The Clustering of Financial Services in London*

maintain London’s image, as the place people want to live and work with regard to
contemporary lifestyle, fashion, choice, and taxation. London’s openness, cultural
diversity, cosmopolitanism and “buzz” were seen as governing the marginal decision for
global companies about where to locate new business. One banker stressed that,
“Importantly, as a financial center, London is an open society that is accepting to overseas
people and to business”.

London is seen as a positive place to come to because there is so much to do - the
social environment rather than just the economic e.g., in comparison with Frankfurt -
you can do a similar job in Frankfurt but outside the job it just doesn’t have the
richness of things to do in a London environment. And so London, not just as the City,
but London as a whole has that pull ... there’s no chance of our moving anywhere else.

The vibrancy of the arts is a major pull against the negative factors - the arts,
restaurants and so on. Yes it’s a case of nurturing it.

3.2 The Labor Market

The labor pool from which the London financial services cluster can draw is clearly
one of its greatest assets. The questionnaire and interview surveys indicated the extent to
which London displays classic cluster advantages in the labor market (see Table 3).

Table 3: Labor Market Benefits

The pulling power of London’s fluid labor market is one of the most important engines
of cluster dynamism. While a small number of respondents did comment on the negative
effects of mobility, such as the bidding up salaries and losing key staff to competitors, the
advantages of mobility seem to greatly outweigh the disadvantages. There is a general

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