This is an answer by French online entrepreneur, Lise Slimane on Quora. I asked her permission and posted it here. She launched a website to help freelancers.

Lise: I’m french so I mostly know about French innovative clusters (and would recommend France for its infrastructure, low cost for hiring IT professionals and quality of their training, its quality of life,¬†lower living expenses compared to hubs like London or Munich).
France and several European countries have created incentives for entrepreneurs with subventions, partnerships available with universities, and tax deduction if you invest 15% of your revenue in R&D. You can look up for specialized “clusters” (e.g.: space cluster Europe) and you will have ideas about what exists.
There is a strong advantage about starting in a smaller city (e.g.: Bordeaux): there are less start-ups, hence less difficulties to hire good engineers at a low cost (starts at 40K for a junior web developer), less competition for subventions and entries in incubators.

1. IT: London / Berlin / France (Paris, Sophia-Antipolis, Bordeaux)
2. Finance: London
3. Space: Toulouse, France
4. Robotics: Bordeaux (Aquitaine region in general)
5. Biotechnology: Germany – Bavarian region
6. Mechanical Engineering: Lyon (France), Germany, Belgium (Wallon region)
7. Electrical Engineering: Paris

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