France, Amazon, and the “death valley” of anti-growth policies

posted at 9:21 am on June 6, 2013 by Erika Johnsen

To follow up on a post from the other day, France’s Socialist administration has been having a hissy fit over the audacity of online retailer Amazon in daring to offer French residents with a convenient and economical option for their online-shopping and delivery-service needs. France’s culture minister lamented that Amazon is a “destroyer” of bookshops and that she would be looking at measures specifically “to curb Amazon’s growth in France” — and with governing sentiments like that, it’s no wonder France is currently floundering in an economic and fiscal disaster of uncompetitiveness.

Amazon may very well be a “destroyer” of bookshops, but that’s what free enterprise is — creative destruction, and that is a good thing. As long as there are still people who enjoy and are willing to pay for physical bookshops, there will be bookshops; all Amazon does is allow an opportunity for the market to more accurately reflect people’s wants and needs. Some people might enjoy browsing bookshops, but perhaps the current market is overinflated, as some people would prefer to use Amazon and devote their time, money, and resources more productively elsewhere (i.e., grow the economy). What’s more, looking at the bookshops that might go under with Amazon’s rise is only half of the story; as the WSJ pointed out with an example in their story about Amazon expanding it’s grocery delivery service in California, the company could actually be a boon for other small businesses in providing a platform off of which they can more efficiently sell and distribute their own wares (h/t Via Meadia):

Chris Porter, owner of A La Mode Pies in Seattle, said he was selling more Mexican chocolate mousse and strawberry rhubarb confections thanks to an AmazonFresh program offering delivery of prepared foods from restaurants, bakeries and other small businesses. “It’s been great for my business,” said Mr. Porter, 40, adding that he was considering opening another storefront in the Seattle area. …

“It’s a very efficient operation,” said Mr. Porter. “I am not sure it could work, but if they expanded nationally, I’d love to be a part of that.”

And it isn’t merely Amazon that has the soak-the-rich French government’s knickers in a twist; Apple and other high-tech manufacturers have been fighting to get France to allow them to operate without slapping them with extra pecuniary burdens and taxes.

The worst part is, France is well aware that they are severely lagging in encouraging innovation and competitiveness, and they are consciously attempting to fix the glaring problem, via Bloomberg:

The European Union’s largest producer of math, science and technology graduates needs to get out of “the death valley between what’s developed in a lab and its future as a successful product or company,” said Louis Gallois, former head of Airbus parent European Aeronautic Defence and Space Co. and now France’s competitiveness czar.

Building on a decade-long effort, President Francois Hollande’s government is seeking to put in place plans to squeeze more out of the country’s innovations and image. The latest effort to end Europe’s second-largest economy’s recession and reverse record joblessness is a state-commissioned report dubbed “Brand France” that will lay out by the end of June ways to wring more from the nation’s research, patents and other intangible assets.

“France has research labs with Nobel prize winners, strong brands, museums; what it needs is to figure out how to cash in by turning it all into jobs, growth and startups,” said Christian Nguyen, managing partner of Marks & Clerk, which advises companies and governments on intellectual property….

Investment in France is less attractive because of high labor-related costs and conditions and taxes that are both elevated and constantly shifting, according to a report published today by Ernst & Young.

Hey, I have an idea about how to create jobs, growth, and startups: Maybe stop trying to tax the bejeesus out of them, just for a start.


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What? No comments about France? “La France…nul points

virgo on June 7, 2013 at 1:30 AM