Heights of R&D: Xerox s award-winning center in the Alps. A m e r i c a n C h a m b e r o f C o m m e r c e i n F r a n c e

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1 Spring-Summer A m e r i c a n C h a m b e r o f C o m m e r c e i n F r a n c e COMMERCE IN FRANCE Vol. CXIV No. 1 Heights of R&D: Xerox s award-winning center in the Alps Brice Hortefeux Guest speaker at this year s annual general meeting

2 Since 1840 INTERNATIONAL MOVING - STORAGE MOVE MANAGEMENT - RELOCATION PARIS: Tel.: Fax: OFFICES IN LYON, MARSEILLE, NICE et TOULOUSE

3 06 10 A m e r i c a n C h a m b e r o f C o m m e r c e i n F r a n c e COMMERCE IN FRANCE Vol. CXIV No. 1 Contents Editorial Oliver Griffith Economy U.S. France Economic Relations Elections What Sarkozy s Election Means Oliver Griffith Rhone Alps Rhône-Alpes, terre d élection américaine Eric Fagot The Ups and Downs of Student Exchanges Christopher Cripps Lyon - Reinventing France s Second City Extract of Urban Land. Telecom Interview with Viviane Reding EU Commissioner for the Information Society and New Media L ARCEP - ex ART - fête ses 10 ans Dominique Baroux The need to improve procedures for the international transfers of personal data Adapted from a Position Paper by AmCham EU New media regulation: What s on the horizon? Winston Maxwell and Olivier Esper Echoes of the Chamber President s Council New members 30

4 Editorial I t is an honor to represent the American Chamber of Commerce in France, the oldest overseas U.S. business association in the world. In a 20-year career as a U.S. diplomat I had ample opportunity to work with AmChams to support U.S. companies overseas and to advocate for business-friendly policies with host governments. Oliver Griffith Managing Director I am fortunate to be able to build on a strong tradition at AmCham. U.S. firms have invested over $60 billion in France and have created about 600,000 jobs. Most of the 50-plus U.S. Fortune 100 companies in France are members of AmCham, and their voice is heard by the French government. Moreover, a number of important French firms are members of AmCham, which is increasingly becoming the voice not just of American business, but of trans-atlantic business. We are also cultivating closer ties with AmCham EU in Brussels and the U.S. Chamber of Commerce in Washington, increasing our influence over economic policies. However, AmCham is more than large multi-nationals. Our individual and small company members animate our task forces and training and networking events; our non-profit members are the backbone of Franco- American relations in areas such as education; and our four regional offices spread our message of mutually beneficial Franco-American business ties around France. In addition, we have fruitful cooperative relations with organizations such as the French-American Foundation, France Amériques, Aspen France, and IFRI, making us an important nexus between France and the United States during this time of transition. It has been a busy five months since I took over as Managing Director of AmCham, and I am pleased with our programs. We now have nine active task forces and dozens of top-level speakers, ranging from senior U.S. and French government policymakers and CEOs, to technical experts, academics, and cultural figures. It is an exciting time at France and I look forward to working with our members and welcoming new members in the months to come. Oliver Griffith 4

5 w w w. g r o u p e - u r v i k a. c o m Insufflons de la valeur pour développer les performances Connect by Médiagerance - RCS Lyon Peintre : Mass 4 E N G AG E M E N TS Q U I F O N T N OT R E D I F F E R E N C E Des relations humaines : écoute et compréhension des attentes, proximité, convivialité, discours simple et direct nous guident en permanence. Des solutions innovantes et de qualité : pour construire une collaboration efficace et durable, nous vous proposons des réponses concrètes, personnalisées, toujours adaptées à vos besoins. Une culture du service : réactivité, disponibilité, souplesse caractérisent nos interventions. Contact permanent avec un Consultant dédié, plannings de travail précis reflètent notre niveau d exigence. Le respect de règles déontologiques et éthiques claires : transparence des process, des approches et des outils utilisés, confidentialité des informations transmises, respect des personnes sont nos partis pris forts. RECRUTEMENT ÉVALUATION 3 place Gensoul LYON - tél : FORMATION CONSEIL Tour de l Horloge - 4 place Louis Armand PARIS - tél :

6 Economy U.S. - France Economic Relations U.S. economic ties with France are extensive and mutually beneficial. On average, over $1 billion in commercial and foreign direct investment transactions take place between the two countries every day of the year. Each country has an increasingly large stake in the health and openness of the other s economy. The vast majority of U.S.- France trade and investment transactions are conducted routinely and without controversy, although at times U.S. - French economic relations can become complicated by issues such as agricultural subsidies, French government interventionism in corporate activity, and the war in Iraq. Commercial ties France trade reflects the extensive links between the two U.S.- countries. France is the 9th largest merchandise trading partner for the United States. Between 1997 and 2005, French exports of goods to the U.S. increased from 20.7 to 33.8 billion dollars. The U.S. is France s largest trading partner outside the European Union. U.S. exports of goods to France increased from 15.9 billion dollars in 1997 to 22.3 billion dollars in Bilateral trade is concentrated in similar industries and sectors ( intra-industry trade ). In 2005, 65% of trade occurred in major industries such as aerospace, pharmaceuticals, medical and scientific equipment, electrical machinery, and plastics, with both countries exporting similar products. Many of these products are components of capital goods used in the production of finished products in both the U.S. and France. Much of this intra-industry trade occurred between parent companies and their affiliates ( intra-firm trade ). According to U.S. government statistics, more than 60% ($14 billion) of U.S. exports to France were made by French subsidiaries. Exports contribute to U.S. and French domestic production growth as well as job creation, notably in the logistics and distribution sectors on both sides of the Atlantic. France and the U.S. also engage in a large and growing trade in services, such as tourism, education, finance, insurance, and other professional services. French exports of services to the U.S. increased from $7 billion to $13 dollars between 1997 and Several million Americans visit France annually, while some 700,000 or so French visit the US. Over the same period, U.S. exports of services to France increased from $9.4 6

