Growth Verticals
l Financial Services: The services sector accounts for 72% of the GDP. French stock exchange seventh largest in the world. Leading French banks like Credit Agricole and Banque Nationale de Paris (BNP) are headquartered in France. The French insurance sector has consolidated its position as the fourth-largest in the world, and the latest economic indicators are signalling a stronger Q3 and Q4.

l Manufacturing: Construction and civil engineering contribute about 4% of the GDP. France is the fourth largest producer and fifth largest exporter of pharmaceuticals. Is also the third-largest exporter of cars in the world with groups like PSA and Renault.

l Telecommunications: The French Telecom market was valued at $55 bn in 2001, of which 83% was telecom services—the rest telecom equipment. Market expected to grow to $ 72 bn by 2005. French giant Alcatel is the fourth-largest manufacturer of telecom equipment and the world leader in transmission systems and submarine cable networks.

SWOT

l Strengths: France is the world’s fourth-largest economic power in terms of GDP, accounting for 27% of the total Western European IT market. 37 of the Fortune 500 companies are based here. Firms like Airbus and France Telecom are already offshoring from India.

l Weaknesses: Telecom sector badly hit by the slowdown. Especially the telecom equipment market. Labor laws and tax structure not weighed in favor of the IT industry. Local language capability crucial.

l Opportunities: Research in the ICT sector represents 25% of industrial research in the country. Demand in network and telecom architecture, IS security management and embedded software likely to increase. The French market for semiconductors and related devices expected to growth by 50% between 2001 and 2006 to over $7.3 bn.

l Threats: Geographically closer countries like Romania preferred over India for outsourcing. Outsourcing to distant non-French geographies seen as a threat to French jobs. IT skill shortage not too high.

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