Six big shifts

Big shift one: Workforce in flux

Brexit ended an era of almost limitless labour supply at all skill levels, upending London’s migration patterns and leading to labour shortages in key sectors such as construction and hospitality.

The legacy of Covid-19 is many Londoners leaving the workforce because they chose to retire, became long-term sick or are caring for others. Poor health, including mental health, is keeping growing numbers of (particularly younger) Londoners out of work.

High housing costs are increasingly putting a strain on recruitment and talent retention. Businesses consistently say that lack of skills and talent is the biggest barrier to growth – despite higher net migration than before Brexit.

The challenge for London is to grow the skilled workforce in this new reality. We tackle this in the inclusive talent strategy section.

 

Big shift two: Changing nature of work

Covid-19 crystallised a generational change in the nature of work. Hybrid and flexible working patterns have become normal in many sectors. Younger generations have new expectations of work-life balance.

Many more Londoners now work freelance or fractional jobs or in the gig economy. For some, this means more flexibility, more income and pursuing personal passions. But the gig economy also leaves many open to exploitation, low pay, poor working conditions and insecurity.

Artificial intelligence will increasingly change the nature of work – and London is particularly exposed, because of its large knowledge-based, services sector workforce.

The challenge for London is to provide good-quality work in a changing world. We tackle this in the inclusive talent strategy section.

 

Big shift three: From innovation taker to innovation maker

London’s growth in the last 20 years was driven by very successfully applying technologies like the internet, cloud, mobile and blockchain to our services sectors. London has taken technologies largely developed in the US and applied them at scale.

London now has the opportunity to become an originator at the frontier of innovation, as well as a taker of innovation from other countries. London’s exceptional research strengths put us on the brink of an explosion of innovation in areas such as life sciences, climate technologies, artificial intelligence and quantum computing.

The challenge for London is to turn brilliant discoveries and inventions into global companies. We tackle this in the growth sectors, backing our businesses and investment and promotion sections.

 

Big shift four: Polycentric growth

London’s city centre has been at the heart of the global economy for hundreds of years. The West End and the Square Mile are unique and inimitable. London’s city centre is 11% of the entire UK economy^[11] and vital to achieving the national and London growth missions.

In recent decades, significant new clusters of growth in London have sprung up at Canary Wharf on the Isle of Dogs; in the Knowledge Quarter around King’s Cross; in the of east of the centre around Old Street, Clerkenwell and Shoreditch; south at Battersea, London Bridge and the South Bank and west to White City. The massive regeneration delivered by the 2012 Olympic Games created a new economy in Stratford and Hackney Wick. London has significant commercial office clusters in centres like Croydon, Ealing and Kingston.

London’s next phase of growth will continue this trend, with major new commercial and industrial developments outside the city centre, including Old Oak and Park Royal, Royal Docks, Earls Court, Brent Cross Town, Meridian Water, Barking and Dagenham.

The challenge for London is to maintain a thriving city centre and to create the infrastructure and places for growth to spread across the city. We tackle this in the places for growth and housing and infrastructure sections.

 

Big shift five: Climate and ecological emergency

The climate crisis takes on a new urgency. London must decarbonise to slow climate change and improve air quality. It must also respond to the inevitable rise in temperatures and extreme weather which has already begun.

This will require unprecedented levels of investment and a supply chain mobilisation not seen since the war effort of the 1940s. Climate action in London will create economic growth and a large domestic market for green innovation, which London can then export to the world.

The challenge for London is to finance the green transition and to secure the supply of people and materials to deliver it. We tackle this in the housing and infrastructure, investment and promotion and inclusive talent strategy sections.

 

Big shift six: Reordering of global trade

The UK’s trade patterns are in flux as a result of Brexit, Covid-19, the war in Ukraine and trade tensions with China. Global supply chains are increasingly being brought back onshore, or into neighbouring friendly countries.

The new US administration may shake global trade patterns further. London businesses are diversifying their exports into dynamic markets in the Middle East and Asia Pacific.

Exporting services to the world is the bedrock of the London economy. We must stay agile so that we keep growing international trade in a world of turbulent geopolitics. We cover this in the backing our businesses and investment and promotion sections.