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Cross-border
economic
development 57
Cross-cutting themes in cross-border economic development
It is therefore important to bear in mind that competitiveness and
attractiveness are relative and changing concepts which must be
gauged against the overall territorial, demographic, administrative,
tax and regulatory characteristics of the cross-border territory.
This is therefore a very complex task. And all the more so because
to speak of competitiveness is to speak of attractiveness, a concept
that combines “objective economic indicators and foreign investors’
perceptions of the competitiveness of the economy”.96 This is to be
considered when we analyse French border areas. It would be misguided
to take a purely economic view that disregards geographical proximity
and historical, cultural and linguistic factors.
Ì Ì German firms have a strong presence in East-Moselle and Alsace,
as do Belgian companies in Nord-Pas de Calais.
Ì Ì The establishment of companies from neighbouring countries
in the French border territories is however not very visible in the
regions bordering of Spain and Italy.
Proximity is therefore not a decisive factor and the border effect continues
to be a barrier for SMEs, despite existing or potential opportunities
(suppliers, sub-contractors, customers, etc.) and complementarities.
Is it therefore necessary to put in place “free zone” or experimental
systems at the borders in order to harmonise framework conditions
within a limited area and promote balanced development for cross-
border territories? There is no consensus on this question. In 2010,
the Blanc Keller Sanchez Schmid97 taskforce recommended setting up
economic areas with specific status. However, it would be difficult to
implement such systems due both to the principle of territorial equality
and the strict supervision by the European Commission (regional aid
schemes areas).
One solution would however be to consider the differences on either
side of the border as inducements for movement and flows between
these territories, opportunities for exchange between local firms and
guarantees of the cross-border territory’s attractiveness for foreign
capital flows, which may enjoy the advantages available on both
sides.
Ì Ì In its “Alsace 2030” strategy, Alsace thus imagines the possibility
of experimenting with an “area of regulatory convergence” to
promote the integration of the Upper Rhine region by reducing
regulatory barriers.
Ì Ì This proposal ties in with the idea of integrated cross-border
economic areas: businesses that set up in these areas (and the
workers that choose them) may choose between the law of either
side of the border.
96 AFII, DG Trésor and CGET, Tableau de bord de l’attractivité de la France, 2014 Edition, p.7
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In a nutshell…
France’s cross-border territories are clearly less competitive
than their neighbours, mainly on the northern and eastern
borders of France (from Dunkirk to Geneva). This is reflected
in per capita GDP, the unemployment rate and the ability to
attract foreign direct investment (FDI). Besides differences in
tax and social legislation (cost of labour), businesses mainly
highlight the instability of regulations in these areas. The lack
of competitiveness is however mitigated by mechanisms that
benefit the French territories, including the research tax credit
and the Young Innovative Enterprise status. In addition, while the
ongoing reforms do contribute to regulatory instability, they are
nonetheless a step toward simplification. Lastly, in cross-border
areas, it is extremely difficult to assess the real competitiveness
of French territories as compared to their neighbours, as this
competitiveness should be weighed against neighbouring
territories’ framework conditions, the business sector (level of
regulation, competition, globalisation, etc.) and the firm’s own
development strategy.