Financial and related professional services: not just a London story

Yesterday saw the launch of our latest economic research report—UK-based financial and related professional services: enabling growth across the UK.

This flagship report analyses the industry’s economic contribution—measured primarily in GVA and employment terms—to all the different regions and nations of the UK. It makes the point that although London is indisputably the UK’s leading international financial centre, the industry makes a positive economic contribution in every area of the UK. This image, for example, introduces the report’s final chapter. The map shows regional-level GVA data…

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… but the chapter itself drills down to present city-level data.

In my presentation at the launch event in Manchester, I spoke about one of the key themes of this research, which is that the competitive landscape is changing within the financial and related professional services industry—but also more broadly, at a macro level. And I emphasised the need for collaboration, noting that in many cases it will be more effective than competition in ensuring that all parts of the UK can prosper in the years ahead.

This is because cities, regions and nations that offer complementary specialities can benefit from network effects. I think people are most familiar with the idea of network effects in the context of technology and in particular, thinking about social media—Facebook often springs to mind as an exemplar of positive network effects, where the more people use a product or service, the more valuable that product or service is. But in the context of UK-based financial and related professional services, I wanted to emphasise indirect network effects, where a rise in usage of one product or service leads to an increase in demand—and therefore in value—of other, complementary products or services: potentially a virtuous cycle indeed.