STEVE INSKEEP, HOST:
French President Francois Hollande arrives in the United States today. During a three-day visit, he will travel to Silicon Valley, the first French leader to do that in 30 years. The French president has been seen as anti-business, but he's trying to send a positive signal to French entrepreneurs with his visit to the world's high tech capital. NPR's Eleanor Beardsley reports on what's behind Hollande's turnabout.
ELEANOR BEARDSLEY, BYLINE: The word entrepreneur may be French, but France isn't exactly the country that comes to mind as the best place to start a business. That could be changing.
ADRIEN SCHMIDT: Okay. So look at this place. I mean it has literally not changed at all for like a century.
BEARDSLEY: That's successful French entrepreneur Adrien Schmidt standing in a covered market in the middle of Paris's traditional garment district known as Santee. Workers clatter past wheeling boxes of clothing, but wholesalers are slowly moving out in search of cheaper rents. Schmidt says the plan is for technology start-ups to move in.
SCHMIDT: Our goal is actually to have 20,000 square meters dedicated to start-ups with special rents, with places they can actually live and, you know, stay, have areas where you could bring your kids, make it, you know, an enterprise area for tech companies in Paris.
BEARDSLEY: The transition of Santee into what is becoming known as Silicon Santee is well underway, supported by the city of Paris and private business. In this six storey building, startup teams brainstorm on every floor. While France had many successful Fortune 500 companies, it's always been more difficult for small companies, says entrepreneur Olivier Meugenot.
OLIVIER MEUGENOT: It's a whole system that makes it harder for small businesses to hire. The rules about laying people off make hiring someone a huge decision. It could put your business at risk anytime.
BEARDSLEY: Hollande now seems determined to change that.
PRESIDENT FRANCOIS HOLLANDE: (Speaking French)
BEARDSLEY: In a major policy speech in January, the socialist president took a definite turn to the right. Hollande said his government would cut taxes, streamline labor laws and do anything it took to help French companies flourish. The left wing of Hollande's party has accused him of cozying up to fat cat bosses, but entrepreneurs Meugenot and Schmidt say his speech and his Silicon Valley visit are hopeful signs.
SCHMIDT: Let's say he started off on the wrong foot, you know, with his 75 percent tax rate and he got all the entrepreneurs, you know, frustrated about that and angry and some of them left and everything. There's definitely been a shift in his politics around that.
BEARDSLEY: Hollande has staked his presidency on bringing down French unemployment and reducing the country's deficit. But until now the government's actions only seem to have worsened things.
GUILLAUME LAUTOUR: They kind of understand now that taxes, like, probably destroying value more than creating value when you use it too much.
BEARDSLEY: That's venture capitalist Guillaume Lautour, who invests in startups on both sides of the Atlantic. Lautour says France actually has a very dynamic digital startup culture, which accounts for around 30 percent of French growth, and, he says, French entrepreneurs are all throughout Silicon Valley.
LAUTOUR: Bringing a politician to Silicon Valley so that he understands that it is a kind of win-win situation if you connect European technology to Silicon Valley; it's very profitable for France and for the U.S. as well.
BEARDSLEY: Analysts say Hollande fears massive street protests if he dares to cut social spending programs. So the socialist president's banking on French entrepreneurs and their startups to help him boost the economy and put a dent in the jobless rate. Eleanor Beardsley, NPR News, Paris. Transcript provided by NPR, Copyright NPR.
