London’s Economy, Business Innovation, Â Jobs and Skills, Industry and Infrastructure
The city London has been spearheading economic growth for decades. The city has paved the way to economic recovery following the recession and most analysts believe that it is well on its way to outperform the rest of the United Kingdom in various key economic indicators.
London’s economy: Recent figures
At approximately £375 billion per year, London has the UK’s highest GVA. GVA per worker is the country’s second highest at £70,100. The city offers a favourable environment for both established and new businesses, and this is evident in the rather low business churn rate (7.76 per cent) and in the impressive business start-up rate of 57.56 companies for every 10,000 people. Likewise, the most recent data show that business stock levels are 489 per 10,000 people.
Over the past decade, the number of London-based businesses has grown by 33 per cent and more than 750,000 new jobs have been created. Self-employment has grown by 24 per cent since 2010. Other positive indicators involve the performance of small and medium-sized businesses in London. The 2015 Centre for Cities report shows that 13.4 per cent of the capital’s SME’s fall into the high-growth category. Moreover, London has the highest SME density in the country, with 418 SMEs for every 10,000 people.
According to the Centre for Economics and Business Research, London’s economy is set to keep expanding and to grow by a further 15 per cent by 2019. Growth forecasts for 2015 are set at 3.4 per cent.
Key industry sectors in London
London has a diverse industry base where the most important sectors are public services (21.88 per cent), private professional and business services (46.98 per cent), and knowledge-intensive industries (24.3 per cent). More specifically, the industry sectors that contribute the most to the local economy include banking and finance, which account for over 25 per cent of the city’s GVA; technology and creative, which is set to become one of the most prosperous sectors; tourism (and in particular cultural tourism), which employs 13 per cent of the workforce; construction, which generates 260,000 jobs; and retail, which employs nearly half a million people.
Infrastructure
One of the most notable developments in this respect is the London Infrastructure Plan 2050, an initiative created by the Mayor of London that aims to significantly improve public transport capacity, real estate availability, and digital connectivity in the Greater London area. Some of the Plan’s highlights include:
– Increasing public transport capacity by 50 per cent thanks to rail and road network improvements, the delivery of Crossrail, tube station upgrades, and additional river crossings.
– The creation of 575,000 jobs thanks to the redevelopment of brownfield sites in Hounslow, Dagenham, Hackney, Lewisham, Tower Hamlets, and other designated Areas of Opportunity.
– The move towards environmentally sustainable economic growth, with a focus on guaranteeing water and energy supply and creating new business opportunities in the utilities sector.
– Being the first city to roll out 5G technology.
Jobs and skills in London
The Centre for Cities report reveals that approximately 72 per cent of London’s working age population is economically active. Unemployment levels are at their lowest in the past 8 years, and were set at 6.2 per cent in April 2015.
London-based employees have the highest average weekly earnings, with a median of £675/week. In addition, the British capital ranks first in terms of the number of private sector jobs generated, as there are currently more than 4.1 million jobs in this sector. The city has a healthy private-public sector employment ratio of 3.57. According to data published at the latest London Employment survey, the sectors that have experienced the highest jobs growth levels are creative and digital, accounting, business management, legal services, banking, and finance.
London’s skilled workforce continues to attract employers who want to benefit from the city’s ever-growing talent pool. It is estimated that nearly 48 per cent of the local working-age population has an NVQ4 qualification or higher. One out of every two workers have a university degree, and in certain Inner London boroughs, up to 60 per cent of the local workforce is made up by university graduates.
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Sources:
http://www.theguardian.com/public-leaders-network/2015/jan/19/five-stand-out-uk-cities-jobs-business?CMP=share_btn_tw
http://www.theguardian.com/business/2014/may/27/london-economic-growth-to-outstrip-all-other-uk-regions
https://www.london.gov.uk/priorities/business-economy/vision-and-strategy/infrastructure-plan-2050
https://www.thestage.co.uk/news/2015/cultural-tourism-brings-3-2bn-year-london-economy/
http://www.bbc.com/news/election-2015-england-32235911
http://www.thecityuk.com/research/our-work/reports-list/london-employment-survey/