The Economist just ran a special report on London, which you can view over at their site. Their conclusion is that London is doing very well, but there are clouds on the horizon.
In a piece called “On a High” they write:
In 1986 the Big Bang, which deregulated the City’s financial services, set off a spate of growth that restored London to its place as one of the world’s great financial centres. Growth drew in foreigners, who have arrived in ever larger numbers, bringing money (sometimes), skills (often) and a willingness to work harder than the natives (usually).
Some come for jobs, some for sanctuary, some for fun. London has a creative buzz that makes it feel more like New York than Paris or Rome. It may be the result of the density of art colleges or the mildly anarchic street culture, but it has been heightened by the arrival of young foreigners escaping more conventional or oppressive societies, and coming to find themselves and each other. The art world, where language is no barrier to communication, is flourishing as never before.
But London is not just a bunch of impressive numbers; it is also an astonishing human artefact. A city that a generation ago was on the skids has become a place where the world meets to study, work, create, invent, make friends and fall in love. It is Britain’s economic and cultural powerhouse, Europe’s only properly global city and a magnet for rich and poor, from anywhere and everywhere. Londoners know they are living through something extraordinary. Many novelists have tried to capture the sense of heightened experience that comes from living at the centre of the world—John Lanchester in “Capital”, Sebastian Faulks in “A Week in December”, Oliver Harris in “The Hollow Man”, for instance—with varying degrees of success. The uneasy excitement that pervades the city is hard to bottle.
There’s much more, including the much greater wealth of the London region as compared to the rest of the UK, and the resulting subsidies that London exports every year.
Before continuing with the Economist report, I want to splice in an Atlantic Cities article from Richard Florida called “The Secret to London’s Tech Boom.” This is a review of a report called “A Tale of Tech City: The Future of Inner East London’s Digital Economy.” East London’s “Silicon Roundabout” neighborhood now supports 3,200 digital firms with 48,000 jobs. This is another example of how the world’s top global cities are finding success adding tech hub to their repertoire, often by drawing on the unique global city functional domain knowledge that they already host.
Back to the Economist, in a piece called “Global or Bust” they look at several challenges the city faces, most especially an increasing disconnect from the rest of the country:
Britain depends on London’s prosperity; but, as London has got richer, so its distance from its hinterland has grown. It has more foreigners, wealth, poverty, diversity, disruption and excitement than the rest of Britain or the European mainland. It is an adventurous, outward-looking place, tugging at its moorings between an inward-looking country and a troubled continent.
Among the risks of this are that some economic activity is forcibly relocated to less prosperous areas under some vaguely wages fund like view of economic activity:
The misapprehension that lay behind those decentralisation policies—that there is a fixed amount of economic activity in the country that can be shunted around without affecting its level—has proved persistent. It is evident in the decision to ship parts of the BBC from London to Salford, in north-west England. The BBC has benefited from being part of the broadcasting cluster in London, and that cluster in turn benefits from the BBC’s presence. Both will suffer from the move, though the BBC will probably feel it more.
And polices that attack the base of London’s success:
But the greatest danger comes from policies directed against various bêtes noires which are overrepresented in London. Three groups of people are particularly unpopular in Britain at the moment—rich people, bankers and immigrants. Since London depends on them for its prosperity, policies aimed at making life harder for them will hit the capital.
Transport is also an issue, as this article notes.
There is also a short presentation accompanying this series that I’m embedding below. If it doesn’t display, which it won’t in Google Reader, click here.
There are even more articles I didn’t link so be sure to check the whole thing out.
h/t Paul Roales