In the three-and-a-half years since the UK voted to leave the European Union (EU) much has been written about how London’s status as a global leader in financial services could be weakened. However, with a diverse economy, highly skilled workforce, wide tourist demand, world-class universities and cultural appeal, London will not only survive Brexit, but will continue to thrive.
There is more to London than financial services
If Brexit does result in a widespread exodus of financial firms from London (which we view as unlikely), the tech industry has the potential to become just as important, if not more so, in the future.
Media and technology is now a much faster-growing sector for London, with a multitude of start-ups based in the city. The fact that both Google and Apple chose London as their European headquarters demonstrates the broad level of long-term confidence that businesses have in the city. The tech sector is also more flexible and vibrant, and less restricted by regulations and red tape than the finance industry.
The city’s legal sector also continues to expand, with many foreign companies and individuals choosing to settle legal disputes in the UK capital. Likewise, insurance also remains an important and long-standing industry for London.
London is perfectly positioned to trade as a world city
London’s geographical location between Asia and North America means it is perfectly positioned as one of the command centres for the global economy, along with New York and Tokyo. Leaving the EU is unlikely to affect its status as an influential global city.
In the most recent Schroders Global Cities Index, London was ranked second, finishing behind Los Angeles. The index aims to rank the most attractive cities to invest in over the next 10 years. London has a highly developed transport infrastructure which includes Europe’s busiest airport (London Heathrow). In addition, it is London’s cultural appeal which includes museums, theatres, art galleries as well as vast amounts of open spaces and parks, which attracts so many people to the city.
London is the biggest city in Europe and one of only two Alpha++ cities in the world
With a population of almost nine million, London is the biggest city in Europe and one of the largest in the world. It is one of only two cities in the world to be ranked Alpha++ by the think tank Globalization and World Cities Research Network. Alpha ++ cities are those that are most integrated with the global economy (the other Alpha++ city is New York).
The bigger London gets, the more efficient it becomes and the more people it attracts. This is the power of urbanisation. The vast number of people living in London, and the fact that increasing numbers of people are living in the centre of the city, also means that services such as car sharing are able to operate effectively.
Throughout history, London has continually reinvented itself
Founded by the Romans, more than 2,000 years ago, London has a long and impressive history. The city’s historic and cultural attractions, which include Buckingham Palace, Westminster Abbey and the Tower of London, mean that London is a major tourist destination.
According to the most recent annual Global Destination Cities Index, London was the third most visited city in the world, with 19.1 million visitors in 2018. The city also benefits from a world-renowned theatre district, a diverse range of shops and shopping districts, world-class restaurants and a number of world famous sporting venues. London is also home to a wide range of museums and art galleries, including the Victoria and Albert (V&A) and the Tate Modern.
London is home to a number of world-class universities
London has one of the highest concentrations of universities and higher education institutions in the world and a student population of more than 400,000. Among this list are a number of world-class institutions, such as Imperial College, University College London, the London School of Economics and Kings College.
Although Brexit may make it more difficult for EU students to study in London, increasing numbers of students from Asia (China, in particular) will more than make up for any potential decline in the number of EU students. In fact, students from the EU has been a low-growth area for a number of years, with Asia the biggest growth area. The university sector is now such an important part of London’s economy that the government would be reluctant to impose any restrictions on foreign students to maintain the sector’s economic viability.
London has a large and well-educated workforce
As the UK’s capital and the biggest city in Europe, London continues to attract talented and educated people seeking employment or the opportunity to study or start businesses. According to official data for 2017, 56% of people living in London are university graduates. This compares to 33% in the North East region of the UK.
The economic strength of London is improved by higher quality graduates. These graduates often gain higher paying jobs, fuelling positive demand in the city.
London has a well-developed (and expanding) public transport network
London’s extensive public transport network encompasses buses, trains (both over ground and underground), trams, riverboats and a cycle hire scheme (known as “Boris Bikes” after the current prime minister, who at the time the scheme was launched was the mayor of London).
Crossrail, a new 73-mile railway running through London from Reading in the west to Abbey Wood and Shenfield in the east, is due to open in late 2020 or early 2021. The new high-speed line, which will be known as the Elizabeth Line, will not only speed up the journey time into and out of the city, but will expand the capacity of London’s public transport network and open up the city to its outer suburbs.
- For more from Schroders’ Global Cities team visit their blog