Start-ups and SMEs are regularly presented as drivers of growth, innovation and employment. However, despite a decade of support policies and a now mature entrepreneurial ecosystem, their growth momentum seems to be slowing down in France and Europe. This observation calls for a rethink of the levers of public action and the financing models designed for them.
A French and European Entrepreneurial Paradox
Never before have start-ups and SMEs benefited from such a dense environment of support mechanisms, financing and infrastructure. Incubators, investment funds, national and European public aid, innovation programmes, etc. The entrepreneurial ecosystem has expanded considerably over the last fifteen years.
This dynamism has produced visible results. Business creation has grown significantly, France has established itself as one of the most attractive ecosystems in the eurozone, and Europe now has several hundred companies valued at over a billion dollars. However, behind these successes, a more worrying phenomenon is emerging. The growth of start-ups and SMEs is slowing down, and their ability to scale up remains limited.
This paradox is at the heart of current debates. How can we explain that companies recognised for their innovative potential still struggle to translate this into sustainable growth and international competitiveness?
The Real Obstacle: Less Innovation than Access to Markets and Financing
For a long time, attention was focused on supply: stimulating innovation, encouraging business creation, and increasing start-up support mechanisms. Today, the main obstacle has shifted. Start-ups and SMEs are not lacking ideas or projects, but are finding it increasingly difficult to access markets, secure outlets and finance their long-term development.
Access to financing remains a key issue, particularly for young or small businesses. Despite the increase in fundraising and investment, many SMEs continue to face cash flow constraints and restrictive credit conditions. These tensions limit their ability to invest, recruit and innovate.
At the same time, access to the market appears to be an often underestimated bottleneck. Without customers, even the most innovative companies cannot grow sustainably. However, for many start-ups and SMEs, breaking into their first major markets remains a major challenge.
Rethinking Public Action: From Supply-Side to Demand-Side Thinking
In light of these findings, a shift in public policy is needed. Supporting business creation is no longer enough; it is now necessary to support their development, their access to markets and their ability to invest in the long term.
In this regard, two levers appear to be particularly important. The first is public procurement. By facilitating access to public procurement for start-ups and SMEs, the State and local authorities can play a decisive role in securing outlets, ramping up activity and scaling up. Used as a strategic tool, public procurement can become a powerful driver of growth.
The second lever is guaranteed loans. By sharing the risk with financial institutions, these mechanisms help to ease the financing constraints on SMEs and support productive investment. Far from being mere cyclical tools, they can have a lasting impact on growth, employment and business resilience.
A Strategic Challenge for Future Competitiveness
Beyond technical debates, the issue of start-up and SME growth is fundamentally strategic. It determines France and Europe’s ability to innovate, create jobs and preserve their economic autonomy in an international context marked by increased tensions.
Rethinking the levers of business support therefore means questioning the growth model we wish to promote. Public procurement, guaranteed loans and greater transparency in the entrepreneurial ecosystem are all ways of responding to this challenge.
