London is undisputed business capital of Europe
4 April 2014
- London hosts 40% of European headquarters of world’s top companies, nearest rival is Paris with 8%
- 60% of non-European companies with headquarters in Europe are based in the city
- London employs nearly half (46%) of all high-skill workers across Europe’s leading business cities
More of the world’s largest companies make London their European home than any other city, according to new research from Deloitte. London also employs a larger percentage of high-skilled workers than New York, across the top five cities in Europe and North America. By these two measures, London has greater pre-eminence in Europe than New York enjoys in North America.
40% of the largest 250 companies, which are either European or have a European headquarters, are based in London. This compares with 8% in Paris and 3% in Madrid. Of the non-European companies in the 250, 60% have selected London as their European headquarters.
A comparison of high-skill employment in the leading five European and five North American cities shows that, in relative terms, London is again more vital to Europe than New York is to North America. London employs 46% of the five biggest cities’ combined total of high-skilled workers. In contrast, New York employs 31%.
Deloitte analysed the location of the global or regional headquarters of the world’s largest companies in Europe and North America*. The firm also assessed the levels of high-skill employment in the leading five European and five North American business cities**.
“Measured by the locations of business headquarters, London is by far the leading commercial centre and business capital of Europe,” says Angus Knowles-Cutler, London senior partner at Deloitte. “The city is more central to the economy of Europe than New York is to the economy of North America and continues to attract the largest proportion of high-skilled talent.”
Apart from London and Paris, global and regional European headquarters of the Top 250 are split fairly evenly between cities like Madrid, Amsterdam, Brussels, Munich and Moscow. All of the Australian, Brazilian and Mexican companies in the Top 250 have their European headquarters in London.
Half (49%) of US companies in the Top 250 have chosen London as their European base, making the US the city’s largest source of inbound European headquarters, equivalent to 37% of all non-European companies with a base in London. Japan is the second biggest contributor with 29% and 15% of London-based European headquarters are Chinese companies.
A similar analysis of the location of regional headquarters in Asia is more difficult to carry out, but it is clear that no single city has a comparable concentration of major businesses.
Boris Johnson, Mayor of London, said: “Successful global cities thrive on their capacity to draw in business, investment, talent and influence from around the world. No city is stronger in this regard than London, which stands today as the fastest growing city in Europe and an unrivalled international hub for business. Long-term planning is essential to maintain and strengthen the city’s position as the greatest city in the world, and to ensure that those with high-level specialist skills continue to make London their home. This fascinating research by Deloitte contributes greatly to this discussion. I shall consider this report’s recommendations carefully as we plan for London’s continued prosperity.”
“London is a magnet for business and business people,” says Knowles-Cutler. “One of our recent and related studies found that London leads the world when it comes to employing people in high-skill, knowledge-based sectors. Of the 22 high-skill sectors identified, London leads in 12 of these – employing 1.5 million people; with New York employing 1.2 million (leading in seven) and Los Angeles 784,000.”
“London is an extremely attractive city for businesses and individuals for various reasons – easy access to global markets, an adaptable working environment and a stable political environment that is supportive of business. The capital has achieved an enviable global position, with significant benefits to the wider UK economy in terms of tax income, opportunities for talented Britons and national employment. In terms of business leadership, it is the undisputed leader and growth is only set to continue.
“However, this success creates a number of challenges that will have to be met if London is to retain its leading position. Talent is what this great city is built upon. We have to constantly adapt to make sure we get the best people in – and we keep them here.”
Deloitte proposes five recommendations that are crucial to London retaining its position as a destination for the world’s top talent. These include: appointing a Chief Talent Officer for London, focusing on infrastructure and housing needs, strengthening business links with education developing talent in London and the rest of the UK; and implementing an intelligent visa system.
*About the methodology
- The Fortune Global 500 is an annual ranking of the top 500 corporations worldwide (as measured by revenue), compiled and published annually by Fortune magazine. The Top 250 companies in this report are the largest 250 companies in the 2013 rankings of the Fortune Global 500
- For each company in the Top 250, a web-based search was carried out to establish the location of its domestic, European and North American headquarters
- Of the Top 250, 197 were found to have either a global or a regional headquarters in Europe; and of these 197, 113 were non-European companies
- The employment figures for high-skilled labour were obtained from relevant national official statistics or from vetted publications.
**The top cities in Europe and North America for high-skill employment in knowledge-based sectors are: London (46%), New York (31%), Los Angeles (24%), Paris (19%), Chicago (18%), Boston (16%), Berlin (14%), Milan (11%), San Francisco (11%) and Frankfurt (10%).
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
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