The Economic Future of the Central Activity Zone (CAZ) Phase 1: Office use trends and the CAZ ecosystem Report to the Greater London Authority (GLA)
3. The CAZ ecosystem thrives on its diversity of users The diversity of the CAZ is key to London’s economic and cultural success Themes of diversity and cultural integration are used as criteria in the Global Cities Index (2020), Global City Lab (2020), the Global City Power Index (2020) and The World’s Best Cities (2020), all of which rank London within their top bracket overall. The diversity and inclusion of its residents and workers is therefore key to London’s reputation internationally. London has the highest concentration of minority ethnic led businesses in the UK (BEIS, 2019). Within the CAZ, access to a wide range of workers, with different skills, viewpoints and backgrounds is a driving force behind corporate success. The CAZ recruits from all over the world, and the mix of nations, races, and other demographic factors in central London, give it a diverse “feel” that is unrivalled anywhere. London’s more diverse companies are more successful More ethnically and gender-diverse companies are more successful (McKinsey & Company, 2015; Nathan & Lee, 2013). And diversity is key to innovation and new ideas. Immigrants are more likely to be entrepreneurs, and more likely to be successful at it: almost half of the UK’s fastest growing businesses has at least one foreign-born founder (Forbes, 2019). Taking London’s fintech sector alone, analysis suggests its runaway success in recent years is due to January 2021
its culturally diverse founding teams, with two-thirds of directors born overseas. Fintech businesses with boards dominated by foreign nationals were more successful in scaling-up, and attracted four times as much start-up funding as those with UK-only directors (Pivigo, 2017). Similarly, minority-led businesses are better able to export and import from the UK, often making use of networks and language from their country of origin (GLA, 2017b). The importance of international workers Between 2009-2017 London’s labour force increased by 19%, almost all of which was international migrants. These migrants are disproportionately likely to be working in many of the capital’s lower wage hospitality sectors. Taken together, Brexit and COVID19 are threats to the continued flow of these workers into London; whilst estimates for London’s migrant working population are rough, but one recent estimate suggests that London’s migrant workforce has fallen by 700,000 people during the pandemic (O’Connor and Portes, 2021). This number contributes to London’s highly educated workforce and ensures employers have a great selection pool of educated candidates, contributing to its high productivity (Centre for London, 2020c). Since 2016, there has been a decreasing growth rate of EU migration, as well as some outflow of EU nationals, although such recent
trends must be interpreted with caution (Centre for London, 2020c). Brexit will undoubtedly further influence the migration trends from the EU through decreasing EU nationals’ preference of working in London, through the change in residency rights after December 2020, as well as through employers moving parts of their operations abroad, although London’s central population estimates (see p.102) assume similar, if slightly lower rates of international migration to previously. International workers are also important for tourism, as 24% of all visits to London are for visiting friends or relatives. These visitors contribute to 18% of all international tourist spend (ONS, 2019b), and may be the first tourists travelling to London after COVID-19.
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