Cross-interview: Laurent Saint-Martin & Guillaume Richard, two EDHEC graduates at the supervisory committee of the French government's "Future investment programme"

In the world of innovation, the French government has taken initiatives relatively unknown to the wider public. For its fourth “promotion”, the “Future investment programme” (PIA), established in 2010, has set aside €20 billion over a four-year period to develop the society of the future. Here, Guillaume Richard (EDHEC Master 1996) and Laurent Saint-Martin (EDHEC Master 2009), two graduates reappointed to the PIA supervisory committee, discuss both the public and private sectors driving these changes and the regional realities on the ground. We wanted to find out more about their involvement in this strategic domain serving future generations.

Can each of you tell us about your job and how innovation is a part of it? 

Guillaume Richard: I’m the chairman and founder of OUI CARE, whose primary brands are O₂ and Apef, one of a dozen or so personal and home care services operating in France and abroad and serving private customers. We have around 18,000 service providers, mainly working in housework, ironing, childcare, support for the elderly and disabled, gardening and home improvement. Innovation comes into play across the full spectrum and is not limited to technical, technological or industrial areas. These innovations can be digital, with service innovations, process innovations or innovations in HR management. There are many service companies whose key innovations are process-based, like Airbnb (now more valuable than Accor without owning any hotels), Uber (which doesn’t own a single taxi or have a single employee) and Google. One of the great strengths of Amazon is its Cloud management. All of the processes these businesses have implemented have much more impact than disruptive technologies. All too often, France has been behind the creation of cutting-edge, high-performance technologies (Rafale, Concorde and even Minitel), but never managed to sell them. Thinking about things in the way they are used and their market is what I try to contribute to the PIA supervisory committee.

Laurent Saint-Martin: I’m the MP for Val-de-Marne and rapporteur general of the finance, general economy and budgetary supervision committee at the National Assembly. Innovation in my job can be approached from a public policy perspective, with notions like structural competitive advantage and investments to create the growth of the future. But it is also closely linked to my personal background. I started my career at Oseo (NDLR: then a subsidiary of Bpifrance) in 2010 in Lille as head of business and innovation. I used to provide financing to small SMEs with research & development or incremental innovation projects, etc. I’ve always felt that the complementarity between public and corporate investment is the best driver of jobs, growth and more generally the best way to drive prosperity in this country. That’s something that has always stayed with me. When I entered politics, I developed the perspective of a “public decision maker” regarding innovation. In particular, I helped calibrate fiscal tools like research tax credits, which is a major incentive for innovation in France. Our economy remains quite powerful in this area, boasting the highest-quality research and engineers.

And on the PIA supervisory committee, how do you decide which subsidies go to the projects put forward?

GR: Our role is to assess the projects presented, which means we don’t have any decision-making power on the amount or direction of the investments made. We monitor the intelligence of the procedure and establish recommendations going forward. We’re talking about tens of billions of euros going to thousands of different projects. We wouldn’t have the time to look at each one, our role is a supervisory one conducting ex-post analysis through the reports that are drawn up, rather than upstream intervention.

LSM: Absolutely, the committee is a governance tool. As for elected representatives, there are four parliamentarians as well as a regional chairperson and a number of “qualified” individuals like Guillaume, alongside other representatives from companies and higher education. It’s a group that engages more in a process of reflection on strategic directions than an investment committee working through each dossier one by one. The SGPI (general secretariat for investment) is a body that falls under the authority of the Prime Minister. Its role is to apply the strategy set out by government. Our job is to make sure that the links with the various economic players and all of the stakeholders in the investments and innovations of the future are robust. Whether we’re talking about local authorities, businesses or other stakeholders, it’s about reminding the executive through our supervisory role that everything being done is in line with expectations on the ground.

GR: That’s what I was saying about not necessarily developing certain technologies that are intellectually extraordinary but offer no prospects going forward. For example, last year we discussed the development of a 4^th-generation nuclear reactor. Except that the time needed to deploy it means that that it would only be economically and industrially operational in 80 to 100 years. Which amounts to saying that there is no economic or industrial point to developing nuclear reactors. We make sure that the link between the innovations implemented and their economic and industrial uses is real and in play.

Does that complementarity between political figures and business allow you to prepare legislation that favours innovation?

