Blog Post

The relationship engine: Why central London should recover

By Rob Whitehead, Director of Strategic Projects, Centre for London

London is facing uncertainty in the face of a challenge with no modern-day equivalent, but looking closely at the historic ingredients of the city’s success suggests some areas for optimism. The city’s prosperity and growth have always been driven by two essential factors: protecting its citizens and fostering high-quality relationships.

Together, these drive business success, public sector innovation, social support, resilience, and happiness. London can beat off the threat of an economy largely transacted online if it can re-invigorate itself as an engine of great relationships and prosperity. But when the clock stops ticking, sometimes it helps to dismantle it.

We should unpack the elements of London’s success and test what still holds in our likely future, and what might change. What are the essential things that make London, and central London in particular, still useful?

Relationships underpin London’s history

When London was founded as a trading settlement two millennia ago it prospered because somehow its denizens found a ready mix of protection against threats and openness to newcomers, creating a thriving trade entrepot, and eventually a major seat of political power.

Relationships flourished, multiplied, and strengthened. New ideas sprang forth. Institutions emerged and evolved, both to stoke and manage the city’s dynamism, such as building new bridges and to protect and educate its citizens. London’s pubs and coffee houses played no small role in making the city a brilliant place to network, spin up new ideas, socialise and find romance. And London’s shops and entertainment drew in visitors from outside the city. Financial industries sprang up, in insurance, and capital. The national legal and political system found its locus in the city. And the media industry followed.

Sky Garden, London (Credit: Daria Shevtsova) Daria Shevtsova

Over time London became the largest and most prosperous settlement on the planet. The city may have lost that crown long ago, but its physical density, wide labour pool, extensive transport network, stable legal and regulatory environment, language, time zone, and international population and networks have combined to keep central London amongst the most economically productive places on earth.

Coronavirus, the rapid adoption of online working tools that it provoked, Brexit, and the government’s drive to ‘level up’ the country are now sowing major doubts about London’s prospects. Homeworking has drawn questions about the need to be in city centres. Why tolerate the commutes and the costs of office life? The devastation of the airline industry and the realistic prospect that it will not recover to previous levels in the medium term compounds economic pessimism.

As the restrictions ease the new normal is emerging. Major firms, like Apple, are declaring their cards and ‘hybridity’ in some guise seems triumphant. But alongside this, many large businesses still seem ready to continue investing substantially in the value a central London location brings. In a world where much work can be done from anywhere, what drives these firms to bet at least some of their future on places at all? And what might this mean for London’s city centre?

The value of human contact

The clearest answer, superficially at least, is that they value physical human contact. Contact fosters relationships. And relationships are the stuff our economic, social, and even environmental gains are made from. The wellspring of human ingenuity and teamwork comes from our relationships with one another. Creating and developing relationships online can work. It’s cheaper for one thing; there’s no travel time, and it’s less carbon-intensive. It can level the playing field too for those for whom travel is more difficult or impossible. Staying home is a fillip to many with caring responsibilities, and to the local economy, with more pounds spent in local shops and cafes. It’s pretty easy to develop loose bonds too and to be strategic about who we spend our time talking to.

But, as many have gauged during the pandemic, online life has huge drawbacks. Science can help to explain some of the advantages of in-person, physical relationships. Collectively they can add up to plenty of reasons to bear the costs of commuting to be able to work in the same place as your colleagues.

We communicate more richly when touch is an option. Touch helps build friendships and other deep bonds, by triggering neurological and physiological responses. Facial and other physical cues help us understand and empathise. And conversation is much easier without the digital pauses and mishears endemic to video meetings. Interruptions, for example, a key part of any conversation, just work better in person. Perhaps most importantly, we operate as groups and teams more effectively in person. Amongst groups in the same place, there are rich layers of peripheral information exchanges, glances, movements, noises. Through this, we build our understanding, rapport and capabilities, and we also build our resilience, by sharing experiences, good times (contrast how laughing together feels online) and challenging times. We are better at understanding complexity together as we throw in perspectives and secondary information, and so we make better decisions.

Groups generates better ideas

This partly explains why groups generate better ideas. The Swedes know this. In Sweden, a culture of collaborative songwriting has led them to export more pop music per capita than any other country. Academics know this too. Papers with multiple authors beat single author research for producing a successful paper by some margin. Finally, online life fails miserably at generating the serendipity and randomness caused by the bump and mingle of physical contact. It’s great for disappearing down a particular niche (or rabbit hole) of interest. But the physical world delivers scores of random stimuli that might just seed the next idea, relationship, or inspiration. It’s one of the reasons why businesses cluster together – think Silicon Valley or London’s Hatton Garden where our own office is. Dense networks of suppliers, customers and institutions, and other apparently unrelated stimuli deliver benefits that trump the downsides of competition. And, it looks likely, the commute.

Hatton Garden, London (Credit: Can Pac Swire, Adapted to Black and White) Can Pac Swire, Adapted to Black and White

It looks plausible that the 30 year period in which London’s growth and prosperity were largely driven by a trifecta of a) opening up to Europe and the world, creating larger markets for goods, services, capital and labour, b) a turbo-charged housing market and c) large scale government investment, is coming to an end, in part because there were too many losers. Many on lower incomes felt squeezed by increased labour market competition, capital accumulated to the wealthy and a pinch on real incomes followed the 2008 banking crisis. Yet London became seen to be a winner, at the cost of the rest of the UK. So, we need new perspectives that help drive improvements in our wellbeing, our prosperity, and our environment, with the costs and the gains spread more fairly both within London and across the country.

Strong relationships will help us tackle the big issues, like climate change

Focussing on and accelerating the conditions in our city for more and better connections and relationships for all should help, particularly as we tackle the major challenges, like climate change. These conditions could include a wide range of aspects; more high quality and accessible public places (for meetings, dates, fitness, play), better support for family life, new institutions to tend and stimulate the business environment. And to ensure more of us can participate, and fewer people fall through the cracks we need better support for the most vulnerable, and for all of us, against external threats. This new endogenous focus, on connections and protections, done right, would unlock our ingenuity, generate new ideas, new businesses, new and improved institutions, stoking innovation across the private, public, and voluntary sectors.

What would that city look and feel like? Picture a London where citizens are better protected from violence, prejudice, environmental degradation, poverty, institutional stagnation, and avoidable ill-health. Then make it a place where the best and latest approaches are developed and harnessed, making it, perpetually perhaps, a brilliant place for research, invention, learning, networking, trading, romance, culture, family life, environmental stewardship, and fun. This will be truest in central London, where the transport network and the cluster of offices, venue, restaurants, clubs, museums, and so much more combine to deliver almost limitless possibilities.

So, yes, many businesses may bet that flexible and hybrid working will get them the best returns from their staff. But they will also bet on the days in central London being fun, ingenious, and productive. Space opened up by those not in London every day will be taken up, over time, by others looking to tap into the magic of the capital.

A famous clock (actually a bell) Big Ben often symbolises our great city. Perhaps it’s just a coincidence that it has been hidden for repair over the last few years. But as we carefully put it back together, we can have confidence that its mechanics remain sound, a little better understood, and its chimes just as resonant as ever.

Take a look at our other London ideas pieces

Rob is Director of Strategic Projects at Centre for London. He rejoined the Centre in 2020, having helped to found it in 2011. Rob leads our London Futures work and on environment and transport. He has co-authored publications on London’s future, education and cluster policy. Before joining Centre for London, Rob was Director of Knowledge at Future Cities Catapult. He has also previously worked at the United Nations agency International Trade Centre, and the London Development Agency.