The French government plans to make the region around Paris a center of excellence for open-source software development, the French minister of the Economy, Finance and Industry, Thierry Breton, said Monday.

The goal of the center of excellence is 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."

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 3 percent and 4 percent annually. In contrast, the Chinese economy, based on more tangible goods such as the export of computers, is growing at about 10 percent annually, according to figures from the Organization for Economic Co-operation and Development.

A group of academics and open-source software entrepreneurs have come together to create the center of excellence. Roberto Di Cosmo, professor at the University of Paris 7, will lead the group, assisted by Alexandre Zapolsky, chief executive officer (CEO) of open-source software services company Linagora. Francois Bancilhon, CEO of Linux distributor Mandriva, and Stefane Fermigier, CEO of open-source enterprise content management software company Nuxeo, will also take part.

The group’s members said the center of excellence will allow the Paris region to renew its industrial base and slow the loss of jobs to low-cost locations.

Although the Internet tools have simplified virtual collaborative working, software development still needs a physical place, Di Cosmo said via e-mail.

"It would be very naive 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 as a center, 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 center will also contribute to the development of the software industry across the European Union, Fermigier said.

The French government has published the report as a PDF.