Economy of Paris

Paris and the surrounding Ile-de-France region form one of the engines of the global economy with the 2003 GDP calculated by INSEE at €448,933 billion [8], or US$506.7 billion (at real exchange rates, not at PPP). In 2003, the Ile-de-France would have ranked as the fifteenth largest economy in the world, with a higher GDP than either Russia or Brazil.

The Ile-de-France accounts for about 29% of the total GDP of metropolitan France, although its population is only 18.7% of the total population of metropolitan France (as of 2004). In 2002, according to Eurostat, the Ile-de-France GDP accounted for 4.5% of the total GDP of the European Union (of 25 members), although its population is only 2.45% of the total population of the European Union.

The economic centre of the metropolitan area is located in the western half of the city proper and the central portion of the Hauts-de-Seine departement, forming a triangle between the Opera Garnier, La Defense and the Val de Seine. As a consequence some workers commute from the suburbs to work in the city, and others commute from the city to work in the suburbs. At the 1999 census 47.5% of the 5,089,170 people in employment in the metropolitan area worked in the city of Paris and the Hauts-de-Seine departement (only 31.5% worked exclusively in the city proper).

The Paris economy is largely a service economy but although the Ile-de-France’s manufacturing base is in a period of decline, it is still an important manufacturing powerhouse of Europe. The economy of Paris and neighbouring departements have moved towards high value-added services, in particular business services.

The 1999 census indicates that of the 5,089,170 persons employed in the Paris metropolitan area, 16.5% worked in business services, 13.0% in commerce (retail and wholesale trade), 12.3% in manufacturing, 10.0% in public administrations and defense, 8.7% in health services, 8.2% in transportation and communications, 6.6% in education, and the remaining 24.7% in many other economic sectors. Among the manufacturing sector, the largest employers were the electronic and electrical industry (17.9% of the total manufacturing workforce in 1999) and the publishing and printing industry (14.0% of the total manufacturing workforce), with the remaining 68.1% of the manufacturing workforce distributed among many other industries. The tourism industry and tourist related services, employ 4.7% of the total workforce of Ile-de-France (in 1999), and 7% of the total workforce of the city of Paris proper

Spatial organization of the Paris economy

The city of Paris is not properly speaking the economic centre of the metropolitan area as most of the offices are located in the western half of the city of Paris proper and the central portion of the Hauts-de-Seine departement, forming a triangle between the Opera Garnier, La Defense and the Val de Seine. As a consequence workers do not just commute from the suburbs to work in the city of Paris, but also come from the city of Paris to work in the suburbs. At the 1999 census 47.5% of the 5,089,170 people in employment in the metropolitan area of Paris worked within the city of Paris and the Hauts-de-Seine departement (only 31.5% worked exclusively within the city of Paris).

During the 1960’s and 1970’s, the French government has created several villes nouvelles (”new towns”) on the outer ring of Paris agglomeration in order to multipolarize the economy of the city. Economically speaking, those villes nouvelles have been a relative success since many companies are still moving into those areas today. However, they didn’t completely fulfilled their mission of multipolarization since economical activities remain widely concentrated in the central core of the metropolitan area.

Workforce and sectors of the Paris economy

As of the 1999 census, there were 5,089,170 [7] persons employed in the metropolitan area (AU) of Paris. At the same 1999 census, 4,949,306 [8] people living in the metropolitan area (AU) of Paris had a job. The almost 140,000 people difference between these two figures comes from an outflow of about 60,000 people living inside the metropolitan area (AU) who work outside of the metropolitan area (AU), and an inflow of about 200,000 people living outside of the metropolitan area (AU) who come to work inside the metropolitan area (AU) every day. Thus, out of the 5,089,170 people employed in the metropolitan area (AU) in 1999, only about 200,000 people (3.9% of the total) lived outside of the metropolitan area (AU), which is not surprising since the boundaries of the metropolitan area (AU) are based on commuting patterns (see: aire urbaine).

Of the 5,089,170 persons employed in the metropolitan area (AU) of Paris in 1999, 1,600,815 (31.5%) [9] worked inside the city of Paris proper, while 3,488,355 (68.5%) worked in the suburbs. Well into the middle of the 20th century, the majority of jobs in the metropolitan area were concentrated in the city of Paris proper. However, after the Second World War the economic activity relocated to the suburbs, and the city has been steadily losing jobs to the benefit of the suburbs, in particular the Hauts-de-Seine (92) departement, home of the new La Defense business district, to the west of the city proper. Hauts-de-Seine has become a sort of extension of central Paris, with 815,471 [10] persons employed in 1999, half as many as in the city of Paris proper. Thus, Hauts-de-Seine and Paris together still harbored 47.5% of all persons employed in the metropolitan area (UA) in 1999, which should help to put into perspective the phenomenon of job relocation to the suburbs: it was as much a relocation to the suburbs as an extension of central Paris beyond the administrative limits of the city.

