Editor's Chair: How to stop Paris burning

Richard L. Hudson

To explain: the student and labour union protests have been big news. The issue: a new law by the conservative government that lets companies fire workers without any of the usual formalities at any time in the first two years of employment.

It sounds cruel and arbitrary – at least to the hundreds of thousands of students and workers who have taken to the streets to protest it since 7 March. But its intent is the opposite: The government says it will lead to more youths getting hired in the first place, as employers won’t any longer fear getting lumbered with a young employee for life (Under the country’s standard employment contract, it’s virtually impossible to fire anybody without monster severance payments.) Given that France’s youth unemployment rate has been stuck above 20 per cent for years, that’s a laudable goal.

But the protests were also among the topics under discussion at our own Science|Business Roundtable – a gathering of three dozen European business and academic leaders, hosted at the École des Mines de Paris by ParisTech, the association of France’s Grandes Écoles for science and engineering, and sponsored by Microsoft. Not all present were for the new law; even those inclined to liberal economics recognise that the government’s measure could end up distorting the labour market in yet a new way, by disadvantaging older workers. But it was praised as an example of the kind of flexibility that governments are going to have to contemplate if they’re going to fix what ails the Eurozone’s stuttering economy.

At the heart of the problem is a series of labour laws, tax codes, university policies and corporate practices that make the economy slow to change and adapt. Europe has completely missed the productivity boom, due to uptake of new technology, that the US Federal Reserve Board has been measuring in America for most of the past 15 years. The reasons are many, but they start at the interface between academia and industry. In most European countries, it’s harder for ideas to get out of the laboratory and into the marketplace. Financing is scarce. Universities are badly organised for technology transfer. The patent system is balkanised.

But the overwhelming problem comes back to labour – and here the French protests were germane. Among the multinational executives in attendance, there was a surprising consensus – surprising, at least, to a group of experienced business and technology journalists such as ourselves – that it isn’t tax breaks, IP policy or any of another list of issues that are the main obstacle to their companies spending more on R&D in Europe (though they’d like a lot of those things, too.)

Instead, the No.1 problem is labour – an adequate supply of well trained, properly motivated scientists and engineers, both inside their own labs and at the continent’s great universities where most of the great new technology ideas in Europe originate. Get more technology talent in Europe, and there will be more technology developed in Europe. That was the simple message of most of the corporate leaders present.

How to achieve that is among many of the issues that we will report on, as we prepare our Innovation Manifesto – a series of policy measures to bridge the gap between academia and industry in Europe. We will publish that, along with an account of the unusual roundtable discussion, this spring. These sorts of policy debates, whether on broad or narrow topics, are an essential part of what we provide on this news service – both because many of our readers are part of the policy process, and because there’s so much about European technology policies that need changing.

But in the short term, the Paris protests remind us, economic growth begins and ends with labour law. If you have suggestions for changing those laws, speak out. Start by emailing us your thoughts with the Right to Reply link on this page or on our home page, and we will print a selection of the comments we receive.