NULL Large companies – AFEP

Large companies
serving the French economy

INSEE has produced a classification of the economic network, broken down into four categories of companies:

  • microenterprisesemploying fewer than 10 people with an annual turnover or balance sheet total not exceeding €2m;
  • small and medium-sized enterprises (SME)employing fewer than 250 people with an annual turnover not exceeding €50m or balance sheet total not exceeding €43m;
  • intermediate-sized enterprises not in the SME category, employing fewer than 5,000 people with an annual turnover not exceeding €1,500m or balance sheet total not exceeding €2,000m;
  • large companies are enterprises that do not all into the previous categories.

A high concentration of the French productive network…

These results demonstrate an unquestionable fact: the very high concentration of economic activity carried out by a small number of companies. In an economy containing over 3.7 million companies in 2013, nearly 6,000 of these (0.15% of the total) represent at least half of each of the main indicators: 51% of jobs, 56% of added value, 64% of turnover. Each with over 250 employees, these enterprises are intermediate-sized enterprises (5,300) and large companies (274).

If we look at investment and exports, two essential components of economic growth, the concentration is even higher: according to INSEE, the 50 companies that have made the largest investments represent 27% of investment (51% for the first 500 and 7% for the first 5,000). With regard to export, the first 50 – not necessarily the same as for investment – represent 34% of the total (60% for the first 500 and 86% for the first 5,000).

…and a fundamental role played by large companies…

With nearly 300 groups (274 including financial and insurance activities, 248 non-financial corporations), the large companies category is the leader in each of the main indicators: 31% of jobs (4.3 million employees), one third of added value, half of export turnover.

This leading position by large companies is highly beneficial for their employees, whose average net pay is 19% higher than the national average (€ 31,440 per year vs. € 26,400). This is true regardless of the socio-economic category examined.

Large companies are highly international and earn an increasing share of their revenue from activities in the various locations where they have operations. Far from being a threat, this is in fact a necessary condition of business success and of great benefit to France. According to the Banque de France, in the scope of the  CAC 40 index, 44 groups contribute decisively to the balance of payments of France’s current account. As an illustration of this, the €45bn in direct foreign investment income should fully balance out the trade deficit in 2013. This revenue is therefore an essential resource for the French economy.

Headquarters of large multinational companies throughout the world

…which should mean in terms of economic policy

Although fully integrated in global value chains, large companies have their roots in France, particularly when it comes to the location of their decision-making centres and research units. In a highly competitive international economy, this is fundamental from a strategic point of view. For this reason, restoring local appeal is one of AFEP’s key concerns: the presence of decision makers in France is of major importance to the country.

This ambition must be translated practically into a cross-sectoral economic policy favouring wealth creation. At a time when public debate still too often pits SMEs against large companies and companies against employees, leading to multiple inefficient segmentations (tax, social and regulatory thresholds), this way of thinking must be radically changed by bringing all the stakeholders together to create a virtuous dynamic. Large companies, intermediate-sized enterprises, SMEs and start-ups cooperate actively at local level but also in terms of international development, boosting the growth of collectively enriching, living ecosystems such as competitiveness clusters. In the same way, the success of a business is intimately linked to the quality of its human resources, who must be supported and valued. Economic policy must therefore fully cover the issue of initial and continuing education in its objectives, as this is essential for reinforcing both the productive network and social cohesion.

A shared ambition, a global strategy and coherent action should be the three guidelines to follow in the years to come. Large companies are keen to serve the French economy by participating actively in a new cycle of sustainable growth that will create business and jobs, and prepare for the future.