7 Economy billion to $13.2 billion. France is the sixth largest market for U.S. exports of services, and the seventh largest provider of services to the United States. The trade surplus in services has helped reduce the overall U.S. trade deficit with France since Role of foreign affiliates While trade in goods and services receives most of the attention, foreign direct investment and the activities of foreign affiliates are the backbone of the strong French-American economic relationship. Commercial activities of U.S. affiliates operating in France and French affiliates operating in the United States are five times larger than export transactions. In 2003, French affiliates sales of goods and services to U.S. consumers amounted to $158 billion, while U.S. affiliates sold $397 billion of goods and services to French consumers. Of these combined sales, only 18% was accounted for by international trade. The bulk (82%) was due to sales by U.S. affiliates producing and selling in France, and French affiliates producing and selling in the United States. In 2003, French companies had 2,423 French subsidiaries in the U.S., providing 500,000 direct jobs and generating an estimated $160 billion turnover. The largest 100 French companies such as Lafarge, Michelin, Sodexho, EADS, Pernod- Ricard and Thomson electronics account for around three-fourths of employment. The 1,336 U.S. subsidiaries in France provided about 591,000 direct jobs, with a $223 billion turnover. Investment ties In 2005, France had the sixth largest investment stock in the United States - $143 billion - (behind the U.K., Japan, Germany, the Netherlands and Canada). The U.S. is the top destination for French investment worldwide, with the French investment stock increasing fourfold over the past ten years. These investments are concentrated in manufacturing (40% - of which chemicals 16% and machinery 15%), the financial sector (19%), the information sector (18%) and wholesale trade (11%). At $55 billion, the U.S. ranked third in investment stock in France, with a 13% share (behind the Netherlands and the United Kingdom). Investments are concentrated in real estate and business services (45%), manufacturing (25%), and the financial sector (14%). Over the last decade, the amount of U.S. investment in France has doubled. In 2006, an INSEE study reported that in 2003 foreign companies were responsible for 17% of the value added, 30% of exports, and one out of every seven jobs in France (excluding the financial and the government sectors). The study concluded that the French economy is more open to foreign investment than that of most of its neighbors in Europe. 7

8 Elections What Sarkozy s Election Means By Oliver Griffith Managing Director T he election of Nicolas Sarkozy as the President of France is a watershed in many respects. He is the post World War II son of immigrants, with a foreign name, and no pedigree at France s Grandes Ecoles. He dared to stray from the Gaullist model by expressing admiration for the US and even visiting George Bush. He dared to invoke, at least partially, liberal economic mantras. He dared to confront head-on France s volatile immigration issue. And he dared to name prominent Socialists and seven women to his cabinet and cut the number of Ministers to fifteen. In short, Nicolas Sarkozy appears to be an anomaly in French political culture. Why did he win, and what will he do? France, a fundamentally conservative country, is noted for adapting slowly to world trends, including globalization. However, a creeping unease «malaise» over the past ten years has rattled the traditional centralized social democratic model, and a critical mass of ordinary citizens -- and key players in the political class -- were ready for a change. Sarkozy realized this early on, showed great political savvy and a more focused approach than his rival, Segolene Royal. Moreover, he had the courage to present his, for France, unconventional ideas in a straightforward manner. He was helped by the disastrous results of the first round of the Presidential elections in 2002, when the right-wing Le Pen reached the second round. The French, prone to dissent, got burnt by voting for fringe parties then, and eagerly returned to the traditional fold. In fact their election-day turn-out, the highest in decades, gives Sarkozy a very strong mandate to make real reforms. Sarkozy taught the Left another hard lesson. The 35-hour work week, high public spending, unaffordable social hand-outs, and untouchable state companies are untenable in today s competitive globalized world. As much as France s relatively well run socio-economic model worked in more autarkic times, now it has become a burden that is hard to sustain. Sarkozy will not abandon it however; he will try to adapt it. The Left was unwilling to promise this and voters abandoned the traditional pattern of alternating Left-Right governments and also gave Sarkozy a strong majority in parliament. Sarkozy recognized early on that the French «malaise» had started breaking the back of old stereotypes about the dangerous liberal economic model. The positive examples of other European countries such as England, Ireland, Sweden, Denmark, and the Netherlands, not to mention the US, which adapted better to globalization than France, have been constantly in the news. However, Sarkozy could have a more bumpy ride than the others. Whereas England, the US and some of the others adapted to the new world economic order when globalization was a mere wave, Sarkozy s France will have to do it when it has become a tsunami. As regards relations with the US, so important for trans-atlantic business, Sarkozy has definitely set a new tone, 8

