France: Restoring Competitiveness

Chapter I. Overview€ 2 -Productivity is high but not dynamic enough to sustain growth 2 -A structural deterioration in competitiveness 9 -Economic policy considerations 12 Chapter II. Boosting Research and Encouraging Innovation 15 -France has a powerful edge in several high-tech sectors, but its innovation system is not very effective 15 -Recent reforms and policies should be pursued but also evaluated€ 20 Chapter III. Strengthening Competition and the Regulatory Framework 24 -Overview€ 24 -Strengthening competition in retail trade 25 -Strengthening competition in the transport sector€26 -Strengthening competition in the energy sector 26 -Class-action lawsuits€ 27 Chapter IV. Making the Public Sector More Efficient 29 -Recent efforts at modernising the public sector 30 -The budget as a tool for making better use of staff 33 -Reducing the regulatory burden on the economy, including the public sphere 33 -Making decentralisation work better€34 -Promoting integrity and transparency in public life. 37 Chapter V. Reforming Taxation to Promote Employment and Investment 40 -Taxing labour discourages employment€ 42 -The corporate tax rate is relatively high, but its base is narrow 43 -Reforming taxation to support investment, employment and competitiveness 44 -Underperformance of younger and older people on the labour market and a more marked duality 47 -Key recent OECD recommendations for a more efficient labour market 53 Chapter VII. Improving the Performance of the Education System€ 55 -Good results by and large but increasing inequalities€ 55 -Improve the quality of teaching and the imparting of knowledge in primary and secondary education 57 -Better action to prevent school failure€ 58 -Improve the equity and efficiency of higher education 60 -Ease the transition from school to work 61 Chapter VIII. Improving Vocational Training€62 -Identify adult skills and employer requirements 62 -Strengthen initial vocational training 63 -Improve in-service vocational training€ 68 Chapter IX. Improving the Functioning of the Houseing Market 72 -An excessive channelling of resources into the construction industry damages business competitiveness 72 -Estimation of the impact of house prices on exports€ 74 -The role of housing policy€ 75 Annex 1. Position of France in global value chains: first lessons from the TiVA database 77 -Length of value chains and French specialisation 77 -Position of France in global value chains 78 -Revealed comparative advantage 79 -Origin of value added embodied in exports 81 Annex 2. Sectoral information 83.