Introduction
London, a global city in the world-class league, faces various opportunities and off course, goes through multiple challenges that are common in almost all cities across the globe. In essence, efforts and strategies have been adopted to maintain the status of London globally. Its Central Business district, Canary Wharf, is the headquarters and the home to business and capital’s core activities, for example, the world-renowned leisure and retail functions. London’s business district employs more than one million people from all corners of the world and its also a home for more than 300, 000 residents. The city is a celebrated center for museums, theatres, cinemas and other cultures. Besides, the city has distinct economic geography comprising of different quarters and concentrations, such as the legal firms, financial districts, higher education institutions, creative and retail industries. The paper will assess the efforts to maintain the global city status of London.
The city of London holds a very significant market share in the traded financial services internationally, being a home for the London insurance market and the International bond market. For the last decade, London has strengthened the commercial centers, thereby maximizing their share, improving, and developing the hedge fund market (Sassen, 2011, p.34). The city also holds legal, consultancy, and accounting firms alongside its financial sector with a distinct concentration in the West End and around the City of London (Travers, 2003, p.439). The business and financial services of London account for close to 780, 000 employment opportunities and jobs where half of the posts are based within the London Central Business District.
The retail sector of West End is everywhere around the United Kingdom, therefore, making London a major attraction site to the shoppers from not only the UK but also across the world. Also, the range of museums, galleries, and theatres, which are worldly known, are the key elements of the tourist capital offer, which significantly generates income from the exports. The agglomeration of the specialization such as knowledge and skills, markets and inputs in the central areas of London encourages innovation and growth. In real sense, it enhances competitive advantage, especially for the business centers located with the CBD. The “cross-pollination” of thoughts and ideas that occurs between the interrelated business operations and activities in London enhances further strengthening and diversification of its economic base (Travers, 2003, p.439). The diversification has been demonstrated, especially in London’s rapid growth of the creative sectors and financial product developments, for example, the derivates.
The agglomeration, innovation, and competition process have somewhat led to ‘type’ activities, especially in central London, leading to a geographic change of London’s CBD overtime. The Canary Wharf City of London has changed, although there are other changes in Camden, riverside Southwark, and Paddington. The areas have now changed to the status of CBD due to the nature of activities and infrastructural improvements. Also, continued economic development in London and opening up of the markets internationally with opportunities and globalization has led to the development of other countries, for example, China and India. It means that there is a need for the leadership and the governance of London to address the Chinese weakness such as financial systems that would suggest various opportunities for the economic consultants and the law firms to offer various advice on the financial architecture and regulatory reforms (Travers, 2003, p.439) Investment needs in India offer opportunities to the financial sectors in London. London’s reputation and position offer it with advantages and opportunities such as those of finance and law, making it a world-class performing business, financial and cooperate services.
Economic Geography
The economy of the CBD is different from the other cities of London due to prominence and the nature of the business activities in the area. London’s central area covers an approximate area of 8 square meters from the Kensington city to Aldgate. In the city, it is easy to identify the concentration of district activities, for example, investment banks, central government departments, office museums and the headquarter embassies of lawyers. The business and the financial headquarters internationally, are predominantly in the Canary Wharf, and the city of London with city type activities, concentrating on the office activities proportion especially in Camden and Westminister (Inwood, 2005, p.234). At the same time, the property and real estate services and operations are centered on Marylebone and Mayfair. Matching the demand and supply for investment across the globe and offering the contractual funds for the assessment of the appropriate venture riskiness have been the main objectivities and functions of the city of London (Sassen, 2011, p.34). The business activities correlation in London tends to be the most synonymous with economic and financial services in the center of the city and, more recently, in the Canary Wharf. Additionally, the financial employments and jobs spread out to other areas beyond the London city to Shoreditch and Hoxton.
