London is already a global economic superpower, home to over one-third of all European Fortune 500 companies, hosting three times more corporate headquarters than any other city in Europe. A recent report by London First in association with EY concluded that London’s 24-hour economy could be worth nearly £30 billion a year to the capital by the start of 2030. Yet some other European cities have arguably done much better than London in moving towards a 24‑hour economy.

Currently, the night-time economy in London is worth up to £26.3 billion annually, around 8 per cent of the capital’s gross domestic product, directly supporting one in eight jobs or 723,000 workers. Our report suggests there could be an additional 66,000 jobs in less than 15 years, providing a welcome boost at a time of economic uncertainty following Brexit. In terms of the wider UK, London represents 40 per cent of the estimated £66 billion value of the country’s night-time economy, making the overall contribution of London’s night-time activity just over £40 billion when multiplier impacts are included.

This summer, London took two important steps to address the need to develop a 24-hour economy: the creation of a Night Czar role and the launch of the 24-hour Tube.

It’s not only about parties

London’s restaurants, bars, clubs and culture are among the best in the world and an essential part of the city’s appeal, both to residents and to the 31.5 million people who visited the city in 2015, including 18.6 million from overseas. But late-night leisure businesses – what we typically think of as nightlife – are only part of the story. From accommodation to film and broadcasting, arts to technology, many industries drive London’s economic growth at night as well as during the day.

Admittedly, a large number of night-time economy jobs are in bars, clubs, shows and hotels: more than a quarter (25.9 per cent) of people employed in London’s accommodation and food services sector and more than one in five (22.4 per cent) employed in arts, entertainment and recreation usually work at night. Yet 37.2 per cent of employees in transport and storage also work nights, representing 107,136 jobs. Increasingly, substantial numbers of engineers, security staff and shopkeepers, nurses, cleaners and cab drivers, IT support experts, administrators and artists are all working at night.

There are more night jobs in health and social work (101,282) than in accommodation and food services (97,125) or arts, entertainment and recreation (46,592). Some 65,150 people work nights in admin and support services; 59,803 in professional, scientific and technical jobs; 59,243 in wholesale, retail and repair; 54,558 in information and communications; and 45,342 in public administration and defence.

Illustration by Lucinda Rogers

The importance of taking a broad view of the 24-hour economy is clear when we come to look at each sector’s economic impact. There is some uncertainty over night workers’ economic output and, therefore, over their Gross Value Added (GVA) contribution. But it seems likely that the GVA of a range of sectors equals or outweighs even the £1.38 billion estimated for accommodation and food services. These sectors include transport, health, and professional and scientific jobs, along with a range of smaller employers that punch above their weight in terms of economic output – finance, insurance and real estate, for example.

We should not overlook the knock-on effects on the rest of the economy from income spent on goods and services and supplies to 24-hour businesses. These multiplier effects account for another 536,100 jobs (mostly in the daytime economy), making the night-time economy responsible for 1.26 million jobs in London, and accounting, directly and indirectly, for £40.1bn, or 12 per cent of the city’s total GDP.

A virtuous circle

More than 100,000 people reportedly used the Night Tube on its first weekend. Following its successful launch on the Central and Victoria Lines, Night Tube services have also started on Jubilee lines earlier than scheduled, and will be introduced on the Northern and Piccadilly lines before the end of 2016.

The Night Tube is already encouraging London’s museums, galleries, restaurants, gyms and theatres to experiment with late opening and events, creating additional jobs and revenue as well as enabling people to attend events and enjoy experiences they might previously have missed. As late-night travel becomes increasingly understood to be a pleasant experience – less crowded, but not unsafe – then more venues will be tempted to open late, creating a virtuous circle of additional jobs and revenue for the London economy, and a more efficient use of an increasingly scarce, congested resource – our public transport system.

There is also much that we can learn from other 24-hour cities, including New York, Berlin and Amsterdam – a process that has already started following the first ever International Night Mayor summit in April.

Looking at what Night Mayors have done around the world, it is clear that there are social and cultural issues that need to be addressed as the demand for a night-time economy grows. London First and EY are working with the city of Melbourne, which, in January, brought in all-night trains and trams, late-night buses and a 2am coach service to key regional centres on Fridays and Saturdays. Community and customer feedback will be a key element in assessing the success of the trial.

A 24-hour economy will increase London’s appeal to the many overseas businesses that regard London as the most attractive city in Europe for foreign direct investment (FDI). EY’s last annual UK Attractiveness Survey (2015), monitoring FDI across the globe, revealed that London has led in Europe ever since the survey began in 1997. If the 2016 survey shows a weakening due to Brexit, there will be even more reason to look to the 24-hour economy as a way of countering uncertainty.

More is needed

The extension of Tube services through the night provides benefits and opportunities for businesses large and small, but must form part of a wider strategy to support the development of the 24-hour economy. Londoners are working longer and later and the Night Tube should be seen as an early step towards showing the world that London is open for business, whatever the hour.

Support from all the London boroughs and the Greater London Authority will be crucial in enabling London to capitalise on its potential as a 24-hour city. The establishment of a Night Time Commission and the appointment of a Night Czar emphasise the importance being placed upon London’s night-time economy by City Hall. Early evidence suggests that outer boroughs can benefit from the 24‑hour economy as much as inner boroughs; local leaders will need to work with the Night Czar to bring additional jobs and revenues into their area.

London needs its first Night Czar to be someone who can act as a champion for the night-time economy and help deliver a vision for London as a 24-hour city, working with local authorities, the Metropolitan Police and Transport for London, as well as with businesses and residents, to manage and mediate between the various competing interests.

While it is tempting to regard the 24-hour economy as being mainly comprised of leisure and nightlife, our research shows the importance of less immediately apparent activities, for example in the fields of freight and transport. The next phase of EY’s work will be to make recommendations regarding these industries, which will form part of the Night Time Commission’s final report, and, in turn, inform the priorities of the Night Czar. Our focus will be on potential solutions to a number of current issues in the freight sector, such as the impact of moving freight outside of peak hours in order to relieve congestion, the implications of this for storage and distribution facilities and the need to review outdated freight management systems.

At a time when the capital’s growth is clouded by economic uncertainty, we need to shift the discussion away from noise and anti-social behaviour and towards an appreciation of how businesses can provide more jobs and services in the night-time economy, ensuring that London continues to compete globally as an attractive destination for foreign investment.

Recent research shows that journey times by car across London are now slower than ever, by some estimates an average of 4mph. The increased traffic on London’s roads is not caused by private cars: very few people drive into the centre of the city. But evidence shows that the number of light goods vehicles is rising sharply, possibly because of the tendency for people to have personal parcels delivered to their place of work in central London.

Can technology solve this problem and enable parcels to be delivered to homes during the night instead? The Night Czar could be the person to examine how London solves the problem with a 21st-century solution.

London is arguably playing catchup with some of our international competitors in its support for the night-time economy. If we are to realise the full potential of a 24-hour city, the Night Tube must be just the start. The real prize that we should be working towards is an additional £2 billion boost to London as its 24-hour economy matures over the next fifteen years.