9 Elections especially for a member of a Gaullist party. It is likely, although not assured, that he will follow through. For one, he has taken the rhetorical debate with America away from an ideological stance vis-à-vis the «Anglo Saxon» world and will, instead, evaluate the relationship issue by issue. The Chiracian idea of using the EU as a counterweight to the «hyper-puissance» should also fade. To profit from this, the US administration would be wise to quickly emphasize that a strong EU is in America s interest, and use the trans-atlantic relationship to guide the international order. big change is that he recognizes that it is in the French national interest to adapt quickly to international competition. To do this, the French, as he repeated often, have to work more, and companies have to be given the flexibility to compete. Projet3 4/12/06 18:44 Page 1 In summary, Nicolas Sarkozy marks a break with the French political tradition. He comes to the French presidency full of energy and with many of the right ideas in the economic area. He is welcomed by the private sector. However, the French model changes slowly, and others have failed in their good intentions. The public may realize that change has finally become inevitable. However, if they have not, they will take to the streets once more to block reforms, and France will fall behind the rest of Europe. Advertisement However, Sarkozy will be no «French Poodle», subservient to the US, especially in the political arena. He favors the Kyoto Protocol, is reticent on missile defense, rejects Turkish membership in the EU, and wants to pull French troops out of Afghanistan. He has shifted to the right in many areas, but his cultural values remain rooted in the French social democratic tradition. It is in the economic area that Sarkozy is looking most toward the American model, although again not in all areas. His Prime Minister, Francois Fillon, was the architect of a daring pension reform in 2003, and he and Sarkozy will take on labor market reform of some kind. Not collecting social charges on overtime pay will lessen the negative effects of the 35-hour work week, and reform of hiring and firing practices could give the private sector the flexibility it needs in the international marketplace. However, we must not forget that as Finance Minister in 2004, Sarkozy engineered a two billion euro state bail-out of Alstom and blocked attempts by Berlin to sell Aventis, a French-German pharmaceutical firm, to the Swiss. There is no doubt that he will protect French interests and take some measures frowned upon by the US, the EU or the WTO. However, the

10 Rhone Alps Rhône-Alpes, terre d élection américaine En dépit de la concurrence grandissante des pays à faibles coûts de maind œuvre, Rhône-Alpes concentre un important vivier d entreprises américaines utilisant savamment les atouts de la région pour rester compétitives. By Eric Fagot Regional Chairman France D e tout temps, Rhône-Alpes a concentré sur son territoire des activités à capitaux étrangers. Une tradition d accueil diront certains, alors que les analystes économiques préfèrent voir dans ces implantations un phénomène directement lié aux nombreuses ressources de la région en matière de savoir-faire et de potentiel industriel et de recherche. «La région Rhône-Alpes a bâti un savoir-faire industriel qui va bien au-delà de la tradition textile qu il est d usage de mettre en avant pour caractériser Lyon et des industries du décolletage pour décrire les Alpes. Les compétences industrielles sont très diverses et surtout elles se sont accompagnées de la création d un réseau d écoles et de centres de recherche qui permettent aux entreprises de trouver de la main d œuvre qualifiée pour développer leurs activités et des centres ressources pour innover», décrit un enseignant en économie dans une université lyonnaise. Autant de ressources disponibles et opérationnelles qui font les beaux jours de groupes américains installés sur le territoire rhônalpin. Des installations qui dans la plupart des cas se sont réalisées par le biais de rachat d entreprises déjà implantées en Rhône-Alpes. Le poids de l histoire Ainsi, Scotts installé à Ecully près de Lyon a-t-il racheté la branche produits de jardin de Rhône-Poulenc pour asseoir son implantation en France. De même, Caterpillar à Grenoble, Carrier à Montluel dans l Ain ou Manitowoc à Lyon et Stephan Europe à Voreppe près de Grenoble, ont tous pris pied en Rhône-Alpes en rachetant des sites existants. Et aujourd hui ce poids de l histoire est loin d être négligeable dans la stratégie de développement de ces groupes en Rhône-Alpes. «Nous travaillons en collaboration étroite avec un réseau de sous-traitants qui sont tous à moins de deux heures de camion de notre site. Ce sont eux qui nous fournissent en sous ensembles que nous assemblons. Ce réseau de professionnels dotés d un grand savoir-faire qui s est forgé au fil des ans est très important pour nous, car il nous garantit un approvisionnement de qualité. Et hormis autour de Lyon, un tel tissu de compétences n existe en Europe que dans la région de Milan en Italie», constate Didier Da Costa, directeur général du site de Carrier à Montluel qui fabrique des systèmes de climatisation pour des applications commerciales et industrielles et emploie 559 personnes pour fournir les marchés européens, moyenorientaux et africains. «Si nous sommes encore compétitifs ici, c est en partie pour des raisons historiques qui font qu en Rhône-Alpes et en Bourgogne où nous employons 1200 personnes, nous trouvons un véritable savoir-faire en matière de sidérurgie, ce qui nous permet de compter sur un réseau de sous-traitants de grande qualité», renchérit Philippe Cohet, directeur général Europe Moyen-Orient et Afrique de Potain, fabricant de grues et filiale de l Américain Manitowoc. Des analyses partagées par la grande majorité des 10

