The Clustering of Financial Services in London*

Table 2: The Importance of Being Near Leading Competitors

Banks, investment banks and fund management firms were significantly more likely to
rate the ability to gain real time information about market trends as an important advantage
of a London location than other firms, and accountancy firms and management
consultancies are significantly more likely to rate it as unimportant. At interview, these
findings from the questionnaire survey were substantiated in more detail. Banks in
particular, acknowledged that proximity to the market and organizations which provided
real-time data was crucial for their survival in the market, which was mediated in many
instances through personal interaction and social relations. The spur of local rivalry was
significantly more likely to be viewed as an important benefit by banks and legal firms and
significantly more likely to be viewed as unimportant by accounting firms and management
consultancies. The ability to benchmark against competitors was of far greater importance
to firms in legal services than other lines of activity, whereas not a single management
consultancy and only one accounting firm saw this as being either an important or very
important advantage. As regards size effects, larger firms place significantly more
emphasis on the importance of being near to market leading competitors, the ability to
benchmark, being near a strong, skilled labor force and the spur of competition.

One feature which was brought out in a number of the interviews was the importance
of the wider attraction of London as a major metropolis. As one firm put it, “its history, its
appearance, its buildings, its culture, its arts”. Interviewees emphasized the need to

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