Economy of Paris

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Paris as an engine of the global economy: La Défense (in the background), the largest purpose-built business district of Europe, with 3.5 million m² of office space.
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Paris as an engine of the global economy: La Défense (in the background), the largest purpose-built business district of Europe, with 3.5 million m² of office space.

The metropolitan area of Paris is one of the engines of the global economy. In 2003 the GDP of the metropolitan area (Ile de France) of Paris as calculated by INSEE was US$513.4 billion [1] (at real exchange rates, not at PPP). If it were a country, the metropolitan area (IdF) of Paris would be the 14th largest economy in the world (as of 2003)[2], above Brazil (US$492.3 billion) [2] and Russia (US$432.9 billion) [2].

Although in terms of population the Paris metropolitan area is only approximately the 20th largest metropolitan area in the world, its GDP is the sixth largest in the world after the metropolitan areas of Tokyo, New York, Los Angeles, Osaka and London.

The economy of Paris is extremely diverse and has not yet adopted a specialization inside the global economy (unlike Los Angeles with the entertainment industry, or London and New York with financial services). The tourism industry, for instance, employs only 3.6% [3] of the total workforce of the metropolitan area (AU) (as of 1999) and is by no means a major component of the economy. The Paris economy is essentially a service economy. Its manufacturing base is still important, the Paris metropolitan area remaining one of the manufacturing powerhouses of Europe, but it is declining, while there is a clear shift of the Paris economy towards high value-added services, in particular business services.

Contents

Paris GDP

Economically speaking, Paris metropolitan area is among the largest economic centers in the world, with the sixth-largest gross metropolitan product in the world in 2003:

Metropolitan areas 2003 GDP
(in billion US$)
(at real exchange rates)

01- Tokyo

 1,313 [4]

02- New York

 847.6 [5]

03- Los Angeles

 699.8 [5]

04- Osaka

 577 [4]

05- London

 557.4 [6]

06- Paris

 513.4 [1]

Year in, year out, the Paris region accounts for about 29% of the total GDP of metropolitan France, although its 2004 population is only 18.7% of the total population of metropolitan France. According to Eurostat [6], the 2003 GDP of the Paris region accounted alone 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 EU25.

Spatial organization of the Paris economy

As of the 1999 census, there were 5,089,179 [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 5,089,179 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).

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) département, home of the new La Défense business district, to the west of the city proper. Today, 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 département, forming a triangle between the Opéra Garnier, La Défense and the Val de Seine. Hauts-de-Seine has become a sort of extension of central Paris, with 815,471 [9] persons employed in 1999, half as many as in the city of Paris proper (1,600,815 [10] persons employed in 1999).

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. Of the 5,089,179 persons employed in the metropolitan area (AU) of Paris in 1999, only 1,600,815 (31.5%) worked inside the city of Paris proper, while 3,488,355 (68.5%) worked in the suburbs. However, once adding Hauts-de-Seine, the previous figures show that City of Paris and Hauts-de-Seine 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 borders of the city.

During the 1960s and 1970s, the French government created several villes nouvelles ("new towns") on the outer ring of Paris suburbs 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 fulfill their role of multipolarization: economic activities still remain in a large measure concentrated in the central core (City of Paris and Hauts-de-Seine) of the metropolitan area, as the above employment figures show.

Sectors of the Paris economy

The figures below, extracted from the 1999 census [11], show the distribution of the 5,089,179 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)

Manufacturing

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Business services

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Commerce and finance

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References

  1. ↑  Insee source: €454,898 million, i.e. US$513.4 billion at real exchange rates, using OECD conversion rate for 2003.
  2. ↑  World Bank list of countries ranked by GDP as of 2003
  3. ↑  Insee Île-de-France study, March 2004: Jobs in the sectors of the tourism industry
  4. ↑  GDP of Japanese prefectures published by the Economic and Social Institute, Cabinet Office, Government of Japan
  5. ↑  The Role of Metro Areas in the U.S. Economy published by The United States Conference of Mayors
  6. ↑ http://www.statistics.gov.uk/statbase/Product.asp?vlnk=13217 The GDP number for London corresponds to the Larger Urban Zone (LUZ) for London, as defined by Eurostat. National Statistics provides 2001 numbers for the LUZ and 2003 numbers for Greater London. In calculating the GDP for the London LUZ we assume the growth rate between 2001 and 2003 to be the same for the LUZ and Greater London. National Statistics reports the GDP for LUZ London in euros, €494,296 million, i.e. US$557.4 billion at real exchange rates, using OECD conversion rate for 2003. The definition of Larger Urban Zone has been created by Eurostat to generate comparable figures for metropolitan areas. The LUZ for Paris corresponds to Ile-de-France.
  7. ↑  1999 French census, Total employment at workplace by gender, age, and employment status in the aire urbaine of Paris
  8. ↑  1999 French census, Economically active population by gender, age, and activity status in the aire urbaine of Paris
  9. ↑  1999 French census, Total employment at workplace by gender, age, and employment status in the Hauts-de-Seine département
  10. ↑  1999 French census, Total employment at workplace by gender, age, and employment status in the Paris département
  11. ↑  1999 French census, Total employment at workplace by gender, employment status, and economic sector in the aire urbaine of Paris

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