LSM: Generally speaking, the ongoing exchanges and collaboration between economic players and the legislature is necessary. I’m a great advocate of this. Everything we vote on in the National Assembly must systematically be judged against the realities on the ground, and we have to evaluate public policies. Naturally, that involves checking whether what has been adopted matches the facts, and also reporting on the effectiveness of public measures taken. On taxation and public expenditure, the established standard sometimes complicates the lives of businesses without any real purpose. Efforts to simplify things are needed, and that can only be achieved as part of a healthy relationship between businesses and the legislature. Social partners and associations have a key role to play.

GR: There is also a whole swathe of investments for the future that relates to higher education and universities. Paris-Sud University, which has significantly risen in the international rankings, was supported by PIA investment funds. We are also involved in evaluating what is being done in this domain. Investing in the future involves research and academic excellence, which is one aspect of the broader investment plan. The evaluation criteria are not the same as the economic criteria used to assess technological innovations.

What does the notion of “future generations” mean to you?

LSM: Everything I do from the moment I get up in the morning is for future generations. It is systematically the time horizon that public decision makers focus on. Currently at the National Assembly, as part of a process lasting many weeks, we are debating a bill on “Climate and resilience”, based on proposals from the Convention Citoyenne pour le Climat (citizens’ climate convention). We’re talking about long-term, generational challenges that will have an impact in 20 to 30 years and in which the new generation is heavily involved and invested. Regarding the PIA, the notion of future generations is intrinsically linked to these types of investments, whose financing and programme content have been locked in for the long run. We are reflecting on the markets of the future for future generations.

GR: The objective of this future investment plan is to strengthen all segments of industry or economic activity. It really is about working on the future. The public powers are capable of funding programmes whose economic profitability has absolutely not been proven, and which private investors alone would not be willing to back. It is extremely difficult for a company alone to finance fundamental research (green hydrogen, quantum computing, etc.) which will only produce results 10 to 15 years later, especially given that their return on investment is far from certain. The level of investment is often very high and a boost from the State is often needed. Within the big objectives of the PIA generally, each euro invested by the State (and therefore by French citizens) must be able to support at least 2 in terms of private investment. This is also a way to automatically ensure the quality of investments because the State is not the only one granting subsidies. Outside universities and fundamental research, there are no future investments in which the State is the only investor. This has a multiplying effect that is not negligible, but it is also a failsafe mechanism. If a company puts up 100, the State will be able to contribute 50 but will never put up all 150 on its own. This is a way to ensure that investments are not made without an objective of achieving future outputs, and that adds a multiplying effect in terms of private expenditure, complementing public expenditure.

What are the challenges for regions in terms of innovation? 

GR: There is a general trend towards decentralising economic power in France, made possible by the NOTRe legislation (NDLR, law of 7 August 2015 known as the “new territorial organization of the Republic”, which grants new powers to regions). The regional level is very well adapted to look at a certain number of innovative projects that we would struggle to see from Paris. Stakeholders and regions currently have significant economic power, not to mention the strength of proximity at a regional level. It is only natural for regions to be stakeholders in these public investment programmes.

LSM: The amounts at stake in the intervention by regions compared to the State, and particularly during the current crisis with the recovery plan, are nonetheless highly disparate. This reality reflects the skills and capacity for financial deployment, given that they don’t all have the same capacity to take on debt. While regions are very useful in terms of economic development, they remain minor in financial terms compared to the rest. A region must offer economic support and not only serve as a funder of operations. They’re responsible for governing the economic order in their area that links up with Europe and the State. They’re like an economic control tower that identifies innovation projects, offering support and prospection.

What link do you see between your missions and the EDHEC Alumni motto, “Share, Care, Dare”? 

GR: Well on Care, I would say OUI CARE of course! Dare, because we want to become global leaders, and we have long made our ambitions clear. And lastly Share, because I think the only way to succeed in an ambitious project is to share its successes and the fruits of growth with team members.

LSM: It’s a good trio to represent the way we are accompanying the country through this difficult period. Care naturally relates to the emergency plan with all of the measures that have been put in place: partial wages, solidarity fund, State-guaranteed loans, support for the most vulnerable, etc. Dare relates to our recovery plan. The SGPI is surely Dare squared. And Share is about redistributing the fruits of growth over time. It is the collective agreement we must all commit to: there can be no Share without Dare.

GR: To build, we must create wealth and then share it.