London's hegemony as the business capital of Europe was laid bare today, with new data showing 40% of the world’s biggest companies choose to base themselves in the UK capital rather than elsewhere in the continent.
Two in five of the 250 largest companies in the world with a main or European headquarters have it in London, according to a study by Deloitte seen exclusively by the London Evening Standard. That is five times as many as pick Paris, the second-most popular city in Europe.
The gap grows even larger when looking at just the non-European companies, with 60% of them having their European headquarters in London.
The study shows that London also comes out the winner as a destination for top talent; nearly half of all high-skilled workers in the top five European business cities are employed here. Paris again comes second, with 19%, followed by Berlin (13.7%), Milan (11%) and Frankfurt (9.8%).
London’s dominance in attracting Europe’s top talent contrasts with New York. While the Big Apple has the largest proportion of high-skilled workers from across North America’s top five cities, it only accounts for just under a third of the total.
Angus Knowles-Cutler, a senior partner at Deloitte, said the “sheer gap between [London] and any continental rivals really surprised us. It is hard to imagine the US economy without New York at its heart, but the facts here show that London is even more vital to European business and commerce.”
However, the study also sparked a warning from figures in the City over the prospect of an in/out EU referendum.
“One of the main reasons companies come to London is because the city is a springboard to Europe — the biggest single market in the world,” said Baroness Jo Valentine, chief executive of business group London First.
“If we are left outside of the EU after a referendum we would no longer be able to offer that prize to businesses and London would suffer because of it.”
Deloitte also reiterated its call for the Government to overhaul visa rules with an “intelligent” system that will allow London to keep attracting high-skilled workers to the capital.
Other measures the firm is calling for include the appointment of a “chief talent officer”, responsible for London’s approach to attracting workers, and more work to tackle the problem of the increased cost of housing.
London Mayor Boris Johnson promised to “consider this report’s recommendations carefully”, saying: “Long-term planning is essential to maintain and strengthen the city’s position as the greatest city in the world.”