By Martin Houghton, Senior Associate, Trends Business Research (TBR)
Analysis of inward and outward migration by businesses over the period 2008 to 2012 reveal that the City of London – or ‘Square Mile’ – achieved a net gain of over 220 new businesses, 13,500 new employees and over £3.5bn in Gross Value Added (GVA) output. This meant that while the business population shrunk by some 12% and one percent of jobs were lost, overall output was up by nearly 7.5%. Over this challenging post-recession period then, businesses in the City have become ‘leaner and meaner’, increasing in productivity and efficiency. Without these positive impacts of firm migration, the City of London would have lost over 2,500 businesses, 22,000 jobs and nearly £2bn in output over this period.
Moreover, though home to only 4% of London’s businesses, the Square Mile provides 8% of the capital’s employment and generates 16% of the output, a truly remarkable statement of the importance of the City to the economy of both the capital and the nation.
These are just some of the headline findings from a research report published today by the City of London Corporation. The work was carried out by Trends Business Research (TBR).
The research makes use of the Components of Change model developed by TBR, which considers the impact of business start-ups and closures, firm migration and ‘continuing businesses’ on economic change, factors which are often overlooked.
The research also looks at the nature of the City property offer and contrasts the take-up of space by firms moving into the City from outside, with those relocating into the City from serviced premises and the market as a whole. This analysis highlights the growing importance of serviced premises and the increasing jobs and economic output generated by their business tenants.
In addition, a review of the four key business clusters centred around the City - Financial Services; Insurance; Professional Services; and Technology, Media and Telecommunications (TMT) highlights the continuing diversification of the City business population, with increasing numbers of Professional Services and TMT firms.
The report therefore highlights that the churn of businesses through firm migration into and out of the City, has helped to provide a dynamic business environment and in so doing, strengthen the City economy over a challenging period.
The report is authored by TBR’s Economic Research Team - Martin Houghton, Senior Associate, Andrew License, Senior Research Analyst, and Mark Edward, Research Analyst. The full research report can be downloaded from the City of London Website.