London is a major destination for global businesses to base their headquarters, which are vital to employment, to exports, and to world city status. But we know little about the breadth of London’s global head office employment, and the contribution that head office functions make to prosperity in London and across the UK.
London is a notable member of a group of global cities that are characterised by a high concentration of corporate head offices: 40 per cent of the world’s top corporations chose London as their global or regional headquarters. Some estimates show that the number of head office workers rose by 50,000 between 2004 and 2014, accounting for one tenth of London’s job growth during the decade; anchoring exports, supporting a rich ecosystem of financial, legal and other business advisory services, and contributing to growth and job creation across the UK[1].
But head office functions are changing, with newer start-ups and scale-ups operating more networked systems of management, concentrating production as well as management in urban centres like London.
And London’s position is not assured: chronic problems of affordability, congestion and quality of life undermine the city’s attractiveness. Uncertainty following the vote to leave the EU now compounds London’s challenges, and the statements of corporate CEOs are scrutinised for any hint of their location plans.
This research project considered how London could enhance its position as a global HQ centre:
- What is the breadth of London’s global head office employment?
- What role do head office functions play in London’s and the UK’s prosperity? Are the factors behind locating these functions in London changing?
- Are geographical factors more critical than regulatory factors? And are hard factors (infrastructure, connectivity, talent etc) more critical than soft factors (talent, diversity, culture)? Is London the right place for all types of head office functions?
The project included desk research on head office employment, and interviews with businesses on how they view London’s comparative performance.
[1] GLA, London’s sectors – more detailed jobs data, London datastore, October 2016.