The next Silicon Valleys? How French, UK govts stimulate the startup scene

Governments are often seen as a nuisance in business, but this is a jaded view. Responsible and engaged governments are able to do amazing things for a country’s startup scene. Most countries outside the US want to mirror the success of Silicon Valley, the undisputed king of tech innovation.

Nicolas Princen is French President Nicolas Sarkozy’s “digital man”. He has spoken about the ways the French government is stimulating its local startup scene and “helping startups grow”. The internet economy contributes about 6% to French GDP, he estimates, but affects and enhances more than 80% of the economy.

1. Tax cuts for startups: No taxes are paid for the first four years of a startup’s life.
2. The government has created specific tax cuts for innovation and R&D.
3. Launched an open data platform: www.data.gouv.fr

In the UK, the government has invested 9-billion pounds into TechCity, a tech hub for startups. Eric Van Der Kleij who heads it up, says the point of TechCity is to “amplify existing cluster of tech and businesses” and it “boasts extraordinary infrastructure and broadband”. The other things the UK government is doing to boost entrepreneurship is:

1. Created an “Entrepreneurs Visa” — an entrepreneur can move to the UK with just 50 000 pounds of investment from an accredited VC or incubation accelerator
2. The first 10-million pounds of capital gains from a startup gets a tax rebate
3. There are tax credits for R&D for startups
4. On the investor side, UK tax payers who put money into early stage companies get tax breaks