France - Country Commercial Guide
Digital Economy
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Overview

National Focus

France is committed to becoming a global leader in technological and industrial innovation, reflecting its proactive stance on advancing its digital economy. Through initiatives like France 2030, which consists of a €54 billion investment to boost key sectors and foster emerging technologies, alongside other strategic investments, the country is focusing on digital security and nurturing startups. With 92.6% internet penetration and robust growth in digital engagement, France is poised to enhance its industrial capabilities and secure a competitive edge in the global digital landscape.

Most laws are set at the EU level. The Digital Economy Chapter of our Country Commercial Guide for the European Union provides a more comprehensive overview.

Projected Digital Economy Growth (computer software and services)

Despite economic and geopolitical uncertainty, the French digital sector has remained resilient, a small slowdown was registered but the sector is still enjoying significant growth in 2023. The total market size of France’s digital market in 2023 is estimated to be 66 billion euros and is expected to reach 70.5 billion in 2024. The market is divided among the three following activities: ESN/digital services (52.4%) with revenue of 33.8 billion euros, software publishing (35.5%) with 24.5 billion, and engineering and technology consulting (12.1%) with 7.8 billion.  The global ICT sector in France represents close to 30,000 companies, including numerous highly specialized SMEs and the sector employs over 660,000 people.  For example, the strength of the French software industry is based on hundreds of highly specialized business publishers. France also has a vibrant start-up ecosystem with over 15,000 companies in various ICT subsectors, including Saas, Data Analytics, Cybersecurity, AI, etc.  

In 2023, the French digital sector experienced an industry-wide growth of 6.5%. Such growth is largely driven by investments and development in areas like the Cloud (+17.5%), Big Data (+18%) and Cybersecurity (+10.20%).  The top three sectors that invest most in IT includes automotive, aerospace, banking and services representing a share of 30.4%, 15.2% and 14.9% respectively.

Despite massive strides, future growth in the digital sector may be hampered by a talent shortage even though the French digital sector created 47,000 jobs in 2022. While this issue is not new to the sector, it has intensified greatly as companies struggle to find talent trained in the skills necessary to support the digital transformation of the French economy in 2024 and beyond.  

Still, the digital sector continues to be an area of focus for all firms across France, regardless of industry, as 51% of companies increased their IT budgets in 2023.  

Leading Sub-Sectors  

  • Cloud Computing (+ 17.5% growth in 2023)
  • Big Data (+ 18% growth in 2023)
  • IoT (+ 19% growth in 2022)
  • Cybersecurity Solutions (+ 10.2% growth in 2023)
  • Digital Transformation (+ 10.2% growth in 2022)

Although less important in revenue, two subsectors are emerging substantially with rapid growth:  

  • AI services (+22.9%)
  • Sustainable IT services (+39.3).

Major French players include Dassault Systems, Sopra Steria, Cegedim, Orange Business Services, Cap Gemini, Atos, etc.  Further illustrating the strength of the French digital industry is that French software & IT services companies represent the leading source of French originating FDI projects in the United States.


Market Challenges  

Refer to Data Privacy and Protection, Cross border data flows, and Transferring Data Outside of the European Union Chapters in CCG  

As an EU member State, France follows EU regulations, such as The General Data Protection Regulation (GDPR), which governs how personal data of individuals in the European Union may be processed, the EU-US Data Privacy framework, or NIS2.

In France, American tech companies are viewed as leaders in the computer services and software sector with key players such as Microsoft, Google, Apple, Dell, AWS, CISCO, Adobe, IBM, and Oracle having large market shares. However, the French and EU governments have implemented a variety of digital policies that have significantly affected how American companies operate in these markets. Most notably, digital policies and regulations such as the Digital Markets Act, Digital Services Act and more recently the Secnumcloud (see Digital Trade Barrier) have created a challenging environment in the French market, especially for large American platform providers.  Nevertheless, high growth in many ICT subsectors represents an opportunity for businesses investment, entry, and expansion.

