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Could the French fondness for a single job for life be giving away to a new spirit of entrepreneurialism? The number of new private businesses launched in France is soaring. June saw an all-time record, and figures in July were only slightly off that pace. French officials estimate that by the end of 2009 France will be about half a million new firms better off. In 2008 just 328,000 small companies were created, and in 2007 the figure was 321,000.

The fact that French private enterprise is surging in the middle of the world's worst economic crisis in 50 years is as surprising as its cause. The motor driving all that bustling start-up action is an innovation known as auto-entrepreneur, a government scheme introduced in January to help would-be bosses bypass the formidable process of founding a small business. The scheme cuts through the jungle of administrative red tape usually required to launch a company, and dramatically lightens the heavy taxes and social charges companies pay. While other firms face set charges whether business is booming or bust, auto-entrepreneurs are taxed only on sales.

Not surprisingly, the scheme has accounted for more than half of all new companies founded thus far this year. "The auto-entrepreneur plan has been an impressive success, beyond what we'd been counting on," noted Hervé Novelli, secretary of state for small- and medium-size businesses, in late July.

There are some caveats to the scheme's accomplishments. First, it's primarily aimed at individuals who already have jobs, or at unemployed or retired people who yearn to try their hand at a service they think might find a market. Because of that, new companies created by auto-entrepreneurs start out as single-person operations — and usually as part-time or moonlighting ventures. If business starts booming, neophyte owners who take on employees have to register under the normal labor regime, which means assuming the taxes and salary-linked social charges that prove so dissuasive to many would-be entrepreneurs in the first place.

Those growth limits can be frustrating for first-time business people. "I'm already on target to reach the income limitation for auto-entrepreneurs by September," says Isabelle Prigent-Chesnel, a 36-year-old communications consultant who in May decided to found a freelance business through the scheme rather than return to her salaried job after the birth of her second child. "That means I've got a decision to make about where to take this. I'm finally doing only the work I enjoy, but would have never launched into on my own before."

Though auto-entrepreneurs like Prigent-Chesnel praise the program for allowing people to become their own bosses, they also say the limitations it imposes on start-up businesses means it won't create jobs for enough of France's 2.4 million registered unemployed. And even if most of the projected 500,000 new companies launched this year wind up prospering, their tiny size isn't going to make a big dent in the country's economic decline in 2009, which economists estimate will be at least 3%.

Still, any movement that reverses the long-held negative attitudes in France about starting a small business has got be good in the long term. "There are a lot more people out there in France who would love to try their hand at running a business and selling a service, but haven't even tried," says Aurore Longuet, a spokeswoman for the Economy Ministry's small- and medium-size business secretariat. "What we're saying to them is, 'Give it a try — it's easy now, and you have nothing to lose.'"

Prigent-Chesnel is spreading the word on a blog that offers encouragement and tips to people contemplating joining the ranks of the new entrepreneurs. So far, two-thirds of that group are men, aged 40 on average. About 33% are salaried employees starting up a sideline business, 25% are unemployed and 6% are retirees. Later this year, the program will take private enterprise to the public sector by opening auto-entrepreneur to civil servants. If it continues at its current pace, the scheme will prove that France not only has a word for entrepreneur, but also a growing army of people who fit that description.

• Bruce Crumley
• A new scheme in France encourages would-be bosses by cutting red tape