France gets a start on building its own 'Silicon Valley'

Two years ago Martine Courault lost her job in a small textile mill near Epinal in France's Vosges mountains. The owner of the plant had decided to close because of the crisis devastating the French and European textile industry. Overnight the small village where Martine and many of her fellow workers lived became a ghost town.

Today, Martime traces microcircuity onto copper photographic plates at a brand-new microchip plant -- CIMULEC -- just outside Metz.

Four hundred miles to the west, in the small farming village of chateubourg near the Breton capital of Rennes, Francoise Gouin checks hybrid microcircuits (destined for France's nuclear program) at SOREP, a two-year-old plant owned by former graduates of the Rennes Institute for Telecommunications.

If SOREP had not come to Chateaubourg, Francoise would have faced the choice of leaving Brittany for Paris and probable employment, staying to help out on the family poultry farm, or marrying early.

Small high-technology firms like SOREP and CIMULEC have suddenly mushroomed all over Britany and Lorraine in the past two years, breathing new life into traditionally poor regions and urged on by French government and regional authorities as part of a concerted effort to make France a world leader in microelectronics.

For centuries the young leff Brittany to seek fame and fortune im Paris or overseas. Those who remained behind eked out a living on the land or at sea.

Now all that is changing. Young engineers, who left to be trained in paris, are flocking back to Brittany as it tries to become a French equivalent to California's "Silicon Valley" or Boston's Route 128.

Starting from almost nothing, the electronics and computer industries in Brittany and Lorraine now employ well over 100,000 in scores of small plants and research institutes scattered throughout the steel valleys of the Meuse and Moselle, the deserted textile villages of the Vosges of the picturesque Breton countryside between Nantes and Rennes.

Both regions are hoping to emulate New England.

Both Brittany and Lorraine possess similar characteristics, such as a ready pool of well-trained manpower from the many research institutes and engineering schools that were moved out of Paris by the government during the past 15 years.

There si one major difference. The drive behind this quiet revolution has come not from the private sector but from the French government, acting as entrepreneur and veture capitalist combined.

To be more specific, it has come from just 60 civil servants tucked away in cramped, 19th-century offices in the shadow of the Eiffel Tower.

Two small agencies -- DATAR (Industrial Development Agency) and CODIS (Committee for Tomorrow's Growth Industries) -- are behind the attempt to counter American and Japanese dominance of the microelectronics industry. Their weapons are a tempting mix of generous cash grants ($5,000 per job created), long-term soft loans, tax exemptions, arm twisting to convince firms to set up in Brittany or Lorraine rather than in or around Paris.

The strategy seems to be working. In late 1979 DATAR arranged a marriage between French missile contractor Engins Matra, which had cash to spare, and the Harris Corturer of integrated circuits, which had the technology but no money to invest in a European plant.

The French government offered the new company, Matra-Harris, $50 million in soft loans, repayble when the company began to make a profit.The plant opened last September with a team of design engineers lured from all over europe. The first wholly new product will be out by the end of this year.

In March, Matra announced a second joint company in the Nantes area, this time with California's Intel Corporation, the world leader in integrated circuitry. As with Matra-Harris, the French are not simply manufacturing under license; the aim is to produce new products for the world market, harnessing French research and money to America's technological lead.

In northern Brittany, 250,000 residents at the Ile-de-Vilaine Department are learning to use an all-electronic phone book, scheduled to replace printed phone books throughout France by 1990. Developed in Rennes by the National Research Center for Telephones and Telecommunications (CCETT), the electronic phone book consists of a small terminal and screen, which between them can supply any phone number in France.

The labor force in all these factories and research institutes is as young as the technology. At SOREP, which employs 110 engineers, the average age is just 25 years old; at CIMULEC, 28. Much of the printed circuit assembly work requiring manual dexterity is done by women.

There are two dangers that many prevent either Brittany or Lorraine from emerging as France's "Silicon Valley."

Only a handful of civil servants at DATAR and CODIS are trying to second-guess possible winners in a technology that is changing at breakneck speed. Sooner or later they may back a loser or fail to spot a winner, possibly with disastrous results. The private in ventor has nowhere to turn but to the government. French banks won't back a project without the state's seal of approval.

A more immediate worry is the effect the Socialists' nationalization plans may have on potential joint ventures between French and US companies. Matra itself is on the list of 11 industrial grou ps due to be nationalized.