Regulatory environment

i.    AI regulation

The Commission proposed an Artificial Intelligence (AI) Act in April 2021 which came into force on August 2024, with the aim of providing a risk-based approach to, regulating the development, deployment, and use of AI-driven products, services, and systems.  

https://digital-strategy.ec.europa.eu/fr/policies/ai-office

https://artificialintelligenceact.eu/

ii.    Cybersecurity  

The Security of Network & Information Systems Regulations (NIS Regulations) provide legal measures to boost the level of security (both cyber & physical resilience) of network and NIS2, also known as the Network and Information Security Directive 2, is mandatory for all EU member states since 2023, implementation in France is expected in the Fall 2024.  NIS2 aims to enhance cybersecurity measures for critical infrastructures and digital service providers and requires Member States to impose a variety of cybersecurity and incident reporting obligations.

https://digital-strategy.ec.europa.eu/en/policies/nis2-directive

iii.    EU Cloud Services Scheme (EUCS)

The EU is considering a new certification scheme applicable for cloud services.  

The EUCS is an integral part of the European Commission’s broader strategy to enable access to secure, sustainable, and interoperable cloud infrastructure and services for European businesses and public authorities. This broader strategy complements existing and upcoming EU cybersecurity laws, including NIS2.

iv.    Public sector procurement

Refer to Selling to the Government Chapter in CCG

The French Government generally follows EU procurement regulations that are adopted into French regulations: The French Government Portal for French Government tenders, “La PLACE” is the platform for the French public administrations’ procurement procedures.

Digital Trade Barriers  

Cybersecurity  

EU Cybersecurity Certification Scheme for Cloud Services (EUCS):  

The EU is considering a new certification scheme specifically for cloud services. U.S. stakeholder concerns include data localization, headquarters’ location, and corporate control requirements, all of which aim to make EU data “immune” from non-EU laws for certain high-risk tenders. Once finalized, it is expected that the EUCS be made mandatory for certain public sector and possibly select private sector cloud services. However, it is unsure when the EUCS will become operational or what the final certification requirements will entail since the text is still not finalized.  

France’s national digital security agency, Agence Nationale de la Securite des Systemes d’Information (ANSSI), maintains a security certification scheme for cloud services, commonly referred to as SecNumCloud. In May 2021, the French Government issued a strategy for the use of cloud computing by the state (Trusted Cloud strategy), requiring that government agencies and commercial entities considered “critical” must select only cloud services vendors with a SecNumCloud certification to handle their highly sensitive data.  As part of this strategy, ANSSI published in March 2022 a revision to the SecNumCloud certification requirements. This revision requires, in part, that any cloud provider that handles “highly sensitive” data must be at least 61 percent European-owned and “immune” from non-EU laws.  

There were concerns that U.S. cloud services suppliers would be precluded from providing these services to French public authorities or that these certification requirements be adopted by the private sector.  

Since then, however, US cloud services suppliers such as Microsoft, IBM and Google have partnered with major French IT players to seek SecNumCloud certification with the aim of meeting the specific cloud needs of the French State, public agencies, hospitals, regional authorities, Vital Importance Operators (OIVs) and Essential Service Operators (OSEs).  

Data Localization Requirements  

The GDPR restricts the transfer of the personal data of EU “data subjects” (any natural person whose personal data is being processed) outside of the EU, except to specific countries that the EU has determined provide adequate data protection under EU law or when other specific requirements are met, such as the use of standard contractual clauses or binding corporate rules.

 

Digital Trade Opportunities  

Analysts expect the French digital market to continue to grow consistently in the following areas: cloud consulting and systems integration; digital transformation; the collection and use of data; 5G and edge computing; cybersecurity; and especially artificial intelligence. High growth in many ICT subsectors represents an opportunity for businesses investment, entry, and expansion.  

French enterprises, particularly SMEs, need to progress in the take-up of advanced technologies, such as artificial intelligence, cloud and enhanced cybersecurity, thus generating attractive business opportunities.

In France, American tech companies are viewed as leaders in the computer services and software sector with key players such as Microsoft, Google, Apple, Dell, Adobe, IBM, or Oracle having large market shares. Smaller more specialized US suppliers are also entering or expanding locally with very sophisticated solutions, particularly in the cybersecurity space.

