London Calling

Must read article in today's Wall Street Journal on London as a center for global wealth. 

Behind the surge of money pouring into London is the globalization of wealth. As new multimillionaires are minted in Russia, India, the Middle East and Europe, many are coming to London, drawn by a combination of low taxes, historical ties and a geographical location that makes the city attractive for people doing business in Eastern Europe, Asia and the Middle East. ... London now rivals New York as a center of international finance.

And arts and culture, I might add.  London is emerging as the world's leading city, surpassing even NY. The Greater London mega-region  is one of the largest economic units in the world and quite innovative as well.  The rise of London reflects the new realities of mobility and geographic concentration in the era of spiky globalization. How fast this shift has occurred? A decade or so ago, no one in their right mind would have predicted the rise of London to this level.

We are in the middle of a great shift in the mobility, migration and location of global talent.  The world isn't flat, it's spikier and more concentrated than ever. The urban hierarchy is consolidating on a global scale. There are but a dozen or two core cities in leading mega-regions that are attracting global talent. It is globalization which is behind the dramatic run-up in real estate in these places.

The competition for talent has emerged as the key axis of global competition. If the US dominated this competition for nearly a century, that dominance is now coming to an end. Its restrictions and global posture are part of it it, but it is really being driven by great cities around the world becoming more open and attractive. The contours of this shift are just beginning to be noticed. Just wait: The location decisions, not just of the wealthy but of global migrants from graduate students to the less skilled, that are happening now will really play out a decade or two down the road.

Comments

[Andrew Inglis]

Dear Richard ,
it is not much use attracting billionaires to London if it is mainly other wealthy people that benefit .London still has high levels of poverty .The plutocrats care little for these people on the whole and treat third world people as cheap labour .Global capitalism largely concentrates the wealth it generates into the hands of a small minority ,leaves hundreds of millions in dire poverty and the rest of us struggling .The obscene house prices in London mean that many talented but non-wealthy have to live outside the city or leave altogether .London divides into the wealthy living in West End splendour and the poor remaining in social housing and on benefits .This divide is unhealthy and causes and perpetuates all kinds of inequalities .It is not unlike Victorian London .Things will only stabilise when global capitalism recedes ,
Yours sincerely ,
Andrew Inglis.

[RF]

Andrew -Well said. The global creative economy is not flat at all. Like you say, it is incredibly spiky, generating both geographic as well as social and economic inequality. In fact, the two increasingy go hand in hand. Our work recognizes that and we believe this needs to be understood and recognized before it can be solved. The right wants to ignore this; the left wants to return to the "golden years" of the 1950s. Neither will work. The key is to construct institutions which can harness and reward the creativity of all, particularly in the service sector. That's what we are trying to do. And that's why we call out new research center, the Prosperity Institute meaning not just economic growth but sustainable and inclusive growth. RF

[Barkley Rosser]

It may be the rising center of finance (certainly) and of arts and culture (more debatably), but the last figures I have seen still do not put any measure of London as a metropolitan area into the top ten in the world in population, with it remaining near Paris and Moscow in size somewhere in the teens in the rankings of the mega-metropoli.