By Michel Rose

PARIS, Feb 20 (Reuters) - France is ready to invest in artificial intelligence, blockchain and data mining to "transform" its sprawling bureaucracy instead of simply trimming budgets and jobs, its administration reform tsar said.

The 39-year old former telecoms executive whom President Emmanuel Macron has charged with reforming the public sector said he believed technology would win support from government employees and in the end produce less costly public services.

Macron himself is coming under pressure from budget watchdogs and Brussels to spell out how he plans to cut 60 billion euros ($74 billion) in public spending and 120,000 public sector jobs to fulfil pledges made in his election campaign.

Chatbots - software that can answer users' questions with a conversational approach - or algorithms helping the taxman to target potential tax evaders, were some of the possibilities offered by technology, Thomas Cazenave told Reuters in an interview.

"The state ... must not fall behind, get 'uberised' and shrivel up," Thomas Cazenave told Reuters in an interview.

"The potential created by digitalisation, data and artificial intelligence will help put fewer employees on some tasks, while reinvesting in others," he said.

A 700 million euro ($864 million) fund will help invest in IT projects over the next five years to help modernise administration in the highly centralised country and automate some activities.

Cazenave is one of the 'Macron boys' whose mix of top civil service pedigree and private sector experience is being used to shake up France's 5.5 million-strong army of government employees and cut one of the highest public spending ratios in the world.

Only two months younger than Macron, the two met over 10 years ago when they joined the highly selective corps of finance civil servants after graduating from ENA, a graduate school of public administration for the French elite.

Cazenave then became the number 2 human resources executive at telecoms firm Orange, a company which transitioned from government monopoly to globalised private champion. In 2016, Macron prefaced Cazenave's book, "The State in Start-Up Mode".

"Like me, the president feels very deeply that these are no longer times where public services can be reformed with small tweaks. Major transformations are needed," Cazenave said.

SENSITIVE SUBJECT

However, despite frequently referring to transformation and revolution, Macron has taken a cautious approach on belt-tightening measures, with very few details given so far on where the axe will fall.

His budget minister said this month a voluntary redundancy plan could be on the cards, but did not elaborate. More details are expected to be announced in March/April but legislation is not expected before early 2019.

Cazenave said taking time to consult employees was necessary to get government employees on board and to review which public services still need to be ran by government, and which can be outsourced or even abandoned.

He also said previous spending cut plans, such as former conservative leader Nicolas Sarkozy's decision not to fill one in two vacancies left by retiring baby-boomers had failed to curb spending because the state's remit had not been changed.

Outsourcing some public services is currently being considered, he said, but the example of British outsourcing firm Carillion's collapse showed it could not be replicated everywhere.

"There is no place for ideology on the outsourcing debate, in one way or another. The private sector doesn't have a definitive superiority to the public sector," he said. ($1 = 0.8097 euros) (Reporting by Michel Rose; Editing by Richard Balmforth)

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