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French Government Trying to See Europe's Largest Chip Maker Through

Posted By Administration, Friday, June 20, 2014
Originally posted on 7/23/2013

The New York Times reported yesterday that STMicroelectronics, the largest chip maker in Europe, is getting help from the French government for development of its new smartphone, TV set-top box, and home router microprocessors.

In our forthcoming Q3 2013 issue of Strategic Alliance Magazine we unveil the second installment of our series on public-private partnerships that examines alliances aimed at sustainability. Both of the pieces in this series have focused on the humanitarian angles of these alliances. However, yesterday's Times article reminded us that you have to sometimes drill a level or two deeper to find the civic value of these partnerships.

France and several other municipal governments are going to put 600 million euros towards STMicroelectronics' new chip project, all on behalf of an $8.5 billion multinational company. Of course, the article notes that "STMicro employs 48,000 people, almost half of them in France and Italy."

Job creation may just be a secondary motivation. Governments's role in business may evolve in the years to come to be more entrepreneurial than just providing tax incentives to large companies; investments like this one may increase as the right bet could help a government at any level reduce deficits and balance budgets.

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