The Parisian Paradox

In the past week, a UK retail executive slates France, describing Garde du Nord station, “the squalor pit of Europe”. The French Prime Minister, Manuel Valls, on a visit to London retaliates, accusing the same UK executive of having drunk too much beer. A Boston Consulting Group survey suggests London and New York by quite some margin is a greater magnet for  internationally mobile executives and employees than Paris. Should we be worried or is this knockabout “entente cordiale” chatter? After spending the past few days in Paris, here is my observations:

  • Paris has become a far more international city (almost every retail outlet has people under the age of 40 voluntarily speaking English, almost unheard of in 1994)
  • Customer service and responsiveness varies wildly (it is still a pleasant yet rare event, to see front line staff, predominantly local, offering to resolve and take ownership of service issues)
  • Technological innovation is slow and you would hardly call Paris a well-networked city (WiFi and other technology is still very fragmented in public spaces)
  • Traditional private sector businesses and local workforce expectations are being challenged like never before (availability of work, jobs and reliance on careers for life). The traditional employer-employee bond is mired in mistrust and suspicion about management and shareholders’ intentions.
  • There is an insouciance in the public sector (rail, energy, utilities) with still little visible change of mindset about the need to dramatically improve the customer experience or adapt working practices
  • Working for an International versus a French employer is less viewed as a financial decision, more a pragmatic move (increasing job and career mobility)
  • In a competitive global jobs market, Paris faces an unparalleled challenge retaining smart “twenty something” people, who increasingly love the drive and passion of an Anglo-centric “freedom to fail” business culture (the Sunday evening, “le weekend” commuters on the Eurostar are at unprecedented levels)
  • Recovery will not truly have set in until there is a net inflow of these entrepreneurs and executives (many though are increasingly laying down roots in London or New York and committing to longer-term stays upto 10+ years, so the bounce back will be slow)
  • It remains the capital of the world’s 5th largest economy but you sense it fears the speed with which newer capital cities are attracting inwards investment, jobs and appeal (there is no obvious vision of a Paris 2020) by comparison to a Dubai, Singapore or dare I say it, a London.
  • Paris’s prominence in luxury fashion and culture remains but its’ relevance in global knowledge sectors (technology, financial services, professional services, healthcare and education) is declining
  • There are standards of public behaviour, which are demonstrably more liberal than almost every major global city (attitudes to sex, adherence to laws and ethical “norms”)
  • Investment in infrastructure (public transportation, new high quality offices and housing) is anemic
  • Paris has been more successful than London in attracting larger numbers of Asian tourists (less visa obstacles) but less visibly successful in attracting their inwards direct investment in business (high start-up costs)
  • While hotels might on average be cheaper than New York, London, Hong Kong or Tokyo, eating out and transportation is arguably more expensive for visitors
  • Ultra high net worth French families are continuing to move to less penal tax locations (London, Switzerland), while shoring up their affairs from assertive tax inspectors (more complex transfer of trusts to places like Hong Kong and Singapore) and consciously guarding their wealth (more private sale purchases through third parties and less activity at public auctions)
  • There is visibly a greater willingness to embrace international investment / sponsorship of previously “off limits” French cultural, sporting and nationally important events (Qatari investment in football clubs, horse racing; Nike in athletic events; Deutsche Bank in major art shows)
  • High fixed labour costs and regulations in Paris will increasingly see SME businesses and investors prioritise the digital sales channel for short-term export-driven growth
  • Government policies and prohibitive taxation are leading to a prevailing business culture of “caution”, not great for a surge in top line revenue growth or a rebound in economic confidence
  • Paris remains equally an idiosyncratic (culturally diverse) and frustrating (bureaucratic) place to live, work and start a business but a fabulous place to visit and find one-of-a-kind experiences

© James Berkeley 2014. All Rights Reserved

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