HAMISH MCRAE: London's back…just Google it!


Follow the money, in this case $1billion of it. That is what Google is paying to buy its office complex in Covent Garden in London. 

That says two things. One is that for all the chatter about people not wanting to commute into the centre of large cities, they will continue to do so. Covent Garden is about as central as you can get. 

The other is that for all the chatter about London losing out to continental European centres, the place is still a magnet for talent… and for money. 

Top spot: London has just been ranked by the Forbes Under 30 poll as the best city in the world to be an entrepreneur, while Google hopes to attract tech-savvy young people to its new base

Top spot: London has just been ranked by the Forbes Under 30 poll as the best city in the world to be an entrepreneur, while Google hopes to attract tech-savvy young people to its new base

Google was leasing this space, but now will reconfigure it into something more like a club, with covered outdoor working space, meeting rooms for teamwork and so on.

This is in addition to its snazzy new offices at King’s Cross, bringing its capacity up to 10,000 workers. It currently employs 6,400 in the UK, so it expects its footprint to grow. 

These are well-paid jobs by any standard. In the year before the pandemic struck, the median salary at Google was more than £200,000 a year. 

So there is huge demand for talented, tech-savvy, young people – the average age for Google employees worldwide is around 30. But that demand is not only from giant enterprises. It is also from start-ups. 

London has just been ranked by the Forbes Under 30 poll as the best city in the world to be an entrepreneur. 

Each year, Forbes magazine selects 600 of the most promising young business people from all around the world. 

This year, London pulled ahead of New York and well clear of San Francisco. The UK was second to the US in total numbers and intriguingly the third most entrepreneurial country was Russia, and the fourth India. Continental Europe barely figured. 

This is just a survey, and you should always focus on what people do, not what they say. But other polls about the attractiveness of London do confirm its status.

For example, the Global Startup Ecosystem report last year had London equal second with New York after Silicon Valley as the best place for a tech start-up to thrive. 

Pulling ahead: London outranked San Francisco (pictured) in the Forbes poll

Pulling ahead: London outranked San Francisco (pictured) in the Forbes poll

However, in terms of the number of unicorns – companies launched on the public markets with an initial value of more than $1billion – created last year, London was only number four, after the San Francisco Bay Area, New York and Boston. 

On that measure the City does well by European standards but that is not good enough. This is a global game, not a European one. 

We will have to see whether the recent changes in listing requirements and other regulations will make it a more effective competitor vis-à-vis the US. 

There will always be more money in America, particularly at the moment with the massively expansionary policy of the Federal Reserve and the huge US government deficit. 

So what the UK has to do – and this should be a UK-wide thing, not just a London one – is to create the most attractive place for young people from all over the world to start their business. 

If the flood of money starts to ebb a little, as it surely will, then the premium on true entrepreneurship becomes all the greater. 

The best ideas will get the backing rather than everyone with a plausible pitch. So that should be the aim. 

It would be good for young Britons but also good for the world. It’s the Wimbledon policy: create the facilities so the best in the world will come and play.

Prediction spot on

When the news came out on Friday that, thanks to stronger growth in November, the UK economy was at last larger than it had been before the pandemic struck, it was greeted as a surprise. 

Well, it won’t have been to people reading this column, because I had expected us to be there this autumn, and November squeaks in. 

Strengthening: Official figures from the ONS show GDP grew by 0.9 per cent in November, meaning that the level is now higher than in February 2020

Strengthening: Official figures from the ONS show GDP grew by 0.9 per cent in November, meaning that the level is now higher than in February 2020

December may see things fall back as a result of the Omicron damage, and January will be weak. But February should see a sustained recovery. 

Actually, the real surprise is how badly Germany has performed. New numbers show it grew only 2.7 per cent last year, leaving it more than 2 per cent below its pre-pandemic level. 

The problem has been partly its supply-chain issues, something that has been particularly tough for its motor industry. 

The moral? The UK was harder hit than most others during 2020, because it is a service-driven economy. Germany did better. 

Then in 2021, the UK recovered much faster and has ended up ahead. 

That is not to crow. It is simply to point out this has been dreadful for everyone, and to hope that come the summer, the world economy will be in a sunnier place. 

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