Specific Industry Sub-sectors

AI

France has an ambition to be the ‘A.I. hub of Europe,’ with government officials, including President Macron, promising aggressive investments into A.I. training and research. Since 2018, France has allocated over €500 million per year as part of its “National Strategy on AI” aimed at enhancing research, development, and education in France through 2026. Although French company Mistral AI, which produces open-source large language models made some press headlines, France has yet to produce any large global players in A.I.  Therefore, there is likely a significant opening for investment and development opportunities as France looks to grow domestically in this sector.  

ii.   Cybersecurity

Cybersecurity in France is a €3.8 billion market and has continued to grow by roughly 10% each year for the past several years. This growing demand arises as the French economy continues to digitize and severely damaging cyber-attacks become more and more common. For example, several hospitals were victim to a major cyber-attack which caused significant disruption to hospital operations and severe breaches in patients’ privacy. Similarly, in March of 2023, a group of hackers took down the French National Assembly’s website, demonstrating that not even the government is immune to such attacks. However, in the meantime, French companies still have a long way to go considering they have devoted only 10.7% of their respective IT budgets towards cybersecurity.  With the increase of cyber-attacks targeting all kinds of organizations of any size, the danger awareness has improved widely.  Therefore, opportunities are significant in this area, as companies increase their investment in solutions to protect themselves.

iii    Quantum

France is committed to becoming a major player in the global quantum landscape. In 2023, the quantum technologies market saw substantial growth, driven by robust advancements and strategic investments. The market, which is rapidly expanding, now boasts significant milestones, including the launch of innovative projects like Alice & Bob’s error-corrected qubit and Airbus and BMW Group’s global Quantum Mobility Quest. French companies such as CryptoNext Security and Eviden are leading in quantum cryptography and advisory services, reflecting France’s growing global influence. Major players in the French quantum tech landscape include Alice & Bob, Pasqal, Quandela, and IQM, all of which are advancing critical technologies and innovations.  

iv    5G & 6G

France made significant strides in 5G developments throughout 2023, achieving 93.2% coverage, which is close to the EU target and surpasses the EU average. The 3.4-3.8 GHz band, essential for high-bandwidth applications, now covers 64.8% of French households. Major operators such as Orange, SFR, Bouygues Telecom, and Free are at the forefront of this rollout, employing advanced technologies like Massive MIMO and network slicing to improve network performance. The French 5G market is projected to reach €15 billion by 2025, reflecting robust growth and investment. Furthermore, the French government, through the France 2030 initiative, is committed to investing up to €735 million in 5G and future network technologies by 2025, with a total leverage of €1.7 billion in investments. The strategy also includes supporting 19 5G experimentation platforms and developing campus fablabs to accelerate industrial adoption. This strategic support underscores France’s commitment to leading in next-generation network technologies and preparing for future 6G developments.

v.    IoT (Internet of Things)

France’s Internet of Things (IoT) market is projected to generate €17.32 billion in revenue by end of 2024, with a robust annual growth rate of 7.64% anticipated to drive the market to €25.03 billion by 2029. The market spans several segments including Consumer IoT, Smart Finance, Healthcare IoT, Industrial IoT, Automotive IoT, and other IoT, addressing needs from personal smart devices to complex industrial systems. Key players in this sector include Cisco, which provides IoT platforms and security solutions; Qualcomm, known for its chips and connectivity technology; Dell EMC, offering infrastructure and data management; and IBM, specializing in IoT platforms and analytics. Notable French players include Schneider Electric, focusing on energy management and automation, and Atos, which provides digital services and smart city solutions. In addition, the specific Smart Cities market in France, expected to reach €1.34 billion by 2024 and grow at an average of 9% through 2029, reflects the country’s commitment to integrating digital technology to enhance urban living. Smart cities leverage IoT to optimize and automate urban functions such as traffic management, energy use, and public safety, creating more efficient and sustainable environments. Overall, market trends reveal a rising demand for advanced connectivity solutions, smart home technologies, and industrial automation, driven by innovations in AI and data analytics.

b.    Digital Economy-related trade events    

The U.S. Commercial in France can assist in identifying the best suited trade show related to each ICT subsector and industry vertical (AI, Cybersecurity, blockchain, industrial IT solutions, e-commerce and social marketing, etc.).  

  • Big Data&AI – Paris, October 15-16, 2024  
  • All ICT sectors: Tech show – Paris, November 27-28, 2024
  • General Tech event for start-ups and scale-ups: Vivatech – Paris, June 11-14, 2025.

Resources

  • Numeum (French ICT sector trade association)  
  • EU Commsision
  • OECD.AI Policy Observatory
  • ANSSI (The National Cybersecurity Agency of France)
  • CNIL (National Data Protection Authority)
  • Xerfi, Statistica

Contact: US Embassy France – US Commercial Service Trade Specialist
Rose-marie.faria@trade.gov  +33 (0) 1 43 12 71 49