The latest events about french taxi drivers fighting for preserving their rights and their market against VTCs (Tourism car with private drivers) or national french TV channels trying to shut the door on Apple and Google TVs or Netflix, inspired me some thoughts and reflexions.

France is an old, old country. Lots of our laws are outdated, some of them get back to the beginning of the 18th century. For long, entire sectors have been regulated and protected from free competitions by successive governments, politics, regimes and …lobbies.
Our french mille-feuilles of laws along with the omnipresent regulation have had the effect of reducing the innovative movement France would have had otherwise.

Innovation strangling is twofold. First, installed companies have been safely protected from competitors while quietly installed within their regulated sectors. This way, they haven’t been inclined to innovate (first innovation lock-in).
On the other hand, complex regulation and tricky laws have ended crucify the innovation that might have appeared from inside (second innovation lockin). Both outside and inside competition have been maintained or contained by the system.

Until recently, this biased eco-system composed of strongly regulated sectors and historical national competitors addressing their franco-français markets wasn’t a big deal. Companies were allowed to provide just above/below the average services and products at high prices (sometimes competitors even illegally agreed on those prices).

Nowadays, the globalized World France has entered modifies the game at orders of magnitude. International competitors whom have been innovating for years and decades thanks to unregulated and free competition/market policies are now knocking at Europe and France’s doors.
No matter France is an old country, its market is attracting more and more global players. Those great players France hasn’t been able to produce due to its regulated policies (remember the second innovation lock-in) and lack of competition which is the fuel of innovation.

Now, what can France do to get out of this innovation trap you may ask ?

Let’s suppose french government realizes the problem is mainly regulation and the laws themselves - the system - that prevents from dealing good cards and begin to play the innovation game.

Politics would have two solutions :

The first one consists of de-regulating, breaking the regulated sectors and laws to get into the free competition with no or a minimum of government interferences. This solution would generate lots of disagreements among historical french companies. Ultimately, should government succeed in de-regulating sectors, french companies will suffer from their lack of innovation facing very innovative and reactive global players. This would throw entire old-not-prepared sectors on the global battlefield. This is a very risky strategy (both on the economic and social aspects) .

Second choice: Do nothing, fake an innovation policy by sprinkling homeopathic false remedies and wait for the next elections. Protecting beyond reason several strategic historical regulated sectors. This is an even more risky choice as it will only delay the ultimate choice and accentuate french backwardness.