Report on the deeptech ecosystem in France: leads for a new strategy

Since 2019, the French government has made breakthrough innovation into one of its priorities. With its Deeptech plans, then the France 2030 overall plan and the industrial start-ups plan, France has released good results, notably in fundraising, the report says. However, “though this is something we should commend, we shouldn’t stop here: we need to go further and change the scale”, declared the ministers who received the report.

The report thus starts by highlighting the positive results of the various government’s structuration plans and the development of the deeptech ecosystem.

The level of fundraising for the deeptech segment has increased threefold over five years (from 1.5bn€ in 2019 to 4.1bn€ in 2023), “which placed France first in the European Union and fourth worldwide”, behind the United States, China, and the United Kingdom. This position ensured France “noteworthy successes in several strategic sectors”, such as artificial intelligence, quantum, DNA storage, biotech and new space.

Deeptech businesses generated “significant value creation, both in economic and social terms”, leading to developments in all key sectors, such as food, health, energy and mobility. They are thus “key to the competitiveness and sovereignty of France and Europe”, the report states.

But beyond these successes, which are “inseparable from the public support seen for breakthrough innovation”, authors of the report say that “in terms of fundraising, industrialisation and internationalisation, scaling up” is now a major challenge for French deeptech businesses. The report highlights “a distancing risk of the French ecosystem of deeptech businesses at international scale, due to the lack of research aimed enough on future strategic priorities and a funding capacity which would help support their stepping up”.

French deeptech is thus placed “at the crossroads to keep and strengthen its competitiveness and appeal”. The report offers possible ways to face the challenge of scaling up, such as:

• increasing value generation of French scientific research, by accelerating the “lab to factory” step, to turn breakthrough innovation into “a true engine of competitiveness and industrial sovereignty”. Writers of the report declare that the French scientific technologic potential has to be tapped better. To achieve this goal, “it is critical to create a great continuous listing of high-potential technologies in the research ecosystem and the industrial industry”;
• another funding need reaching 30 billion euros until 2030 for deeptech businesses to support start-ups throughout their development cycle and allow to “create world-class technologic champions”. France and Europe, say the report authors, “must obtain support capacities with private and public funding mechanisms for start-ups, able to compete with their main international rivals”.
• the economic transition of deeptech start-ups into “competitive industrial businesses” by improving the “implementation of their innovations on the market”. Indeed, the report recommends “more and systematic use of extra-financial instruments, i.e. public and private order, guarantees and regulation levers to boost the standardisation of deeptech companies in the economic environment”. And the report adds that “the regulation framework should not overlap the development of deeptech businesses, and specifically regarding their foreign competitors”. So, support to deeptech start-ups “wanting to offer experimentations or legal exemptions must be improved”.

It is on the basis of these conclusions and leads that an “interministerial reflection”, involving all the private players in the deeptech ecosystem, is due to produce a new strategy for French deeptech by the summer.

Read the press release from the French Ministry of Economy.