The No-Risk Culture.(International Edition; FRANCE)(French attitudes toward entrepreneurship)

Byline: Tracy McNicoll

The French have long held negative beliefs about entrepreneurship. A new law aims to change that.

George W. Bush was mocked several years ago when he reportedly lamented that the French had no word for "entrepreneur." Whether he actually said it is in question, but in one sense, at least, he would have been right: polls show that the French have a deeply ambivalent, if not negative, view toward free markets, and the fact is that one of the world's largest economies has struggled to produce a culture of risk-taking, let alone any sort of iconic figure in the mold of a Steve Jobs or Richard Branson.

But there's now a bright spot: a new government measure aimed at simplifying and promoting business startups. On Jan. 1, a law took effect that allows just about anyone to become their own boss, without endless bureaucracy and fees. Retirees, students, workers, the unemployed and even bureaucrats can sign up online in 15 minutes and start building their own businesses, without losing their existing publicly funded pensions and unemployment and other benefits. And--truly an innovation here--instead of starting up with thousands of euros in lump-sum payouts for social-security contributions, the state doesn't collect until the business starts bringing in revenue. Even when it does, the "auto-entrepreneur," as the businessperson is called, reaps tax breaks.

The response to the measure has been breathtaking. The government expected that 200,000 people would sign up by the end of 2009. But by mid-February, there were already 62,000 auto-entrepreneurs on the books, suggesting that the number of startups could surpass half a million by the end of the year. Finance Minister Christine Lagarde says the figures "will explode the initial objective." Philippe Hayat, founder of 100,000 Entrepreneurs, a network of businesspeople that has been trying to change French attitudes toward entrepreneurship, calls the legislation "a revolution."

The effort is only the latest aimed at making going into business more attractive. Beginning six years ago, the French government reduced the capital requirement for starting a limited-liability company to [euro]1, and offered new funding for specific groups, like job seekers, to start their own business, all while facilitating financing and trimming taxes. The number of new firms began to grow immediately. Last year the number of new businesses hit a record 327,000--a 60 ...