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When American Express Company decided to consolidate its European travel services last year, a team of AmEx executives and consultants scoured the Continent for the perfect location. They sought the right blend of cosmopolitanism, proximity to Europe’s commercial centers, and an educated labor force. The quest took them from Dublin to Prague, Barcelona to Brussels. “We must have looked at 50 sites,” says Fran�ois Gautier, the head of the European arm of AmEx’s interactive travel group. They decided on Sophia Antipolis, a sprawling, modern office park nestled in the hills above the French Riviera. The area’s physical beauty would make it easy to lure AmEx employees from colder European climes. Its proximity was ideal � close to Italy, Spain, and the Cannes film festival. And the office park was a well-established research and development destination for technology companies. While the labor and living costs in France are among Europe’s highest, the New York-based AmEx still felt that it would be easier to find fluent speakers of European languages in Sophia than in Europe’s capital cities. But what clinched it for the AmEx team was the promises it elicited from one of Sophia’s development agencies. C�te d’Azur D�veloppement (CAD) “agreed to work on getting our employees affordable housing, and to run more shuttle buses from the Nice airport up to the [Sophia Antipolis] park,” says Gautier. “It made us feel welcome and wanted, and certainly helped us make our decision.” A year later, CAD hasn’t solved the area’s housing crunch. “But they’ve done much of what we asked,” says Gautier. “We’re very happy we came here.” AmEx’s Sophia Antipolis office, which opened in October 2002 with three workers, today employs close to 200 people. In the past 18 months, Sophia Antipolis has added more than 1,300 jobs. More than 25,000 people now work in the office park, for some 1,230 companies. The job growth is impressive, given the ailing condition of the French economy. One of every ten French adults is unemployed, according to the Institut National de la Statistique et des �tudes �conomiques (INSEE), the government’s statistics office. The deficit has ballooned to an estimated 4.2 percent of France’s gross domestic product, a level well above the 3 percent allowed by the European Union. And according to INSEE, worker productivity � the standard rebuff offered by French technocrats to criticisms about the country’s high labor costs � has tumbled. Making matters worse, foreign investment has plunged. According to figures published by Invest in France Agency, part of the French Ministry of Finance, the number of jobs created in France by foreign investment has fallen close to 35 percent since 2000, and now stands at its lowest level since 1996, to around 23,000. Many experts attribute the drop to the economic torpor that’s paralyzed the United States and Western Europe since late 2000. But others blame the government’s reluctance to make France a more attractive place for foreign businesses. Critics cite two 2002 laws; one that capped the French workweek at 35 hours and another that made layoffs more expensive and burdensome. “It’s no wonder companies aren’t moving here,” says Eric Cafritz, a partner in the Paris office of New York’s Fried, Frank, Harris, Shriver & Jacobson. “Why the hell would I put myself to the trouble of being in France when I can’t restructure, when it’s going to cost me 43 percent more [per year] to run my business than it would somewhere else?”

Thriving R&D Against this dreary backdrop, Sophia Antipolis shines. Overall employment in the office park is up almost 10 percent from the end of 2000, keeping alive a streak that everyone connected to Sophia brags about: Since the early 1980s, Sophia has never experienced a net decrease in total jobs from one year to the next. So how has the office park pulled this off? For starters, Sophia’s charter mission of developing a thriving R&D center has saved it from massive layoffs: Companies in cost-cutting mode often hack away at other divisions before touching their R&D operations. But the AmEx tale illustrates another primary reason why the area has managed to keep its head above water: Sophia’s aggressive efforts to woo foreign businesses � despite hefty corporate taxes � and its attentiveness to companies once they set up shop in the office park. At the forefront of these efforts lies Sophia’s elaborate � and well funded � network of development agencies. In 2002, three separate organizations, staffed by more than 40 employees and funded by more than $10 million in revenue from corporate tax and real estate sales, worked full-time to lure businesses to Sophia. Executives at Sophia’s corporations say that the benefits of sustained development are worth the extra tax dollars. The agencies ensure that Sophia stays a vibrant technology center, one that attracts some of the best technology and engineering minds in Europe. “Growth stimulates growth,” says Jacques Gros, the director of IBM Corporation’s nearby La Gaude site, which develops circuitry for the Sony PlayStation and other products. “We all work for our own companies,” adds Gros, “but we also give back to help the area because, ultimately, it helps us.”

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