11 Rhone Alps groupes américains présents en Rhône- Alpes. De cette histoire industrielle propice au développement d un vaste tissu économique subsiste également des centres de formation pointus permettant aux groupes américains de trouver sur place un réservoir de main-d œuvre compétente. «L entreprise a évolué avec une main-d œuvre de plus en plus qualifiée formée dans le bassin grenoblois», observe Tom Bluth, directeur du site de Caterpillar Grenoble. Des partenariats Au-delà des salariés, le réseau de centres de formation est également mis à profit par les entreprises américaines, au même titre d ailleurs que l ensemble des autres acteurs économiques quelle que soit leur nationalité, pour tisser des liens sur le développement de nouveaux produits ou de nouvelles technologies. «Les grandes écoles et les universités présentes à Grenoble nous fournissent un réservoir de techniciens et d ingénieurs de haut niveau, mais elles nous permettent également de travailler ensemble sur le développement de produits nouveaux. C est un avantage décisif, et dans les années à venir nous souhaitons renforcer ces partenariats», annonce Tom Bluth. Chez Potain, les passerelles entre écoles et laboratoires de recherche lyonnais ne sont pas spécialement formalisées, mais des échanges réguliers se nouent entre le siège du fabricant de grues et les formateurs et chercheurs locaux, le plus souvent dans le cadre du développement de technologies nouvelles. De même, chez Carrier où le site de Montluel abrite un centre de développement produits à l échelle mondiale, on souhaite renforcer les liens entre chercheurs maison et laboratoires indépendants attachés aux écoles et universités de Lyon. Un atout de taille pour la région Rhône-Alpes qui encourage ce type de collaborations entre industriels et centres de formation et de recherche, notamment dans le cadre des pôles de compétitivité et des clusters qui regroupent PME, grands groupes et centres de recherche. A l image du rôle actif de Becton Dickinson au sein de LyonBiopôle. Membre fondateur de ce pôle de compétitivité de rang mondial centré sur l infectiologie, Becton Dickinson développe, fabrique et commercialise une large gamme de matériels, systèmes et consommables à destination des professionnels de santé, des institutions de recherche médicale, de l industrie pharmaceutique et du grand public dont une partie est produite sur le site de Pont-de-Claix en banlieue grenobloise qui emploie1450 personnes. Ce pôle aura un effet catalyseur sur notre activité du fait de la synergie entre toutes les expertises qu il rassemble, estime Christian Seux, directeur de BD. La compétitivité avant tout Reste que ces collaborations aussi fertiles soient-elles ne dictent pas à elles seules la stratégie des groupes américains en Rhône-Alpes. Pas plus d ailleurs que le potentiel de main d œuvre de qualité. Quoi que Si les groupes américains maintiennent des sites de production dans cette région, c est avant tout parce que la compétitivité est au rendez-vous. De fait, les compétences 11

