2023-10-02 14:48:18
French industry is moving up in the world competitiveness rankings. This is what emerges from an international study whose main conclusion deserves clarification: France has indirectly benefited from the crisis.
The good news comes from Boston Consulting Group (BCG), one of the world’s leading strategic studies agencies. This is a rather pleasing conclusion in this period of doubt. BCG has reconstructed and modeled the effects of the various crises that the world has experienced over the past four years: Covid pandemic, confinements, drops in growth, trade battles and the war in Ukraine. By sifting through all these indicators, the authors of the study realized that the comparative advantage was located at the level of labor costs. It is thanks to this precise point that France is one of the countries that are doing the best.
Salary increases hit competitors
The Boston Consulting Group compared all the data: salary increases but also energy costs, business productivity, etc. All criteria combined, in terms of competitiveness within Western Europe, France takes first place which was that of Germany in 2018 before the pandemic, ahead of Italy, Switzerland and Belgium. Be careful, this is only one photo at a given moment and you will have to maintain this rank.
The explanation is ultimately very simple: with the increase in its minimum wage a year ago, Germany sees its wage cost today 20% higher than ours. We are also witnessing the decline in China where labor costs have increased by 24%, the same for the United States with labor costs increasing by 21%.
Structural reforms and modernization
To deal with the crises, countries have been forced to reorganize their industrial tools and processes: working hours, adaptation of production chains, taking into account the surge in the price of raw materials, etc. The reforms undertaken before, and accentuated during, the crisis have been beneficial.
France has visibly performed better than some of its neighbors, in both the public and private sectors. It carried out structural reforms on the public power side, and modernization of factories, in four or five years, on the private sector side. SMEs/SMIs have also invested heavily in digitalization and robotics, among others.
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