adaptability of the French armaments industry in an era of globalization, The

Industry and Innovation, Aug 2001 by Serfati, Claude

At the closing of the 1990s, the 100 top industrial groups accounted for over 50 percent of France's exhorts.

Likewise, the governmental technological programs based on the support of national champions fell short of favoring inter-industry flows of technology. Hence, traditional features of the French industry's international specialization have persisted. A long-term perspective analysis (1967-94) (Lafay et al. 1999) shows that while aeronautics was the sector gaining the most in competitiveness (as measured by changes in its world market share), serious weakness persisted, and sometimes aggravated, in some critical industries (machine-tools, computer) (Lafay et al. 1999).

Another reason to make argument with Giraud's and CGP's claims cited, is related to technological performances proper, as they can be measured by patent deposit.8 In a study based on the patent deposit base of the Office of Science and Technology (OST) (Serfati, with Laville 2000), we found that in the 1991-96 period, the share of Defense Prime Contractor Groups (DPCGs) in France's technological activities, as measured by patenting, is much more important than that of German and British contractor groups in their home country (Table I column 3). A major factor for that could be (a) that public R&D benefit to industry is higher in France than in Germany and the UK, (b) that public R&D is more concentrated on a few DPCGs than in Germany and the UK. These data can be seen as confirming that technological performances rest more upon DPCGs in France than in other European countries also endowed with a strong industrial and technological defense base.

The overrepresentation, compared to what happens in Germany and the UK, of French contractors in national technological performance, fell short of producing interindustry flows of technology. Drawing upon the methodology developed by the Observatoire des strategies technologiques (OST) [Observatory of Technological Strategies] with Maastricht University which distribute patents across technological domains (TD 6) or sub-domains (TD 30), we found that over the 1991-96 period, French DPCGs have accounted for 25 percent or more of total domestic patenting in five technological sub-domains (TD 30) (Table 2). This is telling on the contribution of DPCGs to the generation of technological capabilities. Still, their specialization fell short of reinforcing French technological competitiveness. Over the 1991-96 period, in only one of the five technological sub-domains (space-armament) in which DPCGs are strong, France had a "revealed technological advantage".9 As France's technological performance, measured by patent deposits, has significantly declined throughout the 1990-97 period, the fall was all the more marked in technological domains on which DPCGs are active (OST 2000).

INDUSTRIAL CONSOLIDATION AND CORPORATE GOVERNANCE REFORMS

As the FMSA has been for decades a key component not only in the French economy but also in the French society, it had to face with dramatic changes in the 1990s economic and geopolitical setting. The new setting which includes domestic budgetary constraints, the globalization of economy, the absolute superiority enjoyed by the US defense industry, and the new geopolitical situation created by the collapse of USSR, forced the FMSA to undergo a sweeping process of consolidation along with reforms in corporate governance. The current restructuring process can be interpreted as an attempt to preserve the strength and cohesion of the FMSA.