12 Rhone Alps du personnel ne sont pas étrangères à la compétitivité. «La vocation de notre site est de fabriquer des produits à la commande, cela rend déjà plus facile le fait d être implanté en Europe, même si les mêmes produits sont également fabriqués en Chine, au Brésil et aux Etats-Unis. Notre compétitivité réside dans notre capacité à réduire les temps d assemblage. Grâce à cette flexibilité nous pouvons rivaliser avec la Chine qui elle, bénéficie de coûts de maind œuvre bien inférieurs aux nôtres. Par ailleurs, nous livrons nos clients en trois à six semaines et l acheminement des produits depuis la Chine demande déjà quatre semaines donc nous avons un intérêt à maintenir une production ici pour fournir l Europe, l Afrique et le Moyen- Orient», analyse Didier Da Costa. «En alliant qualité, performance et productivité, nous restons encore compétitifs ici. Par ailleurs, nous sommes sur des marchés de niche dont la taille ne permet pas d amortir un grand nombre de sites dans le monde. Enfin, nos métiers nécessitent un important savoir-faire qu on ne trouve pas dans tous les pays. Aussi depuis la France nous approvisionnons l ensemble du monde, mais il est vrai que notre facture de logistique est très importante. Cela étant, environ tous les deux ans, le groupe se demande s il est opportun de maintenir le siège européen à Lyon et compte tenu de la proximité du réseau de sous-traitants, de la qualité de la main-d œuvre et des facilités de liaisons routières et aériennes, nous décidons de garder un ancrage rhônalpin», ajoute Philippe Cohet. «A Grenoble nous fabriquons les composants à forte valeur ajoutée, alors que nous sous-traitons dans les pays de l Est la production de pièces à plus faible valeur ajoutée. En revanche, l assemblage et le montage de nos produits qui requièrent des compétences pointues sont centralisés à Echirolles près de Grenoble et sont compétitifs par rapport aux autres sites du groupe», explique Tom Bluth. Par ailleurs, même si peu de groupes américains expatrient massivement des cadres sur les sites de Rhône-Alpes, leurs représentants apprécient de trouver dans cette région un terrain privilégié pour l accueil des étrangers, spécialement des anglo-saxons à travers un réseau d écoles et de points d accueil facilitant l intégration de leurs ressortissants. «La ville de Grenoble facilite la transition pour l installation des expatriés», note avec satisfaction Tom Bluth, tandis que Didier Da Costa se félicite des liens étroits qui unissent son groupe à l Aderly (Agence de développement économique de la région lyonnaise) et aident les nombreux salariés étrangers du centre de recherche de Carrier à s installer et s insérer dans la région. Enfin, Rhône-Alpes reste après la région parisienne, une des régions françaises les mieux desservies par les réseaux de transport. Que ce soit par voie d eau, un moyen de transport notamment utilisé par Caterpillar ou par la route, le train ou l avion. Un maillage qui facilite grandement les échanges entre les hommes et les marchandises. France is the collective voice of Franco-American business. Through the Board of Directors and Task Forces, it serves as both a forum and a representative body for companies in the trans-atlantic marketplace. Like all 106 AmChams worldwide, France is a membership funded organization. If your company is not a member, or if you know of companies that may be interested in joining, please contact: Monika Masuhr-Elis, Membership Manager, Tél: AmCham has many membership categories, for large, small and non-resident companies, non-profit organizations, and individuals. We also invite companies near our regional chapters based in Strasbourg, Lyon, Toulouse and Lille to join AmCham. Membership Benefits France Membership Lobbying - We promote a positive business climate in France through meetings with French government officials, legislators, and the media. Through coordination with the European Council of American Chambers of Commerce in Europe, AmCham EU in Brussels, and the US Chamber of Commerce in Washington, we also influence EU and US policies.. Events and speakers - We host almost 100 events a year with speakers from the US and French governments, the private sector, and international organizations. Networking - We organize dozens of networking events a year, from large receptions to «AmCham After Hours» and New Members cocktails. In addition our Task Forces provide an excellent opportunity for networking. Professional Forums - AmCham members may use our reception rooms to present their companies products and services to other members and potential clients. Publications - AmCham members receive the yearly Directory of US firms in France as well as the quarterly Commerce in France magazine. Their companies information and web addresses are listed in the Directory and on the AmCham website. Mailings - We provide address labels and databases of our membership and US firms in France that can be sorted according to dozens of different criteria. Certificates of Origin - AmCham is authorized by French customs to certify invoices for goods of US origin in transit. 12

13 NORD ISÈRE Donnez à vos ambitions un territoire à leur mesure. Une entreprise s épanouit toujours mieux quand l environ- Une population qui a doublé en 30 ans. nement est favorable. En Nord-Isère, tous les atouts sont réunis pour implanter votre entreprise ou la faire pousser. Avec une situation idéale au cœur de Rhône-Alpes, la 2ème région économique de France, le Nord-Isère offre des connexions intermodales et des infrastructures particulièrement propices au développement de toutes les activités industrielles, tertiaires, logistiques et commerciales. Plus que jamais, le Nord-Isère s affirme comme l un des 3 De nombreux projets de développement sur le territoire. Un taux d'emploi supérieur à la moyenne nationale. KALYANA - Photos A. Choiral pôles de l aire métropolitaine lyonnaise tout en offrant un véritable équilibre entre nature et vie urbaine F a c i l i t a t e u r d e b i e n - ê t r e Un pôle logistique et de services à forte valeur ajoutée, le parc d'activité de Chesnes. 17, avenue du Bourg - BP L Isle d Abeau cedex - - Tél Fax

14 Rhone Alps The Ups and Downs of Student Exchanges By Christopher Cripps Why do French business students want to study in the US on an exchange program? Old answer: to get a job there afterwards and live the American Dream New answer: because there weren t enough exchange places at schools in China and India O K, I ll admit that it s not that cut and dried, but the US has lost much of its appeal for our French business students. I have been in the student exchange business for nearly 20 years and have observed the change in attitude towards studying in the US very closely over the last generation. About Grenoble Ecole de Management Grenoble Ecole de Management is one of France s Grandes Ecoles de Management. Founded in 1984, the school rose quickly to the top echelons of French business education. Grenoble Ecole de Management is consistently ranked in the top 6 or 7 business schools in the French specialized press and in the top 30 European schools in the international press. The main areas of development for Grenoble Ecole de Management are and always have been Technology Management and Innovation as well as International Development. Part of Grenoble Ecole de Management s mission is to make sure that every graduate has had some type of international experience whether it be studying or working abroad. Grenoble Ecole de Management has become truly international over the years. We host over 800 international students and executive trainees every year from around the world. We have offices in China, India, Mexico, and Dubai. Our DBA, MBA and Master in International Business programs are delivered not only in Grenoble but in ten other locations across the globe including London, Moscow, Shanghai, Singapore, the US, and elsewhere. companies such as BD, HP, Caterpillar, Xerox, and others. BD was recently recognized at our graduation ceremony as the company which has received the largest numbers of our school s interns over the years. Evolution of Grenoble Ecole de Management s US Exchange Programs In the early 90s at Grenoble Ecole de Management, students were keen on studying at one of our partner business schools in the United States in order to obtain an MBA and perhaps begin their careers there. We could not satisfy the number of requests for exchanges in the US and established a selection Grenoble Ecole de Management is also closely linked to the business community through partnerships, executive education, and other activities. The location of the school in Grenoble has brought us very close to American 14

