Paris, by far the largest metropolitan area in Continental Europe, should be the continent’s economic, financial, and corporate center. As Brexit approaches, the city would seem to be well-placed to receive any head offices, global consultancies, and banks that plan to leave London. Yet the evidence to date doesn’t point to Paris as a premier relocation destination; Amsterdam, Frankfurt, and other smaller cities are beating it out. Goldman Sachs recently announced that it will quintuple its office space in Frankfurt, for example, not in the City of Light. Yet, if one is to believe recent press coverage, the French capital is the hot new startup location—“Startup Republic,” one trade publication dubbed Paris—but up to now, at least, the city has consistently punched below its weight in the new economy.

The reasons are many, including France’s cumbersome centralized bureaucracy and overregulated labor market. But a key factor is Paris’s wasting of its greatest potential asset: vibrant neighborhoods where artists, entrepreneurs, and investors can mingle and spark innovation. Success in the digital era is all about synergy—and thriving, startup-rich urban neighborhoods are where it happens. One would normally have expected such synergistic neighborhoods to emerge in Paris; but a visitor would be hard put to find any. What synergy Paris does have, it risks squandering.

Paris’s urban assets are unmatched. No city has more walkable, lively, and beautiful areas. And Paris may have invented the “creative class.” After all, it’s here that the term “bohemian” was born—long before New York, Boston, or San Francisco saw their first sidewalk café. Puccini’s nineteenth-century opera La Bohème was set in Paris. Not so long ago, the Café de Flore in Saint-Germain-des-Prés and the Café du Dôme in Montparnasse were the obligatory watering holes for the world’s literati. Paris’s Left Bank is as lively today as it was a century ago, its fabled boulevards lined with sidewalk cafés, bookstores, and produce markets, and crowded with innumerable pedestrians. The city’s diverse neighborhoods have lost little of their architectural splendor and Old World charm. Paris also boasts a superb public transit system and remains, despite recent horrific terror attacks, a relatively safe city. Apart from its crime-wracked banlieues, Paris is, on the whole, well run.

And Paris’s digital economy is growing. Venture capitalists invested $2.7 billion in France last year (mostly in Paris), behind Britain ($3.7 billion) but ahead of Germany ($2.1 billion), according to VC firm Atomico. Firms like the ride-sharing unicorn BlaBlaCar and advertising startup Criteo have attracted huge investor sums. An embryonic techno cluster has emerged just north of what used to be Les Halles, a now-demolished food-wholesaling market. Paris, in partnership with the national government, has announced plans to create what’s touted as the largest digital startup incubator in the world, “Station F,” located in a converted storage facility in the city’s south end.

Nevertheless, Paris has yet to give birth to a full-power new-economy scene, worthy of a city its size. No Parisian equivalent exists, for example, of Manhattan’s new-economy neighborhoods of Tribeca, SoHo, NoHo, and the Flatiron, dubbed Silicon Alley and tucked away between midtown’s entertainment and corporate core and the downtown financial district. By some accounts, Manhattan is home to America’s second-largest digital startup scene after Silicon Valley. Nor does Paris boast anything comparable with London’s Shoreditch neighborhood—Silicon Roundabout, as locals call it—a remade working-class area a stone’s throw from the City (the London financial district) and thus facilitating formal and informal contacts among bankers, venture capitalists, and computer nerds with entrepreneurial ambitions. What these neighborhoods have in common, beyond their central location, is high density, walkability, and easy access to transit. Former industrial and warehousing areas, they now feature converted lofts, condos, and trendy cafés and boutiques—the natural habitat of young knowledge workers who drive the innovation-based economy.

Further, the Paris tech scene, at least from my observation, is mostly homegrown—again, in contrast with its competitors. (In Silicon Valley and Alley, for example, foreign computer engineers—including from France—are legion.) One justification for Station F, it’s worth noting, is to attract foreign entrepreneurs to Paris, suggesting a recognition of the problem. Ultimately, digital success depends on human capital—nurturing it, attracting it, and holding it. It’s not that Paris lacks human capital; its engineering schools are world-class. But far too many graduates still seem inclined to seek success abroad. (See “Gloomy France,” Winter 2014.)

Why has Paris struggled to ignite a full-fledged new-economy boom? France’s rigid labor market, high taxes, and complex regulatory environment are doubtless partly to blame, as noted earlier. Though some regulations have been eased, starting a business in France remains more complicated than elsewhere, as I’ve heard time and again from Quebecois trying to set up firms in France (and from French entrepreneurs who’ve relocated to Quebec). France’s young president, Emmanuel Macron, is pushing to change things with his ambitious plans to make the French economy more globally competitive, but the reforms have a ways to go.

A less recognized part of the problem, however, is a number of urban-planning decisions that have made Paris less of a dynamo of learning and intellectual creativity than it otherwise might be. It’s almost as if the French state has set out to dampen Paris’s potential as an engine of economic growth. And by Paris, I mean the core city, with its roughly 3 million inhabitants, home of the Sorbonne and other legendary institutions of learning and science.

