McKinsey: Nicolas, you’ve been main Bpifrance since its inception greater than a decade in the past. How did that come about?
Nicolas Dufourcq: Emmanuel Macron, who was then a senior member of President François Hollande’s authorities, known as me in October 2012 to debate the rejuvenation of entrepreneurship in France. When he supplied me the chance to guide Bpifrance, which was created in December of that 12 months, I felt I needed to do it, since I already had an aspiration to create a personal financial institution with a public mission.
McKinsey: What units the Bpifrance mannequin other than comparable establishments elsewhere?
Nicolas Dufourcq: We’re the French nationwide company for innovation, and allocate €7 billion of innovation funding yearly within the type of subsidies, reimbursable advances, and smooth loans. We’re additionally France’s export credit score company (ECA), and assure export credit totalling €20 billion per 12 months. On prime of that, we’re a serious consulting boutique for small and medium-size enterprises (SMEs) as properly, and conduct greater than 5000 consulting assignments per 12 months.
We accomplish all this with solely 3,500 workers, so it’s a small, homogeneous group, with none silos. We function 55 branches all through France, so whether or not you’re an entrepreneur in Troyes, Champagne, La Roche-sur-Yon, Vendée, or Avignon, your native Bpifrance department has all of it: loans, fairness, export credit, consulting, and innovation. We attempt to create a dialogue with the entrepreneur that enables us to knit a tailored resolution.
We aren’t right here to push merchandise. We’re right here to search out options so entrepreneurs really feel they’re coping with somebody with the utter need to assist them obtain their goals with the entire toolbox. After all, we typically should say no. Our mantra is to at all times respect the dream of the entrepreneur, and attempt to obtain it as a lot as attainable. However typically, it’s not attainable. That mentioned, we’re additionally very worthwhile.
McKinsey: How did this mannequin develop over time? I assume all the pieces didn’t occur suddenly from the beginning.
Nicolas Dufourcq: No, and after I began, I used to be surrounded by individuals who advised me, “After all, you’ve been requested to do that by the president of the French Republic, however you’re not going to have the ability to do it. We’ll be certain that the folks doing loans by no means discuss to the folks doing fairness, and the folks doing fairness by no means discuss to the folks doing innovation. And by the best way, all this will probably be separated into siloed subsidiaries with outdoors shareholders, which is able to actually make it inconceivable to realize Bpifrance’s dream.”
So my first struggle was the key one, making it inconceivable for these folks to make my life inconceivable, as a result of I wished to create one thing one hundred pc homogeneous. For instance, my govt committee is made up of the heads of loans, fairness, innovation, ECA, and consulting, they usually all work collectively, as a result of now we have just one buyer. If you’re an SME, you possibly can’t afford to have seven cellphone numbers for one financial institution. You need a single level of contact, and that is what now we have achieved.
McKinsey: How did you flip Bpifrance right into a catalyst for innovation on this nation?
Nicolas Dufourcq: We determined to place large quantities of cash into French enterprise capital (VC) funds to groom an ecosystem of personal funds with whom we may co-invest, and this effort was profitable. At present, we finance some 200 VC funds in France, and are investing €700 million to €900 million in these non-public funds yearly. They’re the essential infrastructure for capital allocation to modern French entrepreneurs.
McKinsey: We’ve mentioned the dearth of enormous European innovators and champions. Our personal analysis reveals that we produce plenty of main analysis and make investments lots in R&D, however don’t have as many champions as North America and even China. How can we create a context the place Europe can produce extra financial champions and innovators?
Nicolas Dufourcq: It’s true. A number of French, German, Dutch and different European analysis and science mainly goes into American corporations. In the event you have a look at medtech, biotech, medication and digital well being, there may be large consolidation into American powerhouses that we lack in Europe. After all, now we have world-class pharmas too, notably Swiss and a few French and German, however it’s not sufficient.
However when these European corporations purchase start-ups, it’s at all times only a few in Europe, in comparison with important investments in america or Israel. We have to create an setting that fosters the affected person build-up of start-ups, so American rivals can not utterly take up them when they’re small. The European software program panorama is usually owned by funds, not by households, so we all know the place we have to act, and are conscious of our weaknesses. However it should inevitably take time.
McKinsey: In your conversations with European trade leaders, what are your asks by way of fostering this new breed of European champions?
