Nothing better sums up the ambitions of the Rhône-Alpes region to become a leader in the knowledge economy than the Giant Project at Grenoble.

A 220-hectare peninsula running north-west from the city centre, bounded by the confluence of the Isère and Drac rivers, is slated to become France’s answer to the Massachusetts Institute of Technology by 2016.

Grenoble is already home to a number of prestigious institutions, including a national centre for scientific research, the Grenoble Centre for Atomic Energy, an engineering school, universities and Grenoble EM management school.

Research efforts at Giant will be focused on three areas where the region already claims world-class excellence: micro and nanotechnologies, new energy technologies and biotech.

These industries fall within nationally funded competitiveness clusters called Minalogic, Tenerdis and Lyon Biopôle, respectively.

The clusters help to channel billions of euros to collaborative research and development projects.

The idea of trying to replicate the success of MIT or Silicon Valley in the valleys of the Isère and Rhône, albeit in different industries, makes some sense.

Hydro-electric power was invented in Grenoble, while the region around Lyo,n 100km away, is the historic home of the French chemical and pharmaceutical industries.

The related scientific and educational infrastructure is well-established: Lyon alone counts 140,000 students – the second-biggest concentration in France.

The lifestyle, too, is attractive. Reaching the ski slopes takes little longer than it takes many city-dwellers elsewhere to get to the supermarket. Mediterranean beaches are only a couple of hours away.

Lyon has outstanding highway, rail and airport connections, including rail services to Paris with a two-hour journey time.

The city is France’s second-largest and generates annual gross domestic product per head of more than €33,000.

The city’s office market, though only a 10th of the size of Paris, has grown rapidly in the Part Dieu business district. Helped by prime rents of about €250 per square metre, only half those of comparable Paris property, Lyon has become a flourishing home for back-office activities in financial services and business administration.

But the economy remains a mix of industry and services, and not all are thriving. The challenge for local officials is to encourage the type of knowledge collaboration that is expected to give rise to the industries of tomorrow.

The most promising of these technology beacons is Lyon Biopôle, focused on a cluster of pharmaceutical and healthcare organisations including Sanofi Pasteur, BioMérieux, and US medical technology and diagnostics group Becton Dickinson.

Altogether, the sector employs 67,000 of the city’s workers. The cluster is home to medical companies that are researching infectious diseases and combating cancer.

A second cluster, Axelera, draws on historic industries to focus on environmental chemistry projects.

Lyon also has three lesser industrial concentrations, each coming under the umbrella of a government sponsored cluster organisation, in public transport systems (Lyon Urban Truck & Bus); digital leisure (Imaginove); and technical and functional textiles (Techtera).

Jacques de Chilly, chief executive of Aderly, an inward investment agency, says: “There was already a lot of collaboration and technology transfer. But the difference now is that the clusters establish common research goals.

“[But] people don’t yet recognise Lyon as the European or global capital in these areas,” he says.

To most outsiders, Lyon is a gastronomic rather than a technology capital. Yet it is the second-most successful area in France at attracting inward investment after the Paris region.

Last year, Lyon drew 69 foreign direct investment projects, but only a third were in sectors linked to its industry clusters. And these tended to be research-related, and bring only 20 to 25 jobs per project.

Lyon, he says, still needs traditional manufacturing and distribution jobs.

Logistics is certainly a strong sector, easily overlooked. As a rail and highway hub, Lyon has become a transport crossroads.

Norbert Dentressangle, one of Europe’s most successful logistics companies, is based south of the city.

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