London is somewhat unique due to its linkages to the business and financial cities
compared to the UK, although it tends to compete for financial resources and services with the city of the UK. Additionally, while some of the cities such as Manchester and Leeds tend to have some of the most significant business and financial services London sectors of finance are oriented towards the retail trade and not the wholesale trade Hunt, 2004, p.340). The central business district of London encounters the United Kingdom’s overwhelming export share while the business activities look to Tokyo, Parish, and New York, and other alternative UK locations. The city of London holds a paramount market share especially in trading and financial services becoming the home of the bond Market across the globe. For the last one-decade, London has increased its foreign exchange and bank lending turnover taking the advantage of the expanding hedge fund accounts and activities. According to the comparison of the financial centers with that of London the city financial status is far much ahead. Also, London has captured the largest market share improving the hedge fund sector, although New York city has been the biggest industry in hedge fund management.
Insurance
The insurance industry of the United Kingdom is one of the largest across the world after that of Japan and the United States. The city accounts for not less than 15% of the overall exports in all the financial departments and services. The market of London according to the statistics tends to be one of the oldest financial market across the world. It is somewhat different from the other insurance sectors in the United Kingdom since it offers a high-risk business marketplace such as aviation and shipping, which is not usually available in the local markets (Hunt, 2004, p.340).The city of London employs more than 40,000 people in the London market where another 10000 are in connection to other business activities in the other parts of the country, accounting for more than 20 percent of the total number of people employed in the insurance industry in the United Kingdom.
The London market shares around 30 percent of its industrial insurance, making the city one of the world’s leading reinsurance and traded insurance internationally. According to the 2005 London market gross premiums, it was estimated that more than $28billion more was realized in the London’s market that was nearly double that of 1999 level (Massey, 2007, p.532). The headquarters and the offices of insurance and reinsurance companies are located in London. The city’s close contacts of brokers, buyers and underwriters and the support services facilitates its regular trust and contacts. The fact is significant, especially for the insurance industry, since the risks are complex, making the information sharing between the actors more efficient (Derudder et al., 2012,p. 28) The market of the London city clearly demonstrates proximity benefits and working city whose services are more efficient and paramount especially in insurance and reinsurance.
World service center
Auditing and assurance activities, tax insolvency and corporate finance assurance and audit firms are all significance in the city of London. However, the wealth management and other significance activities are highly demanded in the city of London and have received a global scale (Sassen, 2011, p.34). The accounting firms in London works closely with the multinational corporations, legal firms, banks and the software suppliers. Most of these business organizations are clustered in the West End city since its close to the high valued and corporate clients within an easy reach of institutions of finance in the London city. The Westminster and the city of London employs more than 29000 employees for the last two years, making around 14 percent of the total employment in the United Kingdom (Campkin, 2013,p.45). Therefore, the management of the United Kingdom, and particularly in London, should expand the global market in the provision of accounting services, increasing the net exports. It should improve the acquisitions, consultancy, and mergers, which in turn demands other legal services. Since London is capable and is offering some of these services, it has been the determiner of the United Kingdom’s expansion, especially in accountancy.
Legal Services
London is well known for its leadership in the provision of legal services especially in the international services leading to rapid growth across the globe. London’s legal laws are typically clustered between West End and London close to the justices and court centers where the international law firms focus on supplying various services to the London financial institutions. For the last five years, there has been an influx of the law firm in the United States taking advantage of new European markets and the growth of cross -border mergers. The best law firms are located in the city of London, generating a huge amount of revenue in the United Kingdom and the London estates (Curtis, 2016, p.35). The corporate firms in the city form a paramount international law business proportion in the acquisitions, exchange listing securitization, private partnership, banking, and corporate restructuring. Some of the legal firms are located close to the financial departments and institutions since they may require services structuring M&A deals, and banking transactions (Travers, 2003, p.439) Since some of these services are generally expensive, the leadership of the London city has located numerous clients to enhance reduced cost of the legal services. By doing so, the financial institutions will benefit since they will be able to source specialized and cost-effective services.
