The Clustering of Financial Services in London*

interaction is likely to hinge on common understanding, trust and complementarity of
expertise. Moreover, one is likely to interact more frequently with those with whom one
has a more intense personal relationship. Meeting socially, whether by chance or design, is
palpably of great importance. Mixing at business events and telephone contact for
information is significantly more likely to be rated as important by banks and larger firms.
Contact for short-term problem solving tends to be emphasized by management
consultancies who have a disproportionate tendency to rate this as very important, however
the difference is not significant. Banks and investment banks also have a tendency to rate
contact for problem solving as important more frequently than other types of activity. The
interview survey revealed that while chance meetings were not emphasized as a key driver
of location decisions, they were an important benefit of proximity. The kind of things
discussed in chance meetings tend to be industry gossip about what particular firms or
people were doing, what key developments are taking place and sometimes bouncing ideas
for new products or services.

Table 6: Methods of Interaction between Firms

Results from the interview survey entirely corroborate the questionnaire survey
regarding the importance of social relationships in sustaining the cluster and the
significance of specific meeting places where interaction occurs. These interview excerpts
demonstrate the existence of both “old” and “new” practices of interaction in the cluster
and articulate the importance of both tacit and formal knowledge transfer in the cluster via
business and social interaction amongst all sub-sectors:

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