15 Rhone Alps process based on merit and motivation. Needless to say, the school s international team scrambled to increase the number of dual degree exchange programs we had in place in order to satisfy demand. A dual degree exchange means that students who participate can obtain both the MBA from the host university as well as the MSc in Management from Grenoble Ecole de Management in only one year. We have these types of arrangements with such US universities as Georgia Tech, the University of Kentucky, and Southern Illinois University-Carbondale. We also increased the number of exchange places available for students wishing to spend just one semester in the US at universities such as the University of Maryland and the University of Florida among others. All in all we have between 35 and 40 exchange places yearly for our students in quality US business schools, and until 2004, they were always full. However, since 2004, the number of students we send to the US has been declining drastically. We have gone from 40 students in 2004 down to 31 by 2005, and only 20 who started the school year in the US in Reasons for the Decline As an American expatriate, I recognize the value of education in the US and am very concerned by this decline. What happened to the American Dream? I interviewed several of our students in order to understand the reasons behind the new lack of interest in studying in the United States. I then decided to bring the main reasons to the attention of Angie Bryan, the US Consul in Lyon, in order to give voice to an important issue. The main reasons our French students are less inclined to study in the US are: 1) Disagreement with US politics, 2) the red tape, formalities and expense of obtaining the visa, 3) obtaining an MBA is not as coveted a feat as it once was, 4) the fact that China and India are booming. 1. US Politics Exchanges to the US for my students are dead, says Wolfgang, the head of exchanges at one of our partner 15

16 Rhone Alps schools in Germany. My students are completely against the policies of the US and choose to go elsewhere. At Grenoble Ecole de Management, many of those who absolutely want to study in North America but who have issues with US foreign policy have chosen Canada as an alternative. Management education there is virtually the same as in the US, and Canadian and American cultures are fairly similar when seen from French eyes as well. During last year s interviews for study abroad, several students told us that they were choosing Canada over the US because, the US is not the place to be right now. They cited again politics, disagreement with George W. Bush, the war in Iraq, and even the fear of violence. Another of our students, Benjamin, had a strong desire to study in the US, but chose his destination on the basis of politics. I really want to study in the US, he told me, but I don t want the University of Kentucky. There are too many Republicans there! He is now in western Michigan. 2. The Red Tape The US is the most difficult and expensive country to get into. Since 9/11, the visa restrictions have been stepped up and so have the charges! Everyone understands the need for security, but the various measures put into place by the US government make going to the US to study an expensive venture even before the student leaves home. Tuition is not an issue as our exchange agreements stipulate that each student will pay tuition at his/her university. I am not speaking about housing or board either, as these expenses are to be expected wherever one studies. However, let s look at the case of a student deciding whether to do an MBA in the US. The student must first take the Test of English as a Foreign Language (TOEFL) and the Graduate Management Admission Test (GMAT) which are required by accredited business schools, nothing to do with government regulations. Together, however, these two exams cost the student 311 ($405). One must also add any train fares for students who may have to travel to another city to take the exams. Once the student is selected for study abroad at his home university, he awaits documents from the host university in the US that he will need in order to obtain his visa. When he has received the documents, he must call the US Consulate in Paris and only in Paris to make an appointment for a compulsory interview. The simple act of calling to make an appointment costs the student about 11 ($14). After making the appointment, he must travel to Paris by train for the interview. A student from Grenoble will pay roughly 115 ($150) round trip with the student discount. The interview apparently is a formality for most students. Students tell me it lasts only a very few minutes and that the questions are limited in scope. Then there is the SEVIS fee of 77 ($100) which is the fee levied to help offset the costs to the US government for performing all these administrative acts for students. In the end, to recap the expenses: GMAT and TOEFL Appointment set up Return train ticket SEVIS fee Total euros Some students feel that the red tape and the expense are too much hassle and decide to go elsewhere. Others do persevere, but feel they are being taken advantage of by the US government. 3. Obtaining the MBA The French Grande Ecole system, of which Grenoble Ecole de Management is a part, offers students excellent educa- 16

