Frustrated by restrictions, many young French executives are emigrating - the so-called expatriation of competence - to further their careers, and Ireland is on their flight path. Lara Marlowe reports.
Gerald Baton and Pierre Caquet are from different social and educational backgrounds but they have one thing in common. Both are successful French businessmen who have never worked in their home country.
Mr Baton (32) has been in charge of new business and alliances at Eircom in Dublin since October 2001. Mr Caquet (34) is preparing to move back to France this autumn, after 13 years in corporate finance in London and Prague.
Expatriate French executives used to be middle-aged men persuaded by lavish perks to drag their families abroad for a few years. The term "expatriation" has gone out of fashion - replaced by "international mobility".
Most "internationally mobile" Frenchmen are now under the age of 30 and single. They organise their own move, find their own housing and, when married, rarely seek assistance for their spouses.
Although salaries are often higher abroad - and subject to lower taxes and social charges - that is not the main motivation. "For a Frenchman, going abroad is the best way to advance in a career," Mr Baton says. "In France, you must have grey hair to be given responsibility."
Mr Caquet agrees. He started a company in Prague with two partners at the age of 28. "In France, you cannot get backing from a big real estate company or bank before your mid-30s."
A study by the French Senate on "the expatriation of competence" last year found that 68,000 French people - most of them young - emigrated to England between 1997 and 2001, and 245,000 to the US. That represented a 33 per cent increase to Britain, and a 20.7 per cent increase to the US. The French "brain drain" to New York and Silicon Valley was especially high.
Mr Caquet estimates a third of his class at Hautes Études Commerciales, one of the top three French business schools, now work in New York or the City of London.
"It's not so much because of taxes, though that's a factor," he says. "It is that these places are where it happens."
Mr Baton constantly receives letters from students at his alma mater, the École de Commerce de Grenoble, seeking employment in Dublin.
Mr Baton entered business school "through the side door", by studying mathematics at the state-run University of Paris and then making a lateral move into the Grenoble business school, which has close links with Schneider Electric and Hewlett-Packard. HEC, the elite school where Mr Caquet studied, and its rivals ESSEC and ESCP, all require two years of intensive prep school. That wasn't an option for Mr Baton, who began working at the age of 16 to finance his studies.
By the time Mr Baton won one of eight posts (out of 300) reserved for candidates from mainstream universities at Grenoble business school, he had already been the head of a sales department at the Décathlon sporting goods chain for three years.
"At the interview, it wasn't my maths degree but the work experience that impressed them."
Mr Baton continued to do odd jobs, and had to borrow €15,000 to finance his studies. His first internship was on a Rossignol ski factory assembly line, putting plastic into hot ovens on the night shift with North African workers. His second was setting up stands for small businesses in trade fairs.
For his third internship, he took advantage of the twinning of Grenoble and Oxford to do comparative research on technology transfer, venture capital and business angles in France and Britain.
At HEC, Mr Caquet fulfilled his internship requirements with "industrial" experience as a guide for Hennessy Cognac, worked for the French bank CCF in Manhattan, and the MATIF French financial futures exchange.
Prep school at Louis Le Grand Lycée had been hellish, he says, with classes from 8 a.m. until 6 p.m. daily, studying through lunchtime and until after midnight.
But when Mr Caquet sat the entrance exam for HEC, he came in 35th out of 3,000. "The hardest part was over," he says. "The business school system has huge advantages over university; you're very integrated in the business world. They recruit on campus and a lot of the teachers come from big French companies. I was taught finance by Paribas bankers."
Although they have never met, both Frenchmen were able to fulfil the requirement for French military service (since abolished) as financial advisers in Britain.
Mr Baton then received permission from Grenoble to complete his degree at Aston Business School in Birmingham, where he began freelancing as an adviser to start-ups.
"I worked with technology risk capital companies that didn't get involved with the dotcoms. They knew it was just a bubble with no core technologies or competitive advantage," he says.
"Most of the start-ups I found investment for between 1993 and 1997 are still quoted on the stock exchange."
From 1998 until last year, Mr Baton worked for the German company Bauer and Partners, setting up their British operation, and developing information systems for banks in London, including Deutsche Bank, Dresdner Bank, Kleinwort Benson, JP Morgan and UBS Warburg. He was recruited by head-hunters for Eircom last year and now helps Irish companies and foreign companies in the Republic to manage their information technology infrastructure. He finds Irish business culture similar to the French, with an emphasis on human relations and the "système D" or improvisation. "Irish craíc is like French joie de vivre," he says.
Mr Caquet joined the corporate finance department of JP Morgan in London in 1992. He had taken the previous year off to travel around south-east Asia and eastern Europe.
"The Berlin Wall had just fallen. There were historic changes. I had an idea I might do something there professionally."
While working full time as an analyst in London, he took private Czech lessons for three years.
"Everything was state-owned in eastern Europe and it was all getting privatised. I wanted to be part of it."
Mr Caquet's break came when JP Morgan assigned him to the first corporate international bond issue of the former Soviet bloc, for Czech electricity company CEZ in 1994.
"My current business partner was advising the issuer, and when he saw I spoke Czech, he suggested I come and work with him."
Mr Caquet moved to Prague in 1996, and found himself one of three partners in Benson Oak, which has raised more than $5 billion (€5.1 billion) in capital, mainly for big Czech and Slovak companies as they made the transition to capitalism.
One of Mr Caquet's most satisfying deals was a major international syndicated loan, which coincided with the Russian financial crisis in August 1998.
"The financial press talked about our 'questionable sense of timing'," he recalls. "We structured the deal in a way that took advantage of specific market conditions. We went to see nearly 30 banks, one by one, and at the end of the day it was oversubscribed. We brought in 280 million deutschmarks [€143 million\], and we were only looking for DM250 million. The same publication that made fun of us, Euroweek in London, awarded us its 'Emerging Markets Syndicated Loan of the Year' award for 1998."
Mr Caquet will return to Paris this autumn with his Ukrainian bride Irèna. "I want to be closer to my parents, and we want to raise children. It's good not to be totally cut off from your roots, and it's a lot easier to start fresh at 35 than at 40."
He's not sure whether he will work in international development for a French bank, private equity or venture capital, but there is no question of settling into a purely Franco-French operation.
Ernst & Young's annual study on The Attractiveness of France, published in June 2002, found that "France's international attractiveness is below its economic weight, with a ratio of French-based companies to GDP three times inferior to Ireland's". Forty-three per cent of US businesses in France - the biggest foreign investors - planned to move some or all of their activities elsewhere.
A centre-right government has since come to power, promising to reform the French economy radically.
"It very much remains to be seen," Mr Caquet says. "[Prime Minister\] Raffarin is talking about changing the 35-hour week regime - that will have an impact."
President Chirac promises to reduce income tax by 30 per cent over five years. "It's not so much the income tax as the social charges (65 per cent over and above salary) that kill you," Mr Caquet says.
"For the income tax, you've got to bite the bullet. It's a discouragement, but I've made the choice to come back."
Like the eastern Europeans a decade ago, the French government is planning a privatisation binge. Mr Caquet's experience might prove useful.