The University of Sorbonne in Paris, 1938 (Sueddeutsche Zeitung / Alamy Stock Photo)
The University of Sorbonne in Paris, 1938 (Sueddeutsche Zeitung / Alamy Stock Photo)

A military analogy helps illumine what is happening. An old military proverb says that generals are always fighting the last war. Recall the Maginot Line, the tunneled fortifications that France built along the German border after World War I. That conflict was infamously a war of attrition, with armies moving slowly and opposing forces dug in along a line of trenches connecting vast systems of tunnels. Building an impregnable line was the obvious way to protect territory in that context. France’s general staff, recalling World War I, never imagined that the next war would be one of rapid movement, dictated by planes and armored tanks. The Maginot Line did nothing to stop the German panzers from overrunning France in May 1940.

The bureaucrats and others responsible for planning France’s contemporary university system are also fighting the last war, so to speak, in their adherence to concepts that went out of fashion in North America long ago. After World War II, Berkeley, Stanford, and other great American universities became world leaders in producing technological breakthroughs, stunning the French educational elite and reinforcing their sense of cultural loss as the French language slipped behind English as the universal language of science and commerce. America’s secret was the university campus, a self-contained, landscaped city of learning, often located at a distance from the urban center—a concept foreign to France, where universities were resolutely urban. Ergo, if France was to meet the American technological and economic challenge, it would need to copy the American model: build suburban campuses, the bigger the better.

Nothing is inherently wrong with suburban campuses, provided that they are well designed and constitute an addition to the wider urban economy, not a transfer of resources at the expense of existing institutions and synergies—but that kind of transfer is exactly what France is setting out to do.

Universities and other institutions of research and higher learning are vital players in fostering economic growth, not only as generators of human capital but also as fountainheads of new ideas and technical progress. Engineering schools and science faculties are especially important in the knowledge-based digital economy. It’s impossible to imagine the emergence of Silicon Valley as a technology empire, for example, without Stanford, a strong, science-based university since its 1891 inception. The first Valley startup firms in the 1950s had their roots in Stanford and its newly created industrial park; the tech revolution exploded during the heyday of suburban expansion and the supercomputer. But while large research campuses like Stanford’s will always be needed for certain kinds of projects, the advent of the Internet and the miniaturization of computer hardware have altered the spatial dynamics of the high-tech sector—innovators don’t need to take up as much space anymore.

The golden age of suburban campus construction is now past in North America. The strengthening of urban campuses tends to be a bigger focus these days. In my hometown of Montreal, the École de technologie supérieure, a four-decade-old graduate engineering school, is housed in a recycled brewery on the edge of the city’s central business district—a conscious planning decision. The area around the school has emerged as a technology startup cluster.

New York provides a striking example. In 2011, then-mayor Michael Bloomberg announced that the city would offer city-owned land plus $100 million toward the creation of a world-class applied-sciences university campus in Manhattan. Bloomberg’s initiative led to Cornell Tech, a joint venture of Cornell University and Technion–Israel Institute of Technology. A first mini-campus opened in Chelsea in 2012, in the heart of Silicon Alley. An ultramodern campus, with a $2 billion price tag, is under construction on Roosevelt Island, one subway stop from central Manhattan. Cornell Tech welcomed its first students in 2017.

New York is betting on the synergies between elite technology schools and budding entrepreneurs to nurture a world-class tech cluster, building on the allure of bohemian neighborhoods for digital workers—the Big Apple’s answer to Stanford, but in a thriving urban setting. Already, New York City–based startups rival San Francisco’s in attracting venture capital and in job creation. Seth Pinsky, former head of the city’s Economic Development Corporation, described the establishment of Cornell Tech as an “Erie Canal moment” that could mark the beginning of New York’s overtaking of Silicon Valley as the nation’s leading high-tech startup zone—just as the 1825 completion of the canal gave New York direct access to the growing markets of the West and the Midwest, ensuring that it, and not Philadelphia, became America’s financial and commercial center.

But French and Paris decision makers appear intent on suburban campus construction. I’ve worked on one, la Cité Descartes, a fairly new campus, still not finished, located in the new town of Marne-la-Vallée, a 30-minute train ride east of Paris. Its buildings are modern and generally functional but also sterile; the campus remains devoid of the interaction needed for intellectual ferment. I found little active student life—not even a bustling café. After classes, students and faculty generally take a train or car home. La Cité Descartes, moreover, is based largely on department transfers from central Paris, including the École des Ponts, France’s largest civil-engineering faculty, previously located in Paris’s Latin Quarter, where it was founded two centuries ago. The school is among the more notable examples of suburban relocation but far from the only one. Since the 1960s, the French government has systematically transferred university faculties and teaching and research institutions out of Paris to outlying locations, which tend to be just as lifeless.

