France and Ireland

Thomas Friedman heads to Ireland and finds that the country is doing quite nicely:

"We set up in Ireland in 1990," Michael Dell, founder of Dell Computer, explained to me via e-mail. "What attracted us? [A] well-educated work force - and good universities close by. [Also,] Ireland has an industrial and tax policy which is consistently very supportive of businesses, independent of which political party is in power. I believe this is because there are enough people who remember the very bad times to de-politicize economic development. [Ireland also has] very good transportation and logistics and a good location - easy to move products to major markets in Europe quickly."

:

...Intel opened its first chip factory in Ireland in 1993. James Jarrett, an Intel vice president, said Intel was attracted by Ireland's large pool of young educated men and women, low corporate taxes and other incentives that saved Intel roughly a billion dollars over 10 years. National health care didn't hurt, either. "We have 4,700 employees there now in four factories, and we are even doing some high-end chip designing in Shannon with Irish engineers," he said.

Steven Pearlstein of the Washington Post, meanwhile, travels to France and -- surprise -- discovers things are a mess:

The culture of thinking in terms of big companies is finally changing, but only very slowly," said Bruno Rousset, who heads a thriving insurance group in nearby Lyon and runs a small venture capital fund on the side. "In terms of entrepreneurship, I would say a generation will have to pass. It is not obvious to a French person to take such risks in life."

It's also not easy. Francois Turcas, president of the small-business association in Lyon, points out that the first step in starting a business in France is to pay a tax, even before you have your first customer. And the fact that unfriendly labor laws kick in when a firm has more than nine employees, he said, creates a real disincentive for growth.

It is also hard to imagine that French workers would be lured to small high-tech firms by the prospect of receiving stock-option grants. One business owner in Lyon told me how he tried to introduce profit-sharing to his French workers. During the first couple of years, the company met its targets and set aside 10 percent of the profits for its employees. But when he announced in the third year that there would be no profit-sharing because the company fell short of his targets, workers struck and the program was eventually abandoned. Imagine how they'd feel about stock options.