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Election in France: The land of wasted opportunity

Danish exports to France could be many billion kroner greater. The problem lies with both Danish companies and the French economy. But there are companies that are going against the flow and exploiting opportunities in the French market.
Danish company Guldmann A/S has succes exporting hidden staircase lifts for to French museums.

Publiceret: 04.05.2017
Af Karen Witt Olsen mail

“France first,” goes the campaign slogan of Front National’s first lady and presidential candidate Marine Le Pen.

For Danish business, however, the reality has long been more like “France last”.

Calculated in relation to size and distance to Denmark, there is an enormous unrealised potential for exports to France. In other words, Danish companies could earn significantly more money and create significantly more jobs at home and abroad if they had a better eye for French consumers and companies.

If you delve into export figures, you find that Danish companies’ sales of goods to France have fallen by 14 per cent over the past ten years. In the same period, the eurozone’s exports have increased with 20 per cent.

The lack of growth in exports means that France buys a decreasing share of Danish exports. Ten years ago, France bought nearly 4.5 per cent of Danish exports. According to the most recent figures, exports now total just under 3 per cent.

“Exports to France have come to a standstill. And our exports to France cannot keep up with the pace of our European colleagues. France is therefore in many ways the land of wasted opportunity,” says Senior Analyst Allan Sørensen of the Confederation of Danish Industry.

See also: Companies exports create 775.000 jobs in Denmark

Exports to France stagnate

With its nearly 65 million inhabitants, France is the third largest country in the EU. Only Germany and the UK are larger in terms of population, and this is also the case when looking at the size of the economy.

Since France is also relatively close to Denmark - and is, after all, in terms of culture more similar to Denmark than many other countries in the world - there ought to be a potential for greater exports, according to Senior Analyst Allan Sørensen.

“France is the market in which we underperform the most. Exports to France could be worth nearly DKK 9 billion more,” he says and adds:
“If we’re able to increase exports to France and realise the potential that exists in the French market, we could create jobs and earnings for Danish companies and for Denmark.”

See also: Half of Danish export comes fromm 100 companies


Stairlift for Notre Dame

One of the companies that has already spotted the potential in France is Guldmann A/S, which produces aids for people with special needs and their nursing assistants - for example stairlifts and lifting platforms.

The company first started up in the French market in the early 00s with one employee working from a home office. The company now has 19 employees in the French market and a turnover of DKK 38 million.

Guldmann has been very successful in selling lifting platforms and ramps that can help give the walking-impaired and wheelchair users access to the many old buildings in France. It all started when a French architect was looking for an “invisible” solution for the Notre Dame cathedral in Paris, explains head of Guldmann’s sales in southern Europe, Lars Bendtson.

“Architects basically do not want the platforms to be visible. In their view, it is a defilement of the old buildings. We have therefore developed a bespoke solution that can be made practically invisible,” he explains.

Danish installations in French trains

Guldmann reached a milestone in the French market in 2015, when the company won a major contract for the supply of ceiling hoists for 47 hospitals in Paris. The ceiling hoists make it easier to lift patients with mobility issues.

The company has since entered a partnership with the French national railways for the supply of more than 1,000 lifting platforms so wheelchair users can board French trains.
According to Lars Bendtson, the key to success in the French market is understanding the French mentality.

“You need to understand how to flatter them and not offend them with our direct Danish manner,” says Lars Bendtson.

On top of that, there are all the other little things that are so important. For example, the fact that everything needs to be in writing in order to be valid. And that a soft Danish style of management will not work in France. Out of respect for the particular French ways, Guldmann has decided to appoint a new director with a French background.

“I cannot do what a Frenchman can with their knowledge and understanding of how you develop and care for the relationships to our clients,” says Lars Bendtson.

France is France

Another company that is active in the French market is SKOV A/S. The company, which produces ventilation solutions for poultry and pig farms, decided to establish itself on the French market in 2012 with a French salesperson and two engineers who could take care of technical support.

According to Harry Luimes, Sales Director for the European market, the start-up has been hard work.

“The first two years have been an uphill climb. And it’s only now that it’s starting to get fun,” he says.

According to Harry Luimes, one of the challenges has been that in France, there is a penchant for everything French, which is practically automatically considered better.  

“France is France. They really like French products. When you come with a Danish solution, it can therefore be difficult to get a foot in the door,” he says and adds:

“You have to invest time and attention to the French market, and you must be patient. And finally, you cannot forget that flawless French is a prerequisite for success.”

“You might be able to get by in Paris without speaking perfect French. But that isn’t the case in the French countryside. Here, the language and a French identity are very, very important.”


French economy stuck in the slow lane

Opportunities in France naturally also depend on developments in the French economy. If consumption and corporate investment really get going in France, sales opportunities for Danish companies will grow.

In recent years, however, France has not been an economic success story.

Economic growth has been at about 1 per cent a year, and gross public debt, which constitutes 95.3 per cent of the gross domestic product (GDP), is growing markedly year after year. The growth in debt is so high that it has broken EU budget rules, which state that public debt can maximally be 3 per cent of the GDP.

