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Go West, Young Frenchman


International Business: FRANCE

GO WEST, YOUNG FRENCHMAN

A torrent of high-tech talent is leaving--maybe for good

When Eric Di Benedetto got his degree from the Essec Graduate School of Management in Paris, he was one of a handful who headed straight for Silicon Valley. That was 1989, and Di Benedetto knew that in France, 15 years might pass before he could assume any serious responsibilities. In California's high-tech mecca, by contrast, his career took off. Last year, the 32-year-old expat launched his own venture firm, Convergence Partners, with two U.S. colleagues--and had a $60 million fund the day it was born.

From Paris to Aix-en-Provence, the word is out: Silicon Valley holds all the promise the French economy lacks. And what began as a trickle of entrepreneurs and high-tech talent is becoming a torrent. For the new expats, the trip westward brings not only well-paid jobs but the chance to ride a high-tech revolution into the next century. For France, though, the trend is ominous. "The whole environment in France is tragic," says Alex Balkanski, a French transplant whose C-Cube Microsystems Inc., founded in Silicon Valley a decade ago, is now a $340 million company. The tech gap between the U.S. and France, he says, "is not closing, it's getting wider."

As recently as five years ago, few French graduates would have gone abroad. But now, up to 25% of France's elite graduates are leaving, placement executives say. And a recent poll shows 77% of French youth would take a job overseas if it meant a promotion. Small wonder: Di Benedetto says a typical French business grad earns half the salary of a new MBA in the U.S.

STARTUP HEAVEN. A brain drain of this magnitude is a serious blow for France. It is already struggling with 24% unemployment among those under 26, a business culture hostile to entrepreneurs, and an underdeveloped high-tech sector. Yet these are the very problems driving engineers, programmers, and MBAs to vote with their feet. In effect, France is hemorrhaging its lifeblood--the people it needs to create new jobs and industries.

Many exiles head to Silicon Valley, where some transplants are noted executives: 3Com chief Eric Benhamou, for instance, and Borland founder Philippe Kahn. The number of citizens registered with France's consulate in San Francisco quadrupled, to 40,000, between 1991 and 1996. Many more may be unregistered, French techies say.

Some of the high-tech startups that have sprouted in France are also shifting offices and operations to Silicon Valley or cities such as Boston. Aplio Inc. was founded in France 15 months ago but is building up its activities in the U.S. from a San Bruno (Calif.) headquarters. "I can build a company in one to two days in the U.S.," says CEO Olivier Zitoun, a 30-year old expatriate.

Last year, after Zitoun helped launch a device allowing telephones to send calls via the Internet, Aplio was featured in a spot on national television. It was just the kind of fame Zitoun needed to be reminded that he wasn't in France, where small companies are viewed as unreliable. "Most people here didn't even know we were a startup--or French," says Zitoun.

To be sure, the French exodus in part reflects a desire among young managers to gain international experience--and eventually take it home. On that assumption, government officials applaud the trend. Instead of worrying, complacent ministers say the diaspora will create a savvy generation of French executives. But educators, economists, and entrepreneurs warn that of those fleeing, many won't return to France.

Count venture capitalist Di Benedetto among them. "The French model is not working," he says flatly. Such a rebuke is easily dismissed in Paris. The French government would do better to find ways to keep its bright people at home if it wants a dynamic economy.By Gail Edmondson in Paris


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