The debate over the negative effects of deindustrialization is ongoing, but it’s important to take a closer look at specific industries in the French productive specialization over the past decade. In particular, high-tech manufacturing and ICT services have shown resilience and growth forces, despite the overall economy moving towards tertiary sectors. This article explores these dynamics and sheds light on their significance.

The Resilience of High-Tech Manufacturing

Over the past decade, the decline of industrial activity in France has led to widespread concern about the potential loss of jobs and economic stability. However, data reveals that high-tech manufacturing has demonstrated substantial resilience in comparison to low-tech counterparts. From 2010 to 2019, high-tech manufacturing experienced more significant growth in value added compared to the broader merchant sector and also outpaced low-tech manufacturing significantly.

• Average annual value-added growth between 2010 and 2019 for the merchant sector: 2.1%
• Average annual value-added growth for high-tech manufacturing: 1.2%
• Average annual value-added growth for low-tech manufacturing: 0.3%

High Hourly Wages and Labor Productivity

This increased growth can also be seen in other economic indicators such as hourly wages, labor productivity, average profit margins, and concentration levels. High-tech manufacturing has consistently performed better across these metrics than its low-tech counterpart. Moreover, competitive pressures may have forced some companies in the high-tech sector to increase investment in R&D and consolidate market power, which could explain why profit margins have grown for larger companies.

Re-evaluating the Role of Industry

It’s important to analyze industry through a more nuanced lens and move beyond the simplistic dichotomy of services versus industry. In 2019, manufacturing, trade, and business services collectively accounted for nearly three-fifths of value added in the merchant sector. This is evidence that industry should not be dismissed as economically irrelevant, particularly when focusing on high-tech manufacturing.

Employment-Intensive Digital Activities Dominate Growth

Over the past decade, employment-intensive digital activities – primarily within high-tech manufacturing and ICT services – have played a significant role in driving economic growth. A closer examination shows that these sectors are responsible for:

• Growth in value added
• Increase in qualified personnel
• Rising investment
• Boosting exports

This indicates that high-tech manufacturing and ICT services are not only resilient but also prove to be crucial drivers of growth in France’s tertiary economy.

The Significance of High-Tech Manufacturing and ICT Services

Between 2010 and 2019, three sectors dominated the French productive fabric: high-tech manufacturing, business services, and ICT services. These sectors demonstrate the significance of industrial activity in a primarily service-driven economy.

Positive Learning Effects

A detailed analysis of productivity growth in these sectors reveals relatively significant positive learning effects compared to other areas of the merchant sector. In other words, high-tech manufacturing and ICT services showcase innovation and efficiency improvements over time, which set them apart as key economic contributors.

Productivity Gains and Good Wage Levels in Services

While manufacturing remains essential for export trajectories and skilled job growth, high-quality services are also vital to France’s economic landscape. Industries such as ICT services have shown impressive growth in business creation and value added, which is essential for sustaining a healthy economy.

Conclusion: High-Tech Manufacturing and ICT Services Represent the Future

As France continues to move towards a tertiary-based economy, it’s crucial to recognize the ongoing importance of industrial activity – particularly within high-tech manufacturing and ICT services sectors. These areas demonstrate resilience, productivity gains, and high wage levels that contribute significantly to overall economic growth. Therefore, investing in these sectors and fostering their continued expansion should be a priority for policymakers and businesses alike.