Business Travel: London

London holds a special attraction for North American business, there's no doubt about it. In 2006, over US$1 trillion made its way in to the city from North America, a figure that takes in everyone from the giant multinationals to the most specialist of SMBs. But just what is it about the city that makes it so attractive, and what exactly are the pros and cons of setting up in Europe's largest consumer market? It all adds up "London is a fantastic and exciting city, attracting people from all continents," says recently elected Mayor, Boris Johnson. "It's this vibrancy - combined with a stable regulatory framework, access to world class professional services and a highly skilled workforce - that makes London one of the foremost places in the world in which to do business." But how do the figures back this up? The city's economy is currently valued at US$367 billion by foreign direct investment (FDI) agency Think London, and is home to Europe's largest regional workforce - more than 9.8 million, with one in three holding a university degree. Put this together with the diverse makeup of the city - around 25 percent of its working population was born abroad - and a research base that ranks second only to the US, and it's not hard to see why the potential for incoming businesses is enormous. Of course there are other incentives too. Despite the many local bleats, UK corporation tax is one of the lowest in Europe at 28 percent, while personal tax, although again a contentious subject, is still set to a comparatively low maximum of 40 percent. Unsurprisingly, all this has led London to be voted Europe's top location for business for the 16th year running in 2007 by the European Cities Monitor despite its high cost of living, ranking first for access to markets, quality staff, transport links, availability of office space and languages spoken. The London buzz Nigel Dunn is well-versed with these statistics. But having worked in and around London for 25 years, most recently in his role as Principal of Calx Europe, a firm that specialises in assisting US SMBs to set up in London and other major cities across Europe, you might think that he'd be entitled to feel a little jaded by now. Yet he admits that on both a business and personal level, it's an exhilarating place to live and work. "It's a sweeping generalization," he says, "but when you step into the Square Mile and look at the concentration of international financial service companies, there is only one other place in the world that can match it and that is New York." Any feature examining London wouldn't be complete without a look at the Olympics. After a solid showing in Beijing this year, England is readying itself for the arrival of the Games in 2012. "After the spectacle and success of the Beijing Olympics, I think Londoners have got the buzz and feeling of intimidation that Beijing invoked," says Dunn. "It was an awesome showcase, but with the best showing by British athletes since the last London Olympics, I think there is a renewed anticipation." And, as Johnson says, with that excitement comes some impressive opportunities. "Winning the honour of hosting the 2012 Olympic and Paralympic Games was a seismic moment for the country," he explains. "It's going to show its effects on the business community in many ways, on many levels and for many years to come." To back this up, the Olympic Delivery Authority and the London Organizing Committee of the Olympic Games (LOCOG) estimate that there will be 70,000 contracts issued between now and 2012 - a figure that will span all sectors and include a vast supply chain, boosting the city's economy by around US$80 billion. "It's a huge project," says Johnson. "During the Games businesses will be looking after approximately 17,000 athletes and officials, over 20,000 journalists and broadcasters, plus hundreds of thousands of spectators - all of whom will need food, drink, and a place to sleep. "It's going to be a powerful shop window to a global audience, not just for boosting tourism to the city, but also for sustaining our position as the world's centre for finance, insurance, construction and new technologies." Facing the pressures Of course, there are downsides. With the subprime crisis rumbling on, now might not seem the wisest time to make the jump into a new market so closely tied to the problems in the US - especially as investor confidence continues to be low, a problem well illustrated by the recent demise of the bank Bradford & Bingley. These concerns are well known throughout the business community. Back in June, a joint poll by the Confederation of British Industry (CBI) and consultancy firm KPMG revealed that four out of ten business leaders said that they had found it had harder to raise money. On top of that, a worrying six out of ten feared the city's general competitiveness was under threat, prompting CBI director-general Richard Lambert to say: "The message is clear - business is getting more difficult in London. London must be able to compete for business alongside old rivals like New York and new ones like Shanghai and New Delhi." It's no coincidence that the latter two benefit from the rupee's relatively weak standing against the dollar. But, while the high value of sterling has put many US companies off making their investments in the UK in the past, now it is falling back to more attractive levels. While, as Dunn explains, this has never been `the over-riding measure' for many, it does add another incentive for those thinking of making the jump. And whether this will be enough to offset the troubled global economy for the undecided is still to be seen, but for those that have the means, Dunn has one simple piece of advice: "Now is definitely the time to get in, especially to make the most of the Olympics. Four years will seem a very short time as the pressure builds."

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