A new “Golden Era” beckons for French science

At that time, the rumours were that the Grand Emprunt would reach the eye-catching sum of €100 billion. Sarkozy also named two former Prime Ministers, socialist Michel Rocard and conservative Alain Juppé, to craft a bipartisan project, prioritise the investments and engineer the financial structure, to avoid the new loan putting a further weight on France’s already stressed public finances.

The shape of the plan is now known. If Sarkozy still has to finalise some details, he has already endorsed its proposed size and priorities. And living up to their reputations as cautious civil servants, Juppé and Rocard have agreed to reduce the total amount of the loan from €100 billion to €35 billion.

With France running on deficits for most of the last 30 years, and debt-to-GDP ratio raised from 65 per cent to almost 80 per cent during the financial crisis, the new loan needed to be downsized to preserve the country’s credit rating on the financial markets. In the event, the loan will actually be €22 billion, with the balance being raised from the resale of bank shares, purchased last year when the government was forced to prop up the financial institutions.

But if the size of the Grand Emprunt has been somewhat reduced, its priorities indicate boldness. The money will be spent entirely on research and innovation investments, a brave move since this is clearly not a vote winner, given such investments generally take years to pay off. About half of the money will be go to the universities, while the other half will support technological developments.

Within the Juppé-Rocard project, €10 billion will fund a new national campus agency whose role will be to finance university buildings and laboratories. In addition, a special fund of €3.5 billion is to be invested in four to six campuses, putting the focus on technological innovation in order to make these institutions globally competitive.

Meanwhile, €2 billion will to be devoted to new research grants, and to attracting and retaining high profile researchers. Finally, Juppé and Rocard are proposing to devote €500 million to create 25,000 new internships in high schools specialising in maths and science.

“Generally speaking that is good news,” says Remi Barré, Professor of Science Policy at Paris’ Conservatoire national des Arts et Metiers (CNAM). “It indicates the recognition at the highest level that the French universities are lagging behind and need to be fixed.”  

Barré also believes that, “The investment in universities is coherent.” Two years ago, the French government started to reform the governance of universities, granting their presidents autonomy and setting up Plan Campus, a €5 billion fund to modernise their infrastructures. This was in addition to: the creation of the ANR, a merit-based funding agency in 2006; making it possible for universities to create foundations to raise and manage their own endowments; and allowing universities and Grandes Ecoles (engineering and business schools) to get together and form larger campuses, such as the one emerging in Saclay in the southwest of Paris.

However, many details of the Juppé-Rocard project remain unclear. For example, it is not clear how much of the new money will go directly into funding the building of infrastructure, and how much will be go into the university foundations to finance future investments. In addition, universities still do not control all of their own real estate. For example, student residences are still managed by the state and the trades unions, at a time when shortage of student housing is one of the most acute problems facing French universities.

Critics of the Grand Emprunt scheme, such as science policy professor Laurent Bouvet, are also upset because the investment will concentrate on a few institutions that have already benefited from other measures, in a deliberate bid to give them a leg up the famous Shanghai University ranking.

“It is true that the project is suggesting competition among universities to get funding,” observes Barré. But he adds, “It could help some institutions that did not qualify for Plan Campus.” For example, Paris universities were not ready during that selection process and received very little. Now they are ready. Science|Business founder member Paris Tech is hoping to accelerate its development into a federation of technology schools, thanks to that new money.

There are also critics of the second part of the Juppé-Rocard project, which will see €19 billion invested in technology support programmes. At first glance, this does look good for science and research because of a mandate to be innovation-driven.  For example, two new funds managed by state-owned Caisse des Dépots will receive a total of €4.5 billion. One of these funds of €2.5 billion will co-finance 10 pilot programmes for smart grids and electric transport. The other fund is a more classic loans mechanism, offering a zero interest rate for thermal insulation and renewable energy projects for public buildings. Digital content and telecoms companies will also indirectly get €4 billion through a scheme to the accelerate deployment of fibre optic networks to the home.

Start-up and innovative SMEs will benefit from €2 billion to be managed by OSEO, a state-sponsored bank that grants loans to SMEs. In energy, beside new mechanisms to promote renewables, €1 billion will go to five new research institutes. The French atomic agency CEA will receive €900 million to build a prototype of a fourth generation nuclear reactor. Finally, €2 billion will be divided equally between the industrial and medical biotech sectors. Of this, the national funding agency ANR will receive €500 million over and above its annual budget for life sciences projects, while another €500 million will be used to support clinical trials in hospitals.  

Commenting these measures, French research minister Valerie Pécresse spoke of a “new golden era for French scientists.” If most opponents consider the investment to be too little too late for French universities that have suffered years of underinvestment, the critics are offering no alternative in a budget-constrained environment, except to raise taxes. Not exactly the proper incentive to encourage risk-taking, high tech entrepreneurs.

Still, Philippe Fremeaux, editorial director of the magazine Alternatives Economiques may have a point. In an opinion piece in the French daily Les Echos he expresses concerns about the fact the government wants to put money into investment and not into current expenses such as the salaries of R&D staff. For him, in a knowledge-based economy researchers’ salaries are as much of an investment as building new prototypes or funding start-ups.

Barré also observes that after years under tight state control, universities are still in the process of getting to grips with their financial autonomy and still lack the managers to handle these new funds properly. Habits and behaviours need to be change, and that is a long process.

Finally, another French habit may prove difficult to break. The government hopes its €35 billion investment will draw in €25 billion from the private sector. But with a long tradition of having part of their R&D done for free by public research institutions, it remains to be seen if French companies will pick up the hint dropped by the Grand Emprunt.

Indeed, during the preparation of the plan by Rocard and Juppé, private companies mainly manifested their interest by trying to channel some of the funding for their own R&D. This, also, needs to be fixed if France is to reach its target of devoting 3 per cent of GDP to R&D without even more money coming from public coffers.