The French Economy Introduced
The economy of France is in the middle of going through a very dramatic change. In the past the French economy was a mixture of private ownership and government ownership. The government is currently selling off its stake in most industries to make the economy more of a capitalist one. This has created some turmoil in the economy but it does still remain one of the strongest in Europe. The government may no longer be interested in owning companies but they are still heavily involved in the economy. They do this primarily through regulation and taxation. The goal is to make the distribution of income as even as possible. A lot of people think this is a bad idea as it will discourage people from starting companies. Nevertheless is does seem to be working well for France since they have weathered the recent financial crisis better than any country in Europe.
As one of the largest economies in the world France is a major player in the European Union, really they were the driving force behind it. The French economy is very diversified with almost all industries represented. They are a post industrial country but they do still have a fairly large manufacturing sector. Like all post industrial economies they biggest driver of their economy is the service sector. There are a number of large corporations based in France; this is part of the legacy of government ownership. There is very little small business; it is mostly very large companies. This gives them an advantage when it comes to exporting their products.
One area where the French really do well is in the high tech sector, they have a massive aerospace industry for example. The French are very good at developing new technology and getting to market. This is a big part of what has kept the manufacturing sector so strong. They can do this because they have a highly educated work force, especially when it comes to science and engineering. They are also very good when it comes to protecting the environment; they have the lowest emissions of any country in the G8.
There are some issues that are going to cause the French economy some problems in the future. The biggest of these is probably the high taxes. With the switch to private ownership there is a need to find people willing to invest in these businesses. This is going to be a challenge with the high rate of taxes that are being charged. Another issue is that the strong unions have gotten some very strict labor laws passed over the years. The increased cost that this imposes on French companies will make it hard for them to compete in the global economy. Certainly none of these problems are insurmountable but they are going to need to be addressed. Otherwise the future of the French economy looks very bright.