A report released today by the City of London highlights the complex interaction of factors that affect the location decisions of global businesses and their highly-skilled employees.
The ‘Understanding Global Financial Networks’ report, produced by Ipsos MORI, highlights how proximity to clients, quality of business environment (including the stability of tax and regulatory regimes) and availability of skilled talent locally are all central to such decisions.
Based on interviews with 40 high-level financial services professionals – both key decision makers and mobile, highly-skilled employees - working for leading firms such as HSBC, Nomura, DVB Group, Deutsche Bank, KPMG, Clifford Chance, and Lloyds across the globe, this qualitative piece of research examines the various factors that firms and individuals take into account when deciding where they are going to be based.
It also presents an in-depth analysis of how the four leading financial centres - London, New York, Hong Kong and Singapore - are perceived amongst the international business community, looking at their overall reputation and how this has been affected by recent political and economic events.
Stuart Fraser, Policy Chairman at the City of London Corporation, said:
"As a financial centre, London remains the envy of the world – it is certainly the most global centre and, by quite some distance, the one with the greatest international capital flows.
"I know from experience that other financial centres, particularly those in the emerging markets of the Far East, are desperate to replicate this template for success so that they too can attract the top global firms and the top global talent. "But what is it that makes a financial centre attractive?
"With its many natural competitive advantages, London has long been seen as a welcoming business environment but the report suggests that this reputation has come under threat in recent times.
"‘Banker Bashing’, bonus backlashes and a perceived lack of certainty over tax, regulation and immigration have undermined London’s attractiveness to the international business community.
"In an increasingly competitive global marketplace, where capital and talent are highly mobile, it is vital that we pay heed to the way in which location decisions are made so that firms continue to choose to be based in London and continue to provide huge economic benefits for the UK for many years to come.
"But we must also create an environment that will appeal to individuals – a firm’s greatest asset is its workforce and if top performing employees decide they do not want to live in London, then businesses may decide to base themselves elsewhere."
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