Elephants and pins: steering the London economy

Poking an elephant with a pin does not get much reaction unless you pick precise parts of its anatomy.

So it is with the Mayor’s Office and the London economy. To be sure there are major interventions in planning and transport that can have a big economic impact such as Crossrail or the Shard. These are ostensibly controlled by the Mayor’s office but in truth they are almost always decided after protracted negotiation with the Government who still hold most of the purse strings in the capital, as they do in all UK cities.  Arguably a planning inspector from Bristol and the Secretary of State for Transport have more power over the London economy than the Mayor, despite his million vote mandate.  You only need to look at the current debate over our primary airport to see who has the whip hand.

Yet if London were a European nation, in economic terms we would nestle between Switzerland and the Netherlands. As Deputy Mayor for Business and Enterprise since 2012 my job has been to stimulate as many Londoners as possible to become economically active and to prepare the city for the economy of the future. So with the trophy projects subject to a wrestling match among the grown-ups, and only a small team of 25 people armed with a limited budget, where to poke the pin?

The London Enterprise Panel – a partnership between the private and public sector, under the guidance of the Mayor’s Office – set its sights on four key fleshy parts of the London anatomy.

First and most pressing since 2008 we needed to address our product mix. Make no mistake, we love financial services at City Hall – it pays for everything we do and then some, and City Hall is the only political institution that has consistently spoken up for that industry. But we saw the dangers of only having one string to our bow in 2008.

And in fact we aren’t just the capital of capital, we are quietly also one of the great global cities of science and technology. Very quietly – so quietly in fact that no one seems to have noticed and until recently we certainly hadn’t paid the sector much attention at City Hall. Yet if you add us together with the two bright stars of Oxford and Cambridge, we form a golden triangle of scientific research that constitutes the most powerful discovery engine on the planet. With five of the world’s top 40 universities and myriad institutes and research centres in biomed, technology and digital, we could become the cradle of world science, as we are in finance – and that has become our objective.  With the launch of Med City, alongside the wildly successful Tech City initiative started by Number 10, we now have the twin pillars that can harness this sector as a huge job and wealth creator for the future.

Second on our list are skills. If we want those science and knowledge jobs, if we want to remain Europe’s largest digital cluster, then we need a workforce that has the skills required to fuel growth. So we are firmly on the government agenda of shifting the further education sector to be led by employers’ needs.  Our primary tool for this is the apprenticeships scheme, changing the perception that apprentices have to carry a spanner, opening up science, technology and financial services for young people from all backgrounds. We will also use our recently announced influence over the London FE capital budget to steer projects towards our priority industries.

Third – SME’s: I come from a small business background and it has always frustrated me that politicians only seem to understand business through the lens of a large conglomerate. Looking through an SME lens, you see that what they need above all, especially in science and technology is what the market won’t provide to any great degree – seed capital, the magic ingredient that turns ideas into businesses. A city VC fund is in the works. Watch this space.

Finally we felt the need to do our bit for infrastructure, not least in support of our other priorities. We simply don’t have the firepower to do anything on our own, but we can apply a little financial WD40 to a project that has seized up. Our major intervention has been to make a £25 million contribution to the upgrade of the line to Cambridge, opening up a critically important development corridor the supports our science priority.

Of course we spend a lot of time broadcasting all of this and more to the world. Through London & Partners our promotional agency we seek out foreign investors and companies, and seduce them into joining the dozens of others who have set up shop in the capital over the last few years.

London is doing remarkably well. We have bounced out of the crash better than anyone expected. Our city is not without its challenges though, especially among the young where unemployment remains stubbornly high, and we hope that by judicious application of the pin, we can steer the city to provide the opportunities they need, and make an ever-greater contribution to our national wealth.