The biggest transfer is yet to come: Saclay, a high-tech campus of pharaonic proportions under construction in the small suburban community of that name, located about 16 miles southwest of Paris. Approved by the French government in 2010 and planned for completion in 2020, the project calls for the transfer of six major university faculties from central Paris. (The École Polytechnique, another major engineering school, relocated there from the city some time ago.) Saclay’s promoters want the campus to be a French Silicon Valley; I fear that it will become, instead, modern France’s economic Maginot Line.

Planned for completion in 2020, the Saclay campus, located 16 miles southwest of Paris, is envisioned as a French Silicon Valley. (JACQUES DEMARTHON/AFP/Getty Images)
Planned for completion in 2020, the Saclay campus, located 16 miles southwest of Paris, is envisioned as a French Silicon Valley. (JACQUES DEMARTHON/AFP/Getty Images)

The economic underperformance of Paris has a second dimension: French leaders’ fixation on signature cultural monuments and heritage preservation. The need to protect Paris’s architectural legacy is indisputable, but the experience of other European cities, including London, shows that preservation and modernization, including higher buildings, aren’t incompatible.

Admittedly, Paris’s experience with office towers hasn’t been an aesthetic success. The city’s tallest building, la Tour Montparnasse, built in 1973, is a monstrosity. (See “The Architectural Sacking of Paris, Winter 2018.) Its unsightliness has likely contributed to continued Parisian aversion to taller buildings. Strict heritage protection, though, has meant the transfer of Paris’s main business district to the city’s western edge, with the first office towers going up in the 1970s and since expanded. La Défense, as this centrally planned business district is known, today contains the main offices of Paris’s leading banks and financial institutions. The district is cold and utilitarian, with no real street life, and it is too far from the bohemian neighborhoods of central Paris to generate the spontaneous interaction between startups and financial backers possible in Manhattan or London.

The shifting of Paris’s central business district to the city’s periphery sends a clear message: the business of Paris is not business. Compare this approach with that of, say, Pudong, Shanghai’s state-planned central business district, whose majestic towers loom over the Bund waterfront promenade across the river—the heart of the previous business district. The message in Shanghai is that Pudong is essential to its future and identity. Indeed, Pudong’s Oriental Pearl Tower has become the city’s icon, pictured on countless postcards. Few postcards in France depict La Défense, lost in its modernist suburban exile.

Paris’s recent history is replete with missed opportunities for strengthening the city’s position as a center of business and tech innovation. When Les Halles wholesale market was torn down in 1971, the city could have consolidated its then–business core with a new office complex, university faculty, or, ideally, both. Instead, a shopping mall went up—one of Paris’s ugliest structures, now under reconstruction as it searches for a mission. A few blocks away, the Centre Beaubourg, barely less ugly, bestowed on Paris in 1977 by outgoing president Georges Pompidou, was a needless structure, another museum (devoted to the plastic arts and design) in a city that does not lack museums. Here, too, Paris could have welcomed, say, a university faculty in search of space or new offices, but Pompidou wanted a monument with his name attached.

As an economic opportunity lost, the Gare d’Orsay rail station presents a particularly galling example. Located on the left bank of the Seine in the Latin Quarter, the station, a beautiful nineteenth-century structure, ceased to operate in the early 1970s, providing an ideal chance to strengthen Paris’s innovation mission by replacing the station with a new forward-looking institute of higher learning and research. In 1986, however, the French government, after roughly 15 years of procrastination, decided that the building would be used as a home for yet another museum, the Musée d’Orsay, which features French Impressionist and post-Impressionist art.

Tourism is the industry that most benefits from such choices. Paris receives more visitors annually than almost any city in the world, and many of the world’s rich and famous maintain apartments there. But tourism and vacation homes, however welcome in themselves, are fragile foundations for urban economies; they are sensitive to downturns, don’t produce high wages, have minimal multiplier effects, and—as with the Musée d’Orsay—can crowd out more valuable uses in a highly regulated and pricey real-estate market.

Paris obviously isn’t about to hollow out like an American Rust Belt city. One cannot easily undo centuries’ worth of investment in human capital, infrastructure, and all the little things that make a city a pleasant place to live and visit. Paris’s administrators have done numerous things to improve the city’s quality of life: they have made many streets more bicycle-friendly; embraced ride-sharing; landscaped the banks of the Seine; and greened the environment with pocket parks. Notwithstanding French planning mistakes, Paris remains one of the world’s urban jewels. Yet a great metropolis must be more than just a theme park or museum. It also needs to provide space for ferment and serendipity, for the churning of ideas—if it is to fulfill its urban mission as a source of innovation, enterprise, and economic growth. Whenever I visit New York, I sense the energy of the city, the wild urban buzz that is difficult to quantify but unmistakable. When I walk the boulevards of Paris, I sense nostalgia, for lack of a better word—an urban buzz still there but hidden or suppressed.

Paris’s economic underperformance is also a cautionary tale, a warning. No city, even the greatest, is immune to the folly of national governments.

Top Photo: La Défense, a major Parisian business district (Image Source / Alamy Stock Photo)


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