London is still at the top of the pile as the best city for businesses to establish global teams and create innovative ideas.
According to new figures from the City of London Corporation and the City Property Association, 37% of more than 450 senior leaders of large companies surveyed placed the UK capital ahead of New York (26%), Paris (20%) and Singapore (17%) as the best place to locate their global teams.
In addition, 35% of respondents rated London as the global frontrunner for innovation that increases revenue, with New York just behind (31%) followed by Singapore (17%) and Paris (15%).
The results are reported in a new research publication, Locate, create and innovate: London in a changing world, which looks at how fast-evolving technologies are affecting businesses’ decisions when they look for locations for offices.
It shows that the influence of tech and the need to innovate is forcing businesses to establish offices close to tech hubs – such as Citigroup’s base at Moorgate to ensure access to the tech firms of Silicon Roundabout – or create in-house innovation labs to bring in the talent required – as Lloyd’s of London has done.
Tech-aligned firms want to be near each other so that they can feed off each other’s knowledge, which is seen as a crucial innovation driver, the report said.
Businesses highlighted that competition for skills in tech and product development, customer design, data science and software engineering is increasingly fierce. This means that access to top talent with these skillsets is a key consideration when choosing where to locate offices.
And London attracts tech specialists from all over the world, with 40% of its tech workers now coming from overseas, according to London and Partners.
For example, Lloyds Banking Group is creating more than 2,000 permanent roles across the UK, with a focus on software engineers, designers and emerging areas in data and machine intelligence, according to Charles Talbot, who is responsible for scaled agile transformation at the firm.
And the new headquarters of some of the biggest tech firms – such as Amazon, Apple, Google and Facebook – will together house more than 20,000 tech professionals. In addition, three new buildings in the City of London’s Eastern cluster will together house nearly 30,000 workers.
Consolidation
Another trend picked up on in the report is consolidation: firms are now co-locating different functions within their businesses, to encourage collaboration across different teams to drive innovation and better ways of working.
For example, Deutsche Bank’s employees were spread across 21 different London locations before the company decided to consolidate them into just three properties to make its processes more efficient and innovative.
BT and Lloyds Banking Group have brought functions such as software and product development together under one roof to create and test new solutions more efficiently.
The onus, then, is on the property industry to create buildings that cater to these requirements – which include flexible space and options with lease terms that can accommodate rapid growth. Many landlords are already “curating” the mix of tenants within their properties to make them more appealing to other potential occupiers.
Catherine McGuinness, policy chair of the City of London Corporation, said: “This data shows that businesses place a high value on the capital’s innovative cluster of talent and creative energy when it comes to making location decisions.
“Firms are becoming more and more technologically focused. In just five years we have seen a 31% increase in London’s information and communications jobs, and international workers make up 40% of London’s highly skilled tech workforce.
“As the concentration of financial, professional services and TMT industries blend, it is vital that London continues to be the first to attract top talent. This is a crucial factor – alongside the city’s business landscape, commercial real estate, and mixed offering of flexible workspace, culture and lively public spaces – when it comes to ensuring its continuing appeal to domestic and international investors.”
David Ainsworth, president of the City Property Association, said: “Across all sectors, companies are using data and new technologies to drive growth and productivity. This report shows that the rise of tech is, counter-intuitively, increasing demand for workspace that encourages human interaction.
“London’s property industry is rising to this challenge. In the City and across central London, the collaborative workplaces of the future are being built, alongside world-class public spaces and exciting cultural and retail experiences. This dynamism ensures that London is a world leader in fostering innovation and attracting global business.”
Christopher Hayward, chairman of the planning and transportation committee at the City of London, said: “It is remarkable the resilience of London in times of challenge, like we’re currently going through, but I think one of the reasons for that resilience is that we have always been a progressive city. We’ve always been flexible and we’ve always changed according to the needs and demands of businesses. We’ve never stood still.”
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