HAMISH MCRAE: Despite all the talk of London losing to continental European hubs, the place is still a magnet for talent… and money
Follow the money, in this case $1 billion. This is what Google pays to buy its office complex in Covent Garden in London.
This says two things. The first is that despite all the talk about people not wanting to go to the center of major cities, they will continue to do so. Covent Garden is about as central as it gets.
The other is that despite all the talk of losing London to continental European centres, the place is still a magnet for talent… and money.
First place: London has just been ranked by the Forbes Under 30 survey as the best city in the world to be an entrepreneur
Google used to rent this space, but will now reconfigure it into something more like a club, with a covered outdoor workspace, meeting rooms for teamwork, and more. This is in addition to its sleek new offices in King’s Cross, increasing its capacity to 10,000 workers. It currently employs 6,400 people in the UK, so it expects its footprint to grow.
These are well-paying jobs by any standard. In the year before the pandemic, the median salary at Google was over £200,000 a year. So there is a huge demand for talented, tech-savvy young people – the average age of Google employees worldwide is around 30. But this demand doesn’t just come from giant corporations. It also comes from start-ups.
London has just been ranked by the Forbes Under 30 survey as the best city in the world to be an entrepreneur. Each year, Forbes magazine selects 600 of the most promising young entrepreneurs from around the world.
This year, London was ahead of New York and well ahead of San Francisco. The United Kingdom was second only to the United States in total numbers and, curiously, the third most entrepreneurial country was Russia and the fourth was India. Continental Europe was barely figured.
This is just a poll, and you should always focus on what people are doing, not what they are saying. But other polls on London’s attractiveness confirm its status.
For example, last year’s Global Startup Ecosystem report tied London with New York after Silicon Valley as the best place for a tech start-up to thrive.
Yet in number of unicorns – companies launched on the public markets with an initial value of more than $1 billion – created last year, London was only fourth, after San Francisco Bay, New York and Boston.
On this measure, the city does well by European standards, but it’s not good enough. It’s a global game, not a European one. We will have to see if recent changes in registration requirements and other regulations will make it a more effective competitor vis-à-vis the United States.
There will always be more money in America, especially at this time with the massively expansionary policy of the Federal Reserve and the huge US government deficit. So what the UK needs to do – and this should be a UK-wide thing, not just in London – is create the most attractive place for young people around the world to start their business .
If the flow of money begins to recede a little, as it surely will, then the premium on genuine entrepreneurship becomes that much greater. The best ideas will get support rather than everyone else with a plausible pitch. So that should be the goal. It would be good for young Britons but also good for the world. It’s the policy of Wimbledon: to create the facilities for the best in the world to come and play.
Prediction at the rendezvous
When news came out on Friday that, thanks to stronger growth in November, Britain’s economy was finally bigger than it was before the pandemic hit, it was greeted as a surprise. Well, it won’t have been for people reading this column, as I expected we would be there this fall, and November is coming. December could see things fall back following Omicron’s damage, and January will be weak. But February should see a sustained recovery.
In fact, the real surprise is Germany’s poor performance. New figures show it rose just 2.7% last year, leaving it more than 2% below its pre-pandemic level. Part of the problem has been its supply chain issues, which have been particularly difficult for its auto industry.
The moral? The UK has been hit harder than most in 2020 as it is a service-driven economy. Germany did better. Then in 2021, the UK recovered much faster and finished top. It’s not for singing. It’s just to emphasize that it’s been terrible for everyone, and to hope that next summer the global economy will be sunnier.