the United States, like Tesla, Apple, Amgen, to name a few. At the end of this meeting, the fund analyst tells me that he likes to invest in companies with very ambitious, even unrealistic projects, and appreciates the CEOs who are totally uninhibited. This anecdote hides an element of capital importance: one does not succeed in disruptive technologies by being reasonable. You must have the ambition and the excess to bring a company towards a capitalization of more than 10 billion euros, or even 100 or more. It is by adopting this state of mind and these objectives that we will finally be able to break this curse of the French discount.
We do not succeed in disruptive technologies by being reasonable.
You must have the ambition to bring a company towards a capitalization of more than 10 billion euros, or even 100 or more.
André Choulika is president and founder of Cellectis.