London is well positioned to become a global megacity, but it will won’t achieve this status through isolation.
By Jack Peat
Megacities -from an economic perspective – will develop as conglomerations of business hubs with a specialised focus. At the heart of their growth will be interconnectivity, which means that if London is to achieve such a status, it is imperative that it is tied to Europe.
It is unimaginable that London’s status as the financial centre of the world could ever survive independently of the EU. Born from the private financing of the Battle of Waterloo – which eventually ended the political and military career of Napoleon Bonaparte – the rejuvenated city needs allies more than enemies, as it channels funds to the faster-growing emerging countries of Asia, Africa, and Latin America.
The biggest banks and the brightest financiers from France, Italy, Germany and elsewhere now occupy Canary Wharf and the Square Mile and many non-European banks, private equity firms, insurance companies, hedge funds and sovereign wealth funds have also opened their European headquarters in London because they see the City as the launch pad to a bigger EU market of 500 million people. But despite constant warnings from the US president and the major corporates that fuel life in the city, calls to move away from Europe are becoming increasingly populist.
Proposals for London’s £1 billion Royal Docks developments typifies where the city stands in relation to Europe and the rest of the world. The ‘East’ of London is set to be redeveloped into a new business hub for Chinese and Asian firms which want to establish European headquarters, bringing an estimated £20,000 full-time jobs and some £6 billion to the UK economy. It does beg the question, however, of how such a district might function if the UK becomes independent of the rest of the continent.
Mayor Boris Johnson says the development will act as a beacon for eastern investors looking west. Xu Weiping, the chairman of Advanced Business Park (ABP), has outlined a vision to develop a world class international business district which will initially target Asian businesses to help them secure a destination in London. This is all tremendously exciting, but without Europe, it aint’ gunna work!
Tech, finance and globalisation: the three pillars
China is becoming the next global super-economy by promoting internal competition in specialised hubs. Beijing – home to Apple, Twitter, Facebook and Intel – is the equivalent of Silicon Valley, while Shanghai specialises in automotive, Guangzhou Shenzhen in fashion, Hulan in Media, Qingdao in financial services and Chengdu Suzhou in design. For London, the development of similar hub-based firms will cement its position at the centre of the world, bringing with it prosperity and competitiveness.
The ‘Tech Roundabout’ in Hackney and Islington (known as Silicon Roundabout) is our technology hub, attracting investment from Cisco, Facebook, Google, Intel, McKinsey and Vodafone.The City is already home to commercial banks, and the HSBC tower in Canary Wharf can be seen for miles, standing among J.P Morgan, Swiss Bank and many others. The latest development in the Royal Docks now provides grounding upon which Asian businesses can develop a European presence, which will create a virtuous cycle of investment from global businesses.
But we mustn’t get carried away with what Britain has to offer. We no longer produce things and our consumer economy is modest stood alone. For all these great expansions to work, the glue that is Europe must tie them together.