The French government will make Paris a centre of excellence for open-source software development, it has announced.

French Minister of the Economy, Finance and Industry, Thierry Breton, said the goal of the centre will be to develop a healthy and profitable open-source software industry.

Breton, previously head of France Telecom, announced the plan at a news conference to discuss a new report on the French economy's future, "The intangible economy: tomorrow's growth" [pdf].

A new economic and technological model, built on free software, is forming in the IT industry, Breton said. As this new opportunity opens up, it is "calling into question the dominant positions formed in the software industry over the last 15 years." France must seize this opportunity, in a sector where the country is teeming with talent, he said.

Breton hopes that sales of software and other intangibles will help the French economy grow by between three percent and four percent annually. In contrast, the Chinese economy, based on more tangible goods such as the export of computers, is growing at around 10 percent annually, according to figures from the OECD.

A group of academics and open-source software entrepreneurs have been brought in to create the centre of excellence. Roberto Di Cosmo, professor at the University of Paris, will lead the group, assisted by Alexandre Zapolsky, CEO of open-source software services company Linagora. François Bancilhon, CEO of Linux distributor Mandriva and Stéfane Fermigier, CEO of open-source enterprise content management software company Nuxeo will also take part.

The group's members said the centre will allow the Paris region to renew its industrial base and slow the loss of jobs to low-cost locations. Although the Internet other tools have simplified virtual collaborative working, software development still needs a physical place, Di Cosmo said. "It would be very naïve to forget the importance of human contact, and the physical environment in which many projects grow before moving into the virtual phase. If everything is so simple in the virtual world, why are there so many developers' conferences?" he said.

Explaining the choice of Paris, Fermigier said, "We work with many people elsewhere, but the kernel is in the Paris region." While Breton is clearly most concerned with France's economic growth, the centre will also contribute to the development of the software industry across the European Union, Fermigier said.