French businesses facing increased risks - Gowling WLG report

03 September 2018

Research has revealed the extent of, and role of, risk within French day-to-day business activities, with almost two thirds of companies reporting experiencing an increase in risk in the last three years.

A report produced by international law firm Gowling WLG in collaboration with The Lawyer Research Service, a division of The Lawyer, explores emerging business risks in France and provides an essential snapshot of an area that can be both a threat and an opportunity.

'Risky Business: Charting the Emergence of New Risks in France' is a report based on a global survey of more than 200 business executives around the world. The survey was supplemented by in-depth phone interviews with leading business executives in France.

The report found that 65% of businesses operating in France have experienced an increase in risk since 2015, and the majority (55%) expect business risks to increase further in the next three years.

Supply chain disruption (55%) is the risk which has risen up the agenda the most for businesses, while a large number (51%) of participants state that changes to industry specific regulations have grown. General Data Protection Regulation (GDPR) and anti-corruption rules were also mentioned most frequently.

The report also revealed the emergence of disruptive technologies (46%) has significantly risen up the risk agenda and 44% say increased competition is now a more important risk.

As more macro-economic factors than ever before bring themselves to bear on French business and industry, firms are investing more in risk mitigation. Some 65% increased investment in risk management initiatives and 69% plan to invest more in the next three years –indicating that risk can drive agility and efficiency if the right parameters to address it are in place.

Protectionist measures in France are increasing according to the vast majority (84%) of survey participants, with the most obvious area where this has materialised in relation to the blocking of acquisitions of French businesses.

Jerome Patenotte, Partner at Gowling WLG in Paris, said:  "It is useful to consider the specifics of risk, where doing business in France is concerned – as with anywhere, the country boasts a unique business environment that needs to be considered in isolation.

"A central strand of this is the issue of protectionism and how this will affect the bottom line across the entire spectrum of France's commercial focus. Despite heightened global concerns about the effect of an EU/ US trade war, the results indicate a lack of concern amongst respondents, with it rated as one of the lowest concerns relating to risk, In fact, 71% disagree that Government interventions of foreign investments in French companies is a worrying business risk."

For access the full report please the International business guides topic page.

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