More people are employed in high-skill, knowledge-based sectors in London than any other city in the world, according to a study by Deloitte. The report, Globaltown: Winning London’s crucial battle for talent, found that London is the largest employer in 12 of 22 high-skill sectors*, such as retail and investment banking, legal services and digital media. New York was second, employing the most people in seven of these sectors, with Los Angeles leading the way in two sectors and San Francisco the other.
In total, close to 1.5 million people are employed in London across these 22 sectors, compared to 1.2 million in New York, 784,000 in Los Angeles, 630,000 in Hong Kong and 425,000 in Boston. Deloitte analysis shows that for every job created in these sectors in London, a further two positions are formed in sectors including transport, retail, facilities maintenance, healthcare and law enforcement.
Angus Knowles-Cutler, London senior partner at Deloitte, said: “This study demonstrates London’s power in the global economy. It is a desirable and diverse city in which to work, allowing it to attract the very best of British and international talent. Indeed, our city’s high-skill talent might be one of our greatest invisible exports. But this will not last forever without renewal and regeneration. London has to address a number of fundamental challenges, for example, in infrastructure, housing and immigration, if we are to retain our lure as a destination for the world’s top talent.”
Kit Malthouse, deputy mayor for business and enterprise at the Greater London Authority (GLA), said: “Great cities rise and fall by attracting – or failing to attract – talented, skilled people. London has long been a magnet for talented individuals and has also nurtured native-born talent through the excellence of its universities, colleges and on-the-job opportunities. However, we cannot take its continuing eminence for granted. The global economy is dynamic, and we have to constantly refresh and adapt our workforce’s skills in order to remain competitive.”
Despite undoubted challenges, the report suggests a positive outlook for London. Deloitte predicts a minimum net growth of 300,000 jobs in the city by 2020, of which at least a third will be in high-skill sectors. Our forecasts suggest there will be some rebalancing in the employment profile of the city over this period.
Knowles-Cutler said: “London is unique in the breadth and depth of these high value sectors and our research shows that the city’s economy is diversifying. We expect to see strong growth in creative digital and media businesses which will more than compensate for the decline in financial services. This signals that London is moving towards a more balanced economy by 2020.”
Preserving and enhancing London’s position as a global leader will require a number of challenges to be tackled. These include identifying which skills will be in demand and when, whether our universities and other educational institutions will be able to cope with more students, as well as how we deal with increased housing, transport and infrastructure demands and resolve the debate over visa and work permit issues.
In response to these challenges and to protect and enhance London’s leading position, Deloitte has five recommendations:
1- Appoint a chief talent officer (CTO) with a strong mandate for London, tasked with setting and delivering London’s talent strategy;
2- Anticipate growing pressures on infrastructure and housing. The city needs to shake off its image as a place where affordable housing is hard to find;
3- Strengthen business links with education. Education is a vital “feed” for the skills-hungry businesses in which London is pre-eminent;
4- Develop London’s talent, working with the rest of the UK. London makes a major economic contribution to the country with many London-based businesses employing large numbers of people elsewhere in the UK. There is a strong symbiosis between the city and the regions, which should be fully exploited;
5- Implementing an intelligent visa system. The constraints of the visa system place unwarranted pressure on organisations, especially smaller businesses, which rely on specialist talent and skills from overseas countries to grow.
Malthouse said: “I cannot pretend that we in London are getting everything right. There are gaps in the workforce’s skills set, and the Mayor and I are working hard, with Government and the private sector, to address these. This is why I particularly welcome this research by Deloitte, which shows us what we are getting right and what specific areas need greater attention. I am also pleased that the report shows that London is well-placed to remain a city with global influence in the 21st century and beyond.”
Knowles-Cutler said: “London is a global city, made up of global people and functioning on a global stage. Unless we address the needs to maintain our stand as the world’s leading city, we will lose vital people to other cities who are willing and able to accept them.”
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