17 Rhone Alps tion in both business and engineering. These days, the top ranked business schools in France are accredited by one or more international accrediting bodies such at EQUIS, AACSB, or AMBA, which makes the French degree even more recognizable worldwide. The students who attend these schools are almost certain to acquire excellent, well-paying jobs upon completion of their program and are assured of a bright future. Obtaining an MBA in the US is still considered a plus for French students determined to launch themselves into an international career. However, I must emphasize that obtaining the MBA is considered as only a plus in 2007 whereas 20 years ago, for many students, it was considered as a must. Thus, students who cannot afford or who are just not willing to jump through all the hoops necessary to study in the US will seek alternatives elsewhere. 4. Alternative Destinations China and India lead the pack Pick up a copy of the Financial Times on any given day and count the number of articles written about China and India. There are several everyday. Our French business students are up for adventure, and the current trend is to find adventure in China and India, with 11 and 8 percent growth respectively. Grenoble Ecole de Management has offices in both countries and exchange relationships with some of the top business schools. Today s business student recognizes the need to know more about these developing nations as they will be the ones to handle the flow of trade with them in the years ahead. Courses at our partner schools in China and India are in English, so the language barrier is not an issue. Demand for exchange places to China has become so great that Grenoble Ecole de Management will hold its first summer school in Shanghai this year. The summer school includes two weeks of course work on Chinese culture and business issues followed by four weeks of internship in an international company. Other alternatives to study in the US which have been on the rise in the last two to three years are the UK, Scandinavia, and South America. Our exchanges with the UK were in decline until 2003 but picked back up again as the US started to decline. Easing the Process There are surely no quick fix solutions to the declining numbers of our French business students going to the US. Perhaps a start would be to eliminate the expenses that add up, the SEVIS fee and the appointment set-up fee. Why should students wanting to study in the US have to bear these expenses? The US Consulate in Paris could also delegate the interviews to its regional consulates and American Presence Posts throughout France. This would cut down on the travel expenses for many students. One other recommendation would be for the US Department of Education or another authority to upgrade its marketing to show French and other Europeans the added value of studying in the US. Again, with China and India booming, it is becoming harder and harder to convince students to look toward the US. The Good News Due to the decline in the number of Grenoble Ecole de Management students wishing to study in the United States, we have started putting the emphasis on the value of the US MBA programs for international careers. Preliminary indications are that we will send more students to the US in 2007 than in However, the political and administrative issues remain a concern. The battle of convincing the students to go to the US is not yet over. In an interesting twist, Grenoble Ecole de Management has never hosted as many American students as this academic year. We currently have 42 American students studying in Grenoble, which is triple the number we had in American business students are finally starting to realize the value of study abroad. The courses in English provided by Grenoble Ecole de Management eliminate the language issues, and many Americans are now looking for quality European business programs at the graduate level. The programs are not only more internationally focused than many US MBA programs, they are also much less expensive. With the French business schools now dominating the Financial Times rankings, potential graduate students from the US are taking note and packing their bags for La Belle France! Christopher Cripps is Associate Dean for International Affairs Grenoble Ecole de Management Crédit photos : A. Chezière - Grenoble Ecole de Management 17

18 Rhone Alps Lyon - Reinventing France s Second City Extract of «Reinventing France s Second-Largest City» by G. Feller, Urban Land - p. 87, July, with additional information provided by Aderly, the Lyon Area Economic Development Agency. S ince the 1981 arrival of frequent, high-speed train service connecting Lyon to Paris in less than two hours, and links to the Mediterranean that connect in 90 minutes, Lyon has been undergoing steady urban development. The city is effectively growing from its industrial roots and transforming itself into a genuine metropolis. Local efforts to create a superior living and working environment seem to be paying off. Last year, Lyon was voted France s most livable city by the national publication Le Point. But perhaps a better indicator of this success is the fact that there is a steady inflow of new investment by newly arriving companies and already established ones. Commercially, the region is now considered one of France s hot spots for international business operations, with one in four persons working for a foreign-capitalized corporation. Last year, more than $754.6 million ( 600 million) was invested in greater Lyon real estate, which represents an increase of 39 percent over 2004 (when $540.8 million million) was invested). Of last year s total, 65 percent was invested in property used by the services sector; 23 percent for logistics-related properties; and 12 percent for industrial production facilities. Part of Lyon s success may lie in what is referred to as the vision thing. Gérard Collomb, senator-mayor of Lyon and president of Grand Lyon, as the entire metroplex is known, recently put it this way: Tomorrow s cities will combine both economic and intellectual riches, but also society s fundamental problems. To answer the challenge, we must dedicate ourselves to building more balanced cities, cities where citizens can come together in all of their ethnic, cultural, and social diversity. How did the big city with a socialist mayor achieve its status as an unabashed capitalist success story? Lyon did what many cities only talk about doing: it created a viable platform for sustainable growth. Lyon focuses on what the city calls six core elements : innovative, transportoriented development; creating green spaces that run the entire length of the city s rivers; redeveloping industrialized areas into balanced arts/leisure/residential complexes; building awardwinning, multi-tier subterranean and above-ground parking; developing industry-specific zones; and replacing high-rise public housing with modern low-rise communities. But even at its current rate of urban development, unbridled growth and the accompanying sprawl are not afflicting Lyon. The city s key executives recognized some time ago the inherent risks associated with overdensifying a region. They closely monitor both the pace and the quality of urban development. Lyon s international appeal is well established. The city s roots date to 50 BC, when the Romans settled the Lyon area for its central location and easy access by land and sea. Within a very short time frame, the city became both an important center for logistics, and the administrative capital of all western Europe. Then as today, Lyon was Europe s geographic crossroad, affording easy access to Spain, Germany, England, Italy, and northern Europe. Due to these forces, large, heavy industry grew and Lyon forged a reputation for being a hardworking, production-based city, all the while retaining the stylistic and architectural influence of Italian forbears. In keeping with its logistics tradition, Lyon now hosts France s largest inland port and Europe s highest density of superhighways. By virtue of its location and its transport network by land transport alone, 180 million persons are accessible in one day. With ongoing state-sponsored rail projects, Lyon will be the definitive hub linking all of southern Europe, and will be France s center for all east-west, northsouth freight. 18

