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Economy of Paris

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Please read the important note at the end of this article for an explanation of the (AU) and (IdF) abbreviations.


File:La Défense3.jpg
Paris as an engine of the global economy: La Défense (in the background), the largest business district of Europe.

The metropolitan area of Paris is one of the engines of the global economy. In 2003 the GDP of the metropolitan area (IdF) of Paris as calculated by INSEE was US$506.7 billion [1] (at real exchange rates, not at PPP). If it were a country, the metropolitan area (IdF) of Paris would be the 15th largest economy in the world (as of 2003), 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 fifth largest in the world after the metropolitan areas of Tokyo, New York, Los Angeles, and Osaka, and is on par with the GDP of the London metropolitan area (see GDP section below).

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 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.

Paris GDP

Year in, year out, the metropolitan area of Paris 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 [4], the GDP of the metropolitan area of Paris 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. Inside Europe, the only other metropolitan area that can compare with Paris is London. The GDP of either Paris or London metropolitan areas far outweighs the GDP of any other metropolitan area in Europe.

As a matter of comparison, the total GDP of Greater London in 2002, as published by Eurostat [4], was US$313.6 billion at real exchange rates (approximately US$360 billion in 2003 due to the depreciation of the dollar vs. the euro and the British pound). The metropolitan area of London, however, is larger than Greater London proper, but given that no government agency or statistical office has ever officially defined the extent of London metropolitan area, it is difficult to give a figure for its GDP. According to Eurostat figures [4], the combined GDP of Greater London and all the NUTS 2 regions around Greater London was US$581.6 billion in 2002 (approximately US$668 billion in 2003). However, this vast area extends from Brighton to Oxford to Bedford to Colchester to Dover and is much larger than what most statisticians understand as the metropolitan area of London. Thus, we can only say that in 2003 the actual GDP figure for the metropolitan area of London was somewhere between US$360 billion and US$668 billion; and it seems reasonable to say that the total GDP of London metropolitan area is approximately equal to the total GDP of Paris metropolitan area (US$506.7 billion).

In North America, there are only two metropolitan areas that have a GDP larger than Paris: the New York-Newark-Bridgeport metropolitan area and the Los Angeles-Riverside-Orange County metropolitan area. According to 2003 figures released by the US Conference of Mayors in October 2004, the total GDP of the New York-Newark-Bridgeport metropolitan area was US$847.6 billion, whereas the total GDP of the Los Angeles-Riverside-Orange County metropolitan area was US$699.8 billion. Paris metropolitan area, with US$506.7 billion, had a larger GDP than all other North American metropolitan areas: Chicago-Naperville-Michigan metropolitan area (US$390.5 billion), Washington-Baltimore-Northern Virginia metropolitan area (US$362.6 billion), San Jose-San Francisco-Oakland metropolitan area (Bay Area) (US$346.4 billion), etc.

Outside of North America, the only other metropolitan areas in the world with a GDP larger than Paris are Tokyo metropolitan area and Osaka-Kobe-Kyoto metropolitan area. According to data from the Government of Japan [5] , the GDP of the Tokyo metropolitan area in 2003 was US$1,313 billion (at real exchange rates), while the GDP of the Osaka-Kobe-Kyoto metropolitan area was US$577 billion.

Paris, which was once one of the five largest cities in the world, is now only approximately the 20th largest metropolitan area in the world, but when looking at GDP figures, it still stands in the top 5 of the largest gross metropolitan products in the world.

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

01- Tokyo

1,313

02- New York

847.6

03- Los Angeles

699.8

04- Osaka

577

05- Paris
05- London

506.7
between 360 and 668


Workforce and sectors of the Paris economy

As of the 1999 census, there were 5,089,170 [6] persons employed in the metropolitan area (AU) of Paris. At the same 1999 census, 4,949,306 [7] 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%) [8] 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) département, home of the new La Défense business district, to the west of the city proper. 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. 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 [10], 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)

Manufacturing

Business services

Commerce and finance

References

  1. ^ Insee source: €448,933 million, i.e. US$506.7 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. ^ Regional GDP in the EU25, Eurostat, April 2005
  5. ^ GDP of Japanese prefectures published by the Economic and Social Institute, Cabinet Office, Government of Japan
  6. ^ 1999 French census, Total employment at workplace by gender, age, and employment status in the aire urbaine of Paris
  7. ^ 1999 French census, Economically active population by gender, age, and activity status in the aire urbaine of Paris
  8. ^ 1999 French census, Total employment at workplace by gender, age, and employment status in the Paris département
  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, employment status, and economic sector in the aire urbaine of Paris

Note

Figures for the metropolitan area of Paris which appear in this article are official INSEE figures for the statistical aire urbaine of Paris. In some cases, figures for the statistical aire urbaine were not available. In these cases, figures for the Île-de-France administrative région were used instead. The Île-de-France région matches quite well the territory of the aire urbaine, although in a few areas the boundaries of Île-de-France and the aire urbaine are different. Whenever aire urbaine figures are used, they are marked as "metropolitan area (AU)", whereas when île-de-France figures are used they are marked as "metropolitan area (IdF)".

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