France 2030: what can we learn 2 years later?

This article goes to the heart of France 2030's ambitions, analyzing its deployment and effectiveness at mid-term, and outlines what the future might hold for the French economy thanks to this far-reaching plan.

54 billion euros. This is the amount committed by the French government in 2021, to radically and profoundly transform the French economy. A major public investment plan to support innovative companies capable of becoming European and world leaders. A major plan to reindustrialize the country sustainably and restore its sovereignty, in an increasingly uncertain geopolitical context, and to accelerate the ecological transition. Included in the France Relance plan, France 2030 is combined with the 4ᵉ Programme d'Investissements d'Avenir (PIA 4) for a total of 100 billion euros to be deployed over 5 years. By way of comparison, Horizon Europe (the European counterpart to France 2030) represents an investment of 95.5 billion euros for a similar timeframe (2021-2027).

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Assessment after 2 years of investment

Over the past two years, numerous calls for projects have been published, and many companies financed. The France 20301 in itinere evaluation report, published in the summer of 2023, takes stock of what has been achieved by the public investment program. So, two years after the launch of France 2030, where do we stand?

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_{"Now another challenge, particularly as I speak to you, is to succeed in consolidating on this action, but speeding it up even further. And that's essential, because the world is also moving faster, because competition is even tougher. [...] We need to go faster, stronger." Emmanuel Macron, on December 11, 2023 in Toulouse, on the occasion of the 2nd anniversary of the France 2030 plan.}

Plan beneficiaries

SMEs and research organizations in the lead

By April 30, 2023, nearly 14 billion euros had been committed to making the French economy more competitive, more innovative and greener. To achieve these objectives, the France 2030 plan has chosen to act across the entire ecosystem. This is why all players have been supported, through loans or subsidies. SMEs are the most regularly financed players: the 1,136 SME beneficiaries represent 51% of all players who have received public funding.

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However, in terms of amounts received, these SMEs represent only 22% of the total. Research organizations received the largest share of public funding disbursed by France 2030. They represent only 16% of all players, but received over 34% of the total amount committed. As for large companies, they received more than 18% of the amounts disbursed, even though they represent 22% of the beneficiaries.

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These results make perfect sense. SMEs represent the vast majority of French companies, and are involved in technology development projects, albeit with limited budgets. On the other hand, research organizations need substantial budgets to fund fundamental research to improve the state of knowledge on disruptive subjects. Last but not least, large corporations have the greatest financing capacity, and are able to fund larger-scale projects.

Disparities by device and sector

However, it seems necessary to qualify this distribution of France 2030 amounts. The beneficiary organizations differ considerably according to sector and type of initiative. Firstly, according to the type of intervention: calls for projects (which account for the majority of funding) finance as many emerging players (less than 12 years old) as non-emerging players. Over-the-counter financing and PIIEC (major projects of common European interest), on the other hand, fund non-emerging players to a far greater extent (72% and 68% respectively).

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The same heterogeneity is then found in the various calls for projects: Of the structural schemes (I-Lab, I-Nov, I-Démo, 1ʳᵉ Usine), all except 1ʳᵉ Usine finance emerging players in the majority. On the other hand, of all the directed schemes (maturation, demonstrator, deployment and industrialization), only the maturation PAAs finance emerging players in the majority.

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Lastly, the same disparities can be seen across sectors. 99% of players benefiting from funding in the space sector are emerging players. Over 60% of funding for cultural content, training for the future and sustainable food also went to emerging players. On the other hand, less than 20% of the funds allocated to low-carbon aircraft and Small Modular Reactors (SMRs) went to emerging players. For industrial decarbonization, the figure is just 4%.

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These differences can be explained quite simply by the degree of technological maturity of the sectors or the characteristics of the players targeted. For example, the most polluting industrial sites are explicitly the most concerned by decarbonization, and they are also predominantly old sites, hence the high proportion of non-emerging players.

Territorial distribution of funds

Concentration around three major hubs

As the report points out, the aim of the France 2030 plan was not to reduce territorial inequalities, but more broadly to create the conditions for a better economic future. In this sense, we shouldn't expect it to be evenly distributed between French regions. That's why the Île-de-France region alone has benefited from over 4 billion euros for its 650 supported projects, out of the 9 billion already invested by France 2030. The Auvergne-Rhône-Alpes and Occitanie regions (the next two regions) are far behind, with 301 and 161 subsidized projects respectively.

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Nevertheless, some parts of France 2030 have a strong territorial dimension. The "regionalized France 2030" schemes are operated directly by the regions, which finance the projects they deem best suited to their territory. In addition, one of France 2030's stated objectives is to reindustrialize the country. These industries, unlike other sectors, are mostly located outside the Île-de-France region (which accounts for "only" 12% of all industrial activities, compared with 16% for the Auvergne-Rhône-Alpes region), according to INSEE2.

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Funds earmarked for the development of strategic industrial plants and projects are thus largely geographically distributed throughout France. In fact, 77% of funds dedicated to decarbonizing industry went to companies located outside the Paris Region, as did 68% of funds dedicated to biomedicines.

Sector commitments

Disparities in commitment

The report points to a wide disparity in commitments across the sectors covered by France 2030. For example, half of the funds allocated to support higher education and research have been committed, compared with just 10% of the funds allocated to support electronics and robotics projects.

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In some sectors, such as decarbonization of industry, only 2% of credits have been committed. This low rate can be explained by the time required to validate the granting of subsidies (which are often large-scale and therefore require the approval of the European Commission).

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The sectors to which France 2030 funds have been most committed :

• France 2030 regionalized (80%)
• Higher education and research (49%)
• Support for start-up growth (39%)

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The sectors to which France 2030 funds have been least committed :

• Electronics and robotics (10%)
• Biopharmaceuticals and medical devices (20%)
• Hydrogen and renewable energies (22%)

Environmental impact

Review and outlook

As of April 30, 2023, more than half the projects supported had no direct decarbonizing impact (54%). Only 21% of projects had a direct and lasting impact on the decarbonization of industry or practices.

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Nevertheless, France 2030 will have a concrete and direct impact on the decarbonization of the French economy and practices in order to better achieve the ecological transition. As mentioned above, the funds earmarked for decarbonizing industry have yet to be committed. And the majority of support for projects developing hydrogen and renewable energies as well as nuclear power on French territory has not yet been committed either.

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So it's only a matter of time (and commitment of resources) before France 2030 delivers its full environmental impact.

Conclusion

Key points to remember

• SMEs received the most funding (51% of the total), but research organizations received the highest amounts (34% of the total).
• Companies in the Île-de-France region are by far the biggest beneficiaries of France 2030 subsidies, in line with their economic weight in French GDP (€4 billion out of the €9 billion disbursed at the time of the report).
• Funds are unevenly committed across the France 2030 sectors. Very few funds have been deployed among those allocated to electronics, biomedicine and renewable energies.