19 Rhone Alps The net result is that Lyon now offers 32.2 million square feet (3 million sq m) of warehouse space, divided among 250 logistics and transport firms, which employ 40,000 people. The rail freight link to Italy, when finished, will provide an additional million short tons (40 million metric tons) of rail freight capacity per year. In concert with rail and highway development, Lyon also developed the Saint Exupéry International Airport, France s newest multi-modal transportation center. With air, road, and accessibility programs, Lyon has invested in refinements of its inner-city and suburban mass transportation system. This step was seen as part of the broader effort to increase quality of life by simplifying day-to-day transportation issues and reducing excessive traffic. As of 2005, virtually all parts of the city are accessible by modern mass transportation in the form of buses, subways, and free municipal bicycles. Lyon s transport and quality of life measures, however, cannot exist in a vacuum. The city s efforts to augment accessibility while simplifying traffic circulation is supported by a business development strategy that grows from its industrial and science-focused history. Business development in Lyon is based on the idea of clusters of excellence known in France as "pôles". The region s largest clusters include vaccinology and diagnostics, for which Lyon is seen as a world leader; chemical and environmental industries; truck and bus production; technical textiles; and video games. To increase the operational efficiency of businesses operating within the pôles, Lyon created industry-dedicated zones of development. Two notable developments include the biotech/hospital quarters and the digital industries quarter. For its biotech industry, Lyon designated three zones each one with significant development projects of its own. In addition, in Vaise, on the other side Passerelle du Palais de Justice bridge over Saone River at night, Lyon, France of town, Lyon is building on an ambitious master plan specifically designed for digital industries. By redeveloping the west bank of the Saône River, a formerly underused and deteriorating industrial zone is now home to Atari Infogram s world headquarters, Electronic Arts southern European headquarters, and Orange Telecommunication s national control center, plus several significant digital business incubators. In total, the Vaise district now hosts 60 digital industry companies, employing 3,000 people. To help stimulate this development, business service organizations were created, fiber-optic lines were installed, and automobile traffic patterns were adjusted. Accessibility was enhanced with an extension of the subway line and the city s inner-ring road. These efforts are now being complemented by the creation of outdoor walking malls, bicycle lanes, green spaces, additional parking, and hundreds of new apartments. 19

20 Telecom Interview with Viviane Reding EU Commissioner for the Information Society and New Media (Courtesy AmCham EU; interview conducted by Russell Darke) W hat regulatory levers does the Parliament and the Commission have to accelerate the take-up of RFID (Radio Frequency Identification Devices)? Would RFID applications also be subjected to ex-post impact assessments? The take-up of what some people call the world s newest old technology is essentially the responsibility of the private sector. The growth of the RFID market is indeed driven mainly by new commercial applications. Almost every day we hear about new applications in areas like business processes, logistics, supply chain operations, and tracking and ensuring the integrity of drugs. But it is also clear that the public sector has also an important role to play in the uptake of RFID technology. Firstly, the public sector is becoming a major user of RFID technology just consider its widespread use for the tracking of assets in the defence area or for the equipment of hospitals. Secondly, it has a responsibility to inform objectively the citizens and consumers and to raise awareness of all stakeholders about the actual and potential benefits and threats of the technology, and in particular to ensure a high level of protection of personal data to strengthen consumer trust in RFID. Thirdly, the public sector promotes research and development projects to explore the range of scientific and technological problems and their solutions, and it supports the launch of pilot and implementation projects, notably in areas of general or public interest health, waste management and control, urban transport, e-passports, etc. As far as the European Commission is concerned, it recently called on Member States to make radio spectrum available for the so-called Ultra High Frequency (UHF) RFID tags. The Member States in the Radio Spectrum Committee have approved the proposals to open the UHF band to RFID. This measure has created Europe-wide regulatory certainty for the deployment of RFID in the UHF band for which typical application areas are container and palette tracking. In its recent RFID Communication, the EU Commission has also acknowledged the importance of this technology for supporting the Lisbon strategy. It has suggested further research and innovation support to strengthen European competitiveness and enhance the quality of life of European citizens. This now forms part of the information and communications technology (ICT) research priorities of the EU s current research programme. In addition, in the Competitiveness and Innovation Programme large-scale pilot projects will further stimulate innovation. The EU Commission increasingly uses impact assessments to measure the effectiveness of its actions. Whenever legislative measures are proposed, an ex ante impact assessment is mandatory. In addition, for RFID projects under the EU s research programme a follow-up evaluation of the results will be made. 20

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