What U.S. Businesses Can Learn from their French Counterparts (and Vice Versa)

Dozens of tech entrepreneurs, from fledgling startups like Wistiki and Prynt, to tech powerhouses like Withings and Parrot, will gather Oct. 21 at the Pavillon Cambon Capucines to showcase their latest innovations to the press and industry analysts at CES Unveiled Paris.

For the third consecutive year, the Consumer Electronics Association (CEA)® chose to host this event in Paris because of France's proven reputation as a hotspot for startups and innovation. Music streaming service Deezer, video-sharing website Dailymotion and ridesharing service BlaBlaCar are among the many innovative tech companies that call France home - and every year, the size and scope of the French tech delegation at CES in Las Vegas expands, with 70 French startups presenting at the 2015 International CES.

From food to fashion to art, and now to tech - France has a record of forward-looking creativity. According to CEA research, one in five online French adults are tech innovators or early adopters - among the first to pick up on new consumer tech trends.

France's pro-innovation culture is being fostered from within. Economic Minister Emmanuel Macron is leading an effort to change France's business reputation by promoting innovation and startups - with significant early success. France recently modified its confiscatory income tax on top earners. And President Francois Hollande's campaign suggestion to restrict employee emails to working hours never gained traction.

As Hollande focuses more attention on fostering entrepreneurship and innovation, my own country is finding new ways to hamstring startups and small businesses. Most recently, the Obama administration proposed an unprecedented 113 percent increase in the minimum salary to qualify as an exempt employee, a move that would make 4.6 million more U.S. workers eligible for overtime pay.

The current law, which requires overtime be paid to employees making less than $455 a week, has been a bonanza for plaintiffs' attorneys. Infringement cases spiked 237 percent between 2004 and 2014, and the average settlement is $5.3 million "because the rules are so uncertain," according to a recent Wall Street Journal editorial.

When France dipped its toes into overtime regulation, it was met with harsh criticism from the business community as well as individuals - workers at one public French hospital accrued more than 2 million vacation days for working overtime - causing an employment conundrum that required the French government to step in. The U.S. should learn from France's missteps.

And the lessons in innovation flow both ways across the Atlantic. In September, France's highest court ruled that the law by which Uber's low-cost ridesharing service uberPOP was banned was constitutional, following a round of strikes and violent protests by French cab drivers that snarled traffic across the country. Two Uber execs were even arrested and charged with running an illegal taxi service as regulators tried to strongarm Uber out of France.

Suspending uberPOP service deprives French citizens of an efficient, on-demand transportation choice. More, it diminishes the added income potential for uberPOP drivers, who, according to a study commissioned by the French Senate, earn 8,200 euros per year. French regulators should take a cue from their U.S. counterparts and allow the sharing economy to thrive, rather than protect outdated business models, stifle new businesses and irritate consumers.

What happens next with Uber in France could be Hollande's defining innovation moment. When Virginia Governor Terry McAuliffe faced a similar moment last winter, he chose Uber, and tens of thousands of Uber users and drivers in the state applauded.

Meanwhile, President Obama's push for overtime pay could make or break small businesses that can't afford to pay the high salaries of more established companies. These smaller startups offer new hires are an attractive option for recent graduates who accept lower salaries and long hours in exchange for on-the-job training.

Let's hope our forward-looking U.S. and French leaders choose the future of choice and innovation over outdated and Laissez-faire attitudes. Both are nations of entrepreneurs and innovators - we need rules that promote these business ideals, not impede them.

Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA)®, the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own. Connect with him on Twitter: @GaryShapiro