France tries rejuvenating high-tech manufacturing with Internet of Things center
Investors hope the Cité de l'Objet Connecté in France will become a hub for designing and building new networked devices. French government agencies are chipping in some initial funding.
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California's Silicon Valley enjoys a reputation as the world's center for tech innovation. For manufacturing, it's Shenzhen, China. But if some private investors and the French government get their way, a quiet city in western France will claim some influence in both those domains.
On Friday, France's president, François Hollande, will inaugurate a new center in Angers called the Cité de l'Objet Connecté devoted to creating, commercializing and building devices for the up-and-coming industry called the Internet of Things.
"Some people think if you have a good idea in the morning, you have a connected device company in the afternoon. We know life is a little more difficult than that," said Eric Carreel, a French entrepreneur who helped initiate the project and invested in it, and who helps oversee it as honorary president.
The effort reflects a shift in thinking about manufacturing. For decades, western countries have seen manufacturing work move to Asia, followed by engineering, design and research, too. For example, the US lost 2.4 million manufacturing jobs to China between 2001 and 2013, according to the Economic Policy Institute. Now there's an effort to reverse that trend so that jobs, expertise and economic influence don't head overseas.
A promising opportunity for that redirection lies in the Internet of Things, a catchall term that encompasses technologies for connecting smartwatches, gas meters, baby monitors and countless other disparate devices to the Internet. It's a big and growing market, with projected global spending on the Internet of Things growing 17 percent per year from $656 billion in 2014 to $1.7 trillion in 2020, according to analyst firm International Data Corporation.
New jobs in Angers
With that growth, it makes sense that Angers is focusing on the connected devices to replenish its manufacturing industry. Mayor Christophe Béchu looks on the bright side, arguing that the manufacturing shift to Asia opened the door for a new approach.
"The departure of some enterprises in the 1990s finally allowed the development of a renewed digital sector," one that's more focused on specialized products rather than mass production, and one that's based on local expertise and business networks, Béchu said.
"We are perfectly able to take up the challenge laid down by Asia, if we have the chance and means," Béchu said. "The Cité de l'Objet Connecté appears to be this chance and means."
The center is designed to cultivate new business ideas, weed out the duds, and help the good ones to flourish. An initial staff of about 40 people will help startups and established companies who pay to use the center, for example, by building prototypes using its fabrication facilities.
If successful over the next three years, it'll have 170 companies using it annually and will have created 400 or 500 new jobs, Carreel said. Over that period of time, governmental subsidies and loans that initially provide half the center's budget will wind down to zero, and the Cité de l'Objet Connecté will have to stand on its own as a private business.
Help from government funding
"In France we do not have the same type of big investors and venture capitalists that you have in the US," Carreel said. "We have to say today the government is playing part of this role of the VC."
A few hundred employees is far cry from being the next Silicon Valley or Shenzen, but success could help the region's electronics design and manufacturing business. The plan for the center is to house some manufacturing operations on site and to hand some off to nearby factories.
The Angers area already is home to Éolane, a 3,500-employee company that helps others design and build electronics products, and one that's another investor in the connected devices center. Smaller electronics design and manufacturing competitors in the area include Asteel, All Circuits and Lacroix, and the Loire Valley where Angers is located has 26,000 jobs in digital technology, Béchu said.
Carreel himself has experience in the market. Among the companies he's founded are Withings, which sells networked smartwatches, bathroom scales, fitness trackers, security cameras and blood-pressure monitors; Invoxia, which aims to help office phones become a useful accessory to employees' smartphones; and Sculpteo, which customers can pay for 3D printing jobs.
Carreel had contacts from his years in the industry that let him tap into the Chinese manufacturing industry. But for those without those contacts, manufacturing is difficult. And keeping manufacturing local speeds up design work, too, since designers and engineers can work closely with those who'll actually build a product, he said.
"Sometimes it's very difficult to push new [technology] integration. When Withings wanted to integrate a carbon dioxide sensor into our scale, it was a huge job to do it in China," Carreel said. "We would have loved to have been able to do it close to us. The way you go to market must be very quick."