Consultancy
The consultancy management is one of the rapid and expanding business service that relate and is similar to the accountancy since it encompasses various ranges of business activities. Consultancy involves information technology, and outsourcing, accounting for more than the three-quarter of London’s income fee according to the 2019 statistics. Since the core business organization assists other firms, the consultancy managers prefer the central business district of London for them to maintain regular contact with the business clients promoting business relationships (Clark, 2015, p. 230). In the city, the departments and business consultancies employs more than 28,000 workers that are predominantly clustered in the City Fridge and West end ,Canary Wharf and Square mile. Significantly, the CBD functions for example banking, exchanges and insurance feeds numerous business organizations improving the economy of London.
Retail in Central London
The Covent Garden and West End are the two centers of retail trade in the United Kingdom in terms of turnover and floor space. These two centers attract several visitors from all over the world. The reputation of the centers is built on the quality of goods, departmental stores and shops. According to the statistics, approximately 40 000 people work in the retail centers where another approximate of the same population tends to deal with the restaurant and establishment of licenses (Clark, 2015, p. 230). The two centers host not Less than 6 million retail square feet compared to the floorspace. The city contributes a total of 6 billion dollars in the comparison of goods. The central London retail is somewhat unique both in terms of size, and also, it’s international standing where almost one-quarter of the shoppers come from overseas. The fact contributes to London’s and United Kingdom total income. Typically, the spending of the visitor’s tends to be higher in the united states compared to Europe, but some of the other markets are significant to the retailers in the West end city.
The city plays a significant role, in that it acts as the bridgehead for the retailers internationally. Furthermore, the locations of these two cities combine shopping and leisure activities and facilities that are not available in other shopping centers in London. However, the white city and Stratford, one of the closest cities to the CBD, have led to increased competition (Brenner & Keil 2005, p.109). Therefore, London should respond to the fact by building and addressing the unique features and the issues that tend to affect the experience of shopping, for example, congestion negatively and public space to effectively maintain the good reputation of London city and its global economy.
Leisure and Tourism
The concentration of tourists and visitors in London attracted by entertainment, shopping, restaurants, and bars has led to numerous visitors, especially in the CBD. The tourists from overseas and other parts of the United Kingdom, the residents of London, have generated substantial finances, employment, and wealth, especially in central London. According to the economic statistics and estimates, the tourist supports more than 50,000 employments and jobs, particularly in Westminster city and 13,000 jobs further in London city, where the visitors in the market are the key determinants of the market (Ackroyd, 2000, p. 34). According to the LDA’s, the tourism model disaggregating official tourism statistics of London city shows that Westminster is the key recipient of tourism spending and visits to the city. The estimates also shows that the city have been benefiting from the from tourism spending which most of the income comes from the overseas visitors.
However, the city of London has fewer tourist attractions, although it’s the world’s commercial center making it an attractive business center for the visitors where they enjoy shopping, restaurants and bars. Also, other visitors’ attractions, such as entertainment, venues, and museum, mostly influences heritage and history. In short, there has been an increasing trend in the number of tourists and visitors in the United Kingdom and specifically London (Sassen, 2011, p.34). The central interaction and tourism in London are significant in creating employment and generating wealth. To maintain the tourist feature, employment and wealth, they have been increased emerging markets to enhance increased attraction of tourist from every corner of the world helping London to succeed rapidly in the global changing markets continually.
Conclusion
The presence of business and finance services in London city encompasses leisure, culture retail, and the government. The London’s central business district is one part that contributes to wealth and financial resources in the economy of London. The city comprises not less than 2 million people working in the town while others reside outside the boundaries of the CBD. The progressive globalization and the opening up of various markets in the city of London have increased opportunities for its business people, especially in finance supply and sale of most essential and professional services such as banking. Besides, the dynamic nature of London and particularly in the CBD, has led to increased employment concentration leading to good innovation and a cycle of growth. London’s financial innovation has also assisted its growth, tourism and leisure.
