Factors Affecting the Economic Potential of West London

1
Factors Affecting the Economic Potential of West
London Robert Huggins Enterprise and Regional
Development Unit The Management School University
of Sheffield r.huggins_at_sheffield.ac.uk
2
West London boroughs of Hammersmith and Fulham,
Hillingdon, Hounslow, Harrow, Brent and Ealing  
3
West London - Some Perceived Strengths

• Heathrow - the worlds busiest international
  airport - excellent export and import access
  through its international connectivity.
• A significant creative industries cluster,
  embodied by the BBC studios and surrounding
  audio-visual cluster in White City and Park
  Royal.
• West London is home to some of the biggest blue
  chip organisations in the world, many of which
  have their headquarters located there. These
  include GlaxoSmithKline - Diageo - Cisco -
  British Airways - IBM - BBC - United Biscuits -
  BSkyB - Kodak - Bechtel - Carphone Warehouse.
• A significant concentration of employment within
  the transport and logistics sector, particularly
  within air transport.
• The main road and rail links to all parts of
  Britain and particularly between central London
  and the Thames Valley and the west of England.
• Relatively strong skills base.

4
West London - Some Perceived Weaknesses

• West London lags behind the rest of London in
  terms of per capita output approximately 9
  lower.
• A higher unemployment rate than the UK average
  and relatively high levels of long-term
  unemployment - over one in every four claimants
  within Brent has been claiming benefit for one
  year or more.
• Business start-up rates in west London lag the
  regional average by some way there has been a
  large differential since the late 1990s.
• Localities with significant multiple deprivation.
• West London is perceived to have suffered as a
  result of East Londons development, which has
  been boosted by the of the Docklands area and the
  financial businesses on its western fringe.

5
Standard Deviation of Sub-Regional GDP per Capita
for UK Regions
6
(No Transcript)
7
(No Transcript)
8
(No Transcript)
9
Employment by Sector (as a proportion of total
employment)
10
Employment Growth (Compound Annual Growth Rate)
1998-2002
Source Annual Business Inquiry
11
(No Transcript)
12
(No Transcript)
13
Employment (as a proportion of total employment)
in selected service sectors
Source Annual Business Inquiry  
14

15
Source SEEDA
16
West London Economic Structure

• West London is largely differentiated from other
  neighbouring sub-regional economies due to its
  high level of employment in transport and
  communications, and the distribution, hotels
  restaurants sector.
• West London employs a small proportion of its
  workforce (in comparison with neighbouring
  sub-regions) within banking, finance and
  insurance. 
• It also has a relatively small proportion of
  employment in public sector activities, compared
  with surrounding areas.
•  West London possesses a real strength in the
  digital media sector. However, comparing west
  London with the Thames Valley we find that there
  is a considerable differential in IT and
  communications sector (which includes software
  development) employment.
•  West London is under-represented in comparison
  with a number of its neighbours in the business
  and management consultancy sector. Only north
  London has a lower proportion of its employment
  within this sector.

17
Growth Constraints

• Perhaps a key constraint to business growth in
  west London is the apparent lack of economic
  connectivity with neighbouring areas such as
  Central London and the Thames Valley.
•  
• It has an obvious strength in the transport and
  communications sectors, but lacks a critical mass
  of other tradable specialisms in the
  knowledge-based sectors (with the exception of
  the creative industries).
• Business start-up rates in west London lag the
  regional average, and are not occurring in those
  sectors that have a high growth potential.
• There is little evidence that current business
  support mechanisms are creating the level of
  business growth required in west London,
  particularly for high value-added businesses,
  where market failures are often more difficult to
  address.

18
Concluding Remarks

• In order to develop the west London economy, the
  sub-region should also seek to integrate itself
  more with its surrounding sub-regional economies.
•  
• Whilst the Thames Valley, Surrey, Buckinghamshire
  and Central London have a large density of
  knowledge-based employment, the same cannot be
  said of west London which is wedged between
  these sub-regions.
•  
• The proximity of central London, as well as its
  proximity to the Thames Valley and other
  high-performing South East England sub-regions,
  means that West London is within the centre of
  the UKs most competitive regions.
•  
• Given its location and transport links, west
  London has an opportunity to capitalise upon the
  opportunities on offer as a result of its
  location by increasing interaction and acting as
  a bridge between central London and the Thames
  Valley.