It seems like a lot of movies have been shot in London lately.
One example is Bridget Jones’ Baby, the latest episode from Bridget Jones saga which
I might have seen...
Look at those skyscrapers in the background, those were simply not there in the first movie
of the saga.
In fact, London´s skyline has changed dramatically in the last 10 years.
And this is surprising because we are not talking about an emerging economy like China
or Singapore.
Actually, the overall economy in the UK has not performed especially well in the last
few years.
However, London is another world.
Today it is one of the four fastest growing capitals on the planet - growing almost at
the same level as Dubai.
Their population has increased by 50% rate in just two decades.
This is particularly odd in a continent like Europe, where all the countries are seeing
overall population decline.
Instead, London has 3 million more inhabitants.
And in the finance world, London city is now more important than New York City itself.
So, you might wonder what exactly happened in this city which would explain this massive
success?
That’s what we’re looking at in today’s Visual Politik video!
IMMIGRATION
United Kingdom has always been a country of immigrants.
And, London was always the main destination.
Nonetheless, in the last decade, immigration has absolutely skyrocketed.
After Poland became part of European Union, in 2004, a lot of Poles moved effortlessly
to the city as no visa was required.
The same happened when Bulgaria and Romania became EU members in 2007.
This created a whole new influx of immigrants that added those from India or Pakistan.
These European immigrants typically have higher education and university degrees.
In fact, today London has over 1.7 million highly skilled workers while New York has
just 1.6 million.
Immigrants are not only working the jobs Brits don’t want to do anymore, but they are also
starting businesses and getting hired by high tech companies.
But
companies are far more than just job creating machines, or factors that boost economic growth.
The fact that London has more well educated people means more bars, more exhibitions,
more culture…
In summary, all the things that make a city look “cool”.
As an example: Where is the best Peruvian restaurant outside of Peru?
Well, according to all the gastronomical guides, it is CEVICHE, and of course, it´s in the
British capital.
And this is how London created a virtuous circle that attracted more and more people.
This is why, in 2008, after the financial crisis, many Spaniards, Portuguese and Italians
who wanted to leave their countries, saw London as the main destination.
It was more than just a good place to find a job.
It was a cool place to live.
This is what economists call the “NETWORK EFFECT”.
The more people and the more companies you have, the easier it is to attract highly skilled
immigrants.
For a better understanding, since 2010, over 1000 startups have been created In London
every single year.
But hold on a minute because there is more!
THE CITY OF LONDON
All the skyscrapers you see here are concentrated in an small area, not bigger than a square
mile.
This place is called the “CITY OF LONDON”.
Yes, on the one hand, we have London, and then, there is the City of London, which works
like a country of it’s own within the United Kingdom.
Yes, we British usually say that Great Britain is made up of four nations: England, Wales,
Scotland and Northern Ireland.
But this is not exactly true...
In fact, we should add a fifth one, and this is the City of London, which has its own Mayor
and its own laws.
London’s Mayor is the man you are watching on the screen now, his name is SADIQ KHAN.
But the City of London has its own Lord Mayor, he is called JEFFREY MONTEVANS.
One of the characteristics of The City, AKA the Square Mile, is that during the elections,
both citizens and companies have the right to vote.
For instance, Unilever has it’s headquarters here in the Square Mile.
This means that when elections are held, Unilever can vote.
So, you might wonder…
Does the vote of Unilever count the same as one from a smaller company?
The answer is no.
The number of votes a company gets will depend on how many people they employ within THE
CITY.
By the way, the music that you are listening to is THE FORGOTTEN VOICE, a pop-rock band
from Ireland who sent us their music.
If you like it, you will find more information on the description box below.
And now you might wondering whether the City of London a FISCAL HAVEN?
The answer is NO.
All across UK, taxes are fairly similar.
But it is true that the Square Mile has far more business-friendly policies than anywhere
else in the UK.
For instance, their urban development laws are way more open and free than in the rest
of London - this is why they have more skyscrapers.
But when it comes to taxes, they are not a haven whatsoever.
But hold on a minute...
The City itself does play a very important role.
This is because the Lord Mayor’s main task is travelling all around the world promoting
London’s benefits for investment.
“The Lord Mayor of the City of London, Alderman Alan Yarrow, is to lead a business delegation
to Indonesia (19-21 May) helping to make sure London and the UK remain the regional partner
of choice when it comes to financial and professional services.”
So, in a way, you can say that London has its own marketing department showcasing all
their advantages to the world!
BUSINESS CONCENTRATION
The US economy is divided among different cities.
For example, politics is centered in Washington DC, finance in New York City, entertainment
in Los Angeles, and technology in San Francisco.
The same happens in Germany, where you have cities like Berlin, Frankfurt or Munich.
And in Spain, you have Barcelona and Madrid…
Britain on the other hand has London... and just London.
The rest of the cities are far less important for British economy.
In fact, London makes 1 out of every 5 pounds generated in the whole country.
In this city you will find all the major Government institutions, the banks, the technological
sector, the fashion centre, etc…
And to this, we should add another key element: English.
As you know, the UK has held pretty good relationship with United States (at least for the last
two centuries.)
Even though there is no trade agreement between the two countries, they have much history
in common and, most important of all, we both speak the same language.
Add to this the fact that United Kingdom is (currently) a part of the European Union and
you can easily understand why London has become the gateway for any American company wanting
to do business
in European markets.
But now the big question is how will BREXIT affect London’s growth?
One thing is clear: even though the majority of the British population voted in favour
of leaving the EU, Londoners wanted to REMAIN.
So what do you think?
You can leave your answer in the comment section below.
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And see you next time!