Furthermore, employment has never really recovered from the financial crisis. Unemployment is now at 9.6 per cent, and it is particularly the young people who are struggling to gain a foothold in the labour market.

According to Associate Professor at Copenhagen Business School Cédric Schneider, expert on French affairs, unemployment is the major issue.

“The French job market is not flexible enough. It’s difficult to hire and fire. And there is a mismatch between the needs of the companies and the skills that exist in the French workforce.

Le Pen will add insult to injury

The question is whether the new French president, who will be elected 7 May, has the right medicine to fuel the French economy and employment.

If the choice falls upon Front National’s Marine Le Pen, the answer is a clear no, says Cédric Schneider.

“Marine Le Pen will definitely make a difference for the economy, but it will be in a negative way,” he says.

In particular, Cédric Schneider notes that Le Pen has discussed France leaving the euro and pursuing a much more protectionist policy.

“Her policies will cause investments and money to pour out of the country. But the core of Le Pen’s popularity doesn’t have to do with economic policy but rather the question of national identity and resistance to immigration, which appeal to many French people outside the larger cities,” he says.

According to Cédric Schneider, from an economic point of view, it looks slightly better with Le Pen’s opposing candidate Emmanuel Macron from the movement “En Marche!”.

Macron has proposed a Scandinavian-style employment policy that, on the one hand, will provide better benefits for unemployment, but on the other hand, will also involve a far more targeted effort to get the unemployed into work. This could potentially increase labour supply, for the benefit of companies and the economy. In addition, Macron has proposed a lasting cut to corporate taxes and increased investment in French industry to make it more competitive.
“Macron’s policy might work. It is true, in any case, that some of the initiatives he suggests have had a positive effect in Scandinavia,” says Cédric Schneider.

The president as a puppet

However, the winner of the presidential election is one question. It is an entirely different question whether the newly elected president will be able to get their policies through with the MPs elected in the National Assembly, which constitutes one part of the French parliament - the other of which is the Senate.

In mid-June, 11 and 18 June, to be precise (like with the presidential election, the parliamentary elections take place over two rounds), French citizens will once again visit the polls to elect the 577 representatives of the French National Assembly. And this election will be highly significant in determining whether the new president will simply become a puppet or actually gains the power he or she is aiming for.

According to Cédric Schneider, it is unlikely that Marine Le Pen’s party Front National will be particularly successful in the French parliamentary elections. In the last election, the party won just two of the parliament’s 577 seats.

“It’s going to be very, very difficult for Front National. Despite Marine Le Pen’s success, not many people have been prepared to vote for Front National’s MPs” says Cédric Schneider.

It looks a bit easier for Emmanuel Macron, since his policy is sufficiently centrist to create the possibility for a broader cooperation with the parliament, Cédric Schneider explains.

“Macron has, very deliberately, avoided being so precise in his policies that he scares some people away,” he says.

Regardless of the result of the election, it is certain that technical aid manufacturer Guldmann will stay in the French market. 

“Politics naturally have an impact on our market in France. We are dependent on funding and interest in the healthcare sector. But the French market is growing, so it is definitely not something that changes the fact that we will be focusing majorly on France in the coming years,” says Lars Bendtson.  

FACTS
Marine Le Pen

Wants a national referendum regarding France’s EU membership.
Wants to draw France out of the Schengen cooperation, which allows
free movement of citizens in the Schengen countries.
Wants to implement an annual immigration limit of 10,000 people.
Wants to introduce a national currency.
Wants to fight trade agreements.
Wants to ban international investors in strategic and important French industries.

Emmanuel Macron
Wants a stronger EU and more European cooperation.
Wants to give all French citizens the right to benefits.
Wants to increase education and efforts to get unemployed into work.
Wants to lower payroll taxes.
Wants to cut public spending by nearly DKK 450 billion.
Wants to implement an investment plan worth approx. DKK 375 billion to revitalise French industry and economy.

The French electoral system in brief
Presidential election:
The president is elected for five years in a direct vote. If no candidate receives over 50 per cent of the votes in the first round, the two candidates with the most votes meet in the second round. The second round will take place on 7 May.

Parliamentary election:
The parliament, which is the legislative power, consists of two chambers: the National Assembly and the Senate.
The National Assembly has 577 members who are elected for five years. Just as with the presidential election, the election of candidates takes place through two rounds. If no candidate receives over half the votes in their constituency, a second election round is held. The second election round will take place this year on 18 June.
The Senate’s 348 members are chosen in an indirect vote every third year by representatives of the French regions and municipalities. Every third year, half the senators are up for election. The next election will be held in September 2017.
Source: The Great Danish Encyclopaedia and the French Senate

France is France. They really like French products. When you come with a Danish solution, it can therefore be difficult to get a foot in the door.
SALES DIRECTOR FOR THE EUROPEAN MARKET HARRY LUIMES, SKOV A/S
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PUBLISHED: 5/4/2017 LAST MODIFIED: 5/4/2017