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Why Is London So Important?

London is a global city. A global city is not just important nationwide, but also on the international scene.

By Anton BlackPublished 4 years ago 4 min read
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Why Is London So Important?
Photo by Emmanuel on Unsplash

London is, along with New York, one of the world's largest financial centres.

Much of London's financial sector is located on the longstanding business hub, the "Square Mile" or the "City."

Most international business headquarters are based in london, as are the major British firms. London has the world's second-best air connexions after Dubai.

London accounts for around 22 per cent of UK GDP, although it accounts for only 12.5 per cent of UK population.

The green space covers 47 per cent of the area. Recently, Thanks to its ambitious urban programme, London became the world’s first National Park City.

Many cities, like Brasília and Washington, are their country's political centres but not the business and financial centres.

In other cases, such as Istanbul and Milan, the reverse is true.

London plays both roles.

London influences and moulds the country and it forms part in a way that only Moscow and Paris, among major European capitals, come near to matching. But London's importance to Britain, Europe and the world stretches much further. More than in any other city in Europe, London life is seamlessly knitted into the global economy, global population flows and global culture.

This has both benefits and drawbacks.

On the positive side, London creates much of the wealth that serves to shield and boost living standards in other parts of Britain. The British-based independent forecaster, the Centre for Economics and Business Research, recorded London economic growth in 2014 was 3.8 per cent, accounting for almost a third of Britain's entire economic expansion. By 2018 the capital's output was 16 per cent higher than it was before the financial crash of 2008.

By Benjamin Davies on Unsplash

On the other hand, the dominance of London means other British cities, once great imperial commercial and industrial centres like Birmingham, Bristol and Liverpool, struggle to emerge from the shadow of the capital.

In Germany, where Berlin is the political nerve centre of the nation, this is not true. Frankfurt is the country's financial capital, Hamburg is the media capital, and other cities like Düsseldorf and Munich compete for as rival business hubs with Berlin. Nor is it so in Italy, where the glorious cultural heritage and local identities of Florence, Naples and Venice place them in importance beside and not below Rome.

London's key position to British economic growth and its position as the nation 's main gateway to trade and investment will not change in the foreseeable future.

But this will present politicians with great challenges and opportunities in transport, education, and housing.

The long old argument over the construction of a new airport for London or just adding a third runway at Heathrow is a sound example.

Other cities such as Berlin, Istanbul, Milan and Moscow have reacted to the growth in international demand for trade and recreation travel either by improving old airports or by making plans for new ones. British politicians recognise that fresh investment in airport capacity is vital to the future of London, but they always seem unable to decide which option to take.

The cost of a new airport will run to tens of billions of pounds, plus the necessary transport links to London. In a nation whose public finances are strained and that already spends very significant amounts in modernising the creaking overground and underground rail networks of the capital, it would be an expensive option.

The task is to maintain London's reputation for quality in education and housing, while not crowding out Britons.

Americans, Arabs, Chinese and Russians, but also French, Germans, Italians and Scandinavians, want their kids to study at top-ranked schools and universities.

The richest live in their beautiful properties in Kensington, Mayfair and at Tower Bridge. But the impact was significant on Londoners. Non-British students now number more than one in two at the London School of Economics, one in three at University College London, and fewer but still significant numbers at the finest private schools like St Paul's and Westminster. This pattern is driven by high tuition fees and housing costs which are not easily accessible for many British families.

One Tower Bridge, London

Meanwhile, London house prices are booming.

Particularly in the most exclusive districts, thanks to what seems to be an insatiable appetite of the world's wealthiest people for a property in the British capital.

On the website of Berkeley Homes, the developers who built One Tower Bridge, a luxury complex opened in 2014, customers are wooed in Arabic, Chinese, Russian and Turkish, French, Hindi, as well as English.

In certain respects, high housing and living costs are the price Londoners pay to host one of the biggest financial industries in the world and show an open attitude to globalisation in all its forms, including foreign investment. The beneficial effects are significant, as shown in a study by Startup Genome, a private-sector venture that explored for the most desirable locations for innovative entrepreneurship worldwide.

Silicon Valley was top of the list. Then came Tel Aviv, Los Angeles, Seattle, Boston, New York and London. The only other European cities in the top twenty were Paris, Moscow and Berlin, each far below the UK capital. In terms of political weight, Berlin is nowadays the most important EU capital. But as long as Frankfurt remains Germany's financial centre, it won't match London as a business and finance hub.

London will likely face fierce competition from rising cities like Dubai, Shanghai and Singapore over the medium term than from Europe.

New York and Tokyo continue to be alive and strong.

To stay at the centre of the global economy, London will have to keep raising its game.

opinion
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About the Creator

Anton Black

I write about politics, society and the city where I live: London in the UK.

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  • Dharrsheena Raja Segarran2 years ago

    This was an interesting and informative read. Thank you so much for sharing

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