Nicolas Dufourcq: Effectively, I ask them to purchase start-ups. I ask them to be daring in open innovation methods. I ask them to create company enterprise funds. I ask them to recruit researchers. I ask them to place in place entrepreneurship schemes. I ask them to speak to the brand new ecosystem of children constructing European deep tech.
You recognize, Bpifrance generates 400 deep tech start-ups per 12 months. We began at 50, and our goal is 500 yearly. So cumulatively, we’re creating a major inhabitants of folks that should be utterly linked to large European companies. And though it’s coming alongside, it might be quicker.
McKinsey: We haven’t talked about expertise, each managerial and scientific. How does Europe fare on that dimension? Do now we have the expertise pool essential to create these champions?
Nicolas Dufourcq: I feel we do. After all, there may be large competitors, however it’s not attainable for European entrepreneurs to say, “I’ve to depart for america as a result of it’s inconceivable right here.” Fortunately, that’s a factor of the previous. In case your thought is sweet, you’ll be supported in all verticals, be it deep tech, medtech, biotech, software program as a service (SaaS), and so forth.
Now, the issue is at all times the entwining of scientific and managerial skills in an organization, however it’s progressing. And what’s occurring in France, Israel, and Germany—and already occurred within the U.S. and the UK—is the rise of serial entrepreneurs. They create new corporations, have quite a lot of experience, and appeal to plenty of fairness as a result of they’re already wealthy. They’re additionally far more affected person and take the time to construct long-term corporations as an alternative of promoting them when they’re too small.
McKinsey: Let’s look ahead. You’ve been at Bpifrance ten years. What are your aspirations for the following ten years? How do you see the longer term and what’s your ambition for Bpifrance?
Nicolas Dufourcq: We need to double the variety of entrepreneurs in France. Which means doubling all of the verticals, not solely the deep tech start-ups, but additionally the boutiques, all the pieces. However doubling the proportion of entrepreneurs within the French inhabitants would solely imply returning to the ratio that existed within the Nineteen Sixties. Between then and roughly 2010, there was a relentless improve of salaried folks, folks with a wage mindset. However then one thing clicked, and the proportion of independents and entrepreneurs has began to develop once more.
However we’re nonetheless not the place we had been in 1968. So we need to push that, and we’re placing plenty of vitality and cash into an all-out effort to encourage entrepreneurship. We expect it’s a part of trendy life. You don’t should be an entrepreneur all of your life. However after you have been an entrepreneur for not less than a short time, it utterly modifications your mindset.
We additionally need to partially reindustrialise France. At present, trade includes 10 p.c of GDP, however we wish it to achieve 12 p.c, which is able to imply a median development of 1.5 p.c per 12 months. That’s lots, and we expect it’s going to take ten years. To get there, we need to foster the development of a median of 100 factories per 12 months, which is 100 greater than the pure pattern.
For instance, this morning I used to be within the north of France to inaugurate a battery gigafactory. We need to reindustrialize France although innovation, with natively inexperienced, decarbonized factories. That would be the foundation of our reconquest of France’s conventional export place, as a result of right now, the scenario is catastrophic. We now have a humongous export deficit.
And if we need to remedy that downside, there isn’t any different resolution than reindustrialising, which suggests encouraging engineers to affix hardcore industrial initiatives and SMEs, which is a holistic problem. So we work with faculties and municipalities to search out locations appropriate for factories, we work with researchers to encourage them to grow to be industrial entrepreneurs, and finance all these efforts. That’s the second goal.
Our third goal is sovereignty. As a result of once you go into French pharmacies, there are some French-made medicines you can not discover anymore, as a result of they’ve been offshored to generic suppliers. We suffered a extreme scarcity of paracetamol not way back, so now we have to relocate some essential components of our sovereignty to France to keep away from a repeat of such a scenario. Not all, in fact, however a few of them, which we’re financing with fairness and loans.
My ultimate goal is the democratization of personal fairness. Everyone in France should be capable of spend money on non-public fairness, which is a superb asset class. In order that’s what now we have finished by permitting the French folks to spend money on the Bpifrance portfolio with minimal tickets of €1,000, and we are going to push that massively.
McKinsey: Effectively, that appears like a fairly busy agenda for the following few years.
Nicolas Dufourcq: Sure, and it’s a great one.