The figures below, extracted from the 1999 census [11], show the distribution of the 5,089,170 persons employed in the metropolitan area (AU) of Paris in 1999 across the different economic sectors. This will give a sense of the extreme diversity of the Paris economy, marked nonetheless by the notable dominance of services.
Primary sector: Agriculture, forestry, and fishing: 26,741 persons in employment (0.5% of total workforce)
Secondary sector: Manufacturing and mining, construction, and utilities: 913,503 p. in emp. (17.9% of t. wf)
Manufacturing (includes mining and oil and gas extraction): 627,534 p. in emp. (12.3 % of t. wf)
The manufacturing industries employing most people are:
Electronic and electrical equipments, appliances, and components: 112,281 p. in emp. (2.2% of t. wf)
This branch is made of: computers and peripheral equipments; mobile phones; radio and television broadcasting and wireless communications equipments; semiconductors and other electronic components; navigational, measuring, electromedical, and control instruments; electrical engines; electric lighting equipments; miscellaneous electrical equipments (cables, transformers, switchboards, etc.). This branch DOES NOT include household electronic and electrical appliances (televisions, radios, DVD players, ovens, refrigerators, watches, clocks, etc.).
Publishing, printing, and reproduction of recorded media: 87,599 p. in emp. (1.7% of t. wf)
Books, newspapers, magazines, etc. This branch DOES NOT include the motion picture and sound recording industries, neither does it include the broadcasting industries.
Foodstuff, beverages, and tobacco products manufacturing: 59,862 p. in emp. (1.2% of t. wf)
Machinery and equipment manufacturing: 56,270 p. in emp. (1.1% of t. wf)
This branch is made of: engine, turbine, and power transmission equipments; pumps and compressors; material handling equipments; ventilation, heating, air-conditioning, and commercial refrigeration equipments; agriculture, construction, and mining machinery; machine tools; industrial molds; industrial machinery (plastics and rubber industry machinery, textile machinery, etc.); and other general purpose machinery (welding and soldering equipments, industrial process furnaces and ovens, scales and balances (except laboratory), etc.). This branch DOES ALSO INCLUDE three industries generally listed under “Fabricated metal products manufacturing” in Anglo-Saxon classifications: architectural and structural metals manufacturing; boilers, tanks, and shipping containers; and arms and ammunitions.
Motor vehicles, trailers, and motor vehicle parts manufacturing (”car industry”): 52,149 p. in emp. (1.0% of t. wf)
Construction: 235,872 p. in emp. (4.6% of t. wf)
Utilities: Electricity, natural gas and water supply: 50,097 p. in emp. (1.0% of t. wf)
Tertiary sector: Services: 4,148,935 p. in emp. (81.6% of t. wf)
The services employing most people are:
Business services (include rental and leasing services): 841,157 p. in emp. (16.5% of t. wf)
Professional and technical services: 509,048 p. in emp. (10.0% of t. wf)
This branch is made of: computer systems design and related services; data processing, hosting, and related services; software publishing; legal services; accounting, tax preparation, bookkeeping, and payroll services; management of companies and enterprises; administrative management and general management consulting; human resources and executive search consulting; marketing consulting; process, physical distribution, and logistics consulting; environmental consulting; advertising and related services; and architectural, engineering, and related services.
Administrative, support, and waste management services: 272,981 p. in emp. (5.4% of t. wf)
This branch is made of: employment services (placement, temporary); investigation and security services; services to buildings and dwellings; photographic services; office administrative services; translation and interpretation services; business support services (call centers, collection agencies, etc.); packaging and labeling services; convention and trade show organizers; and waste management and remediation services. This branch DOES ALSO INCLUDE renting and leasing of machinery and equipment without operator and of personal and household goods, which is generally listed along with “Real estate” in Anglo-Saxon classifications.
Research and development: 59,128 p. in emp. (1.1% of t. wf)
Commerce: 660,843 p. in emp. (13.0% of t. wf)
Retail trade (except of motor vehicles) and repair: 308,323 p. in emp. (6.1% of t. wf)
Wholesale and commission trade (except of motor vehicles): 276,282 p. in emp. (5.4% of t. wf)
Sale, maintenance, and repair of motor vehicles: 76,238 p. in emp. (1.5% of t. wf)
Public administrations and defense: 510,972 p. in emp. (10.0% of t. wf)
Health services and social assistance: 451,373 p. in emp. (8.7% of t. wf)
Transportation, storage, and communications: 419,779 p. in emp. (8.2% of t. wf)
This branch is made of: public and private transportation of passengers and freight; warehousing and storage; travel agencies; post and couriers; and telecommunications.
Education: 334,852 p. in emp. (6.6% of t. wf)
Finance and insurance: 256,722 p. in emp. (5.0% of t. wf)
Accommodation and food services (hotels and restaurants): 202,228 p. in emp. (4.0% of t. wf)