London: Capital for a New Millennium
Open, Integrated, Reborn
A city of openness, innovation, intellectual authority and unquestionable energy, London now stands as the financial capital of the world. What secrets does it have to teach Taipei?
Open, Integrated, RebornBy Isabella Wu
From CommonWealth Magazine (vol. 389 )
On a late December morning, Hyde Park appears to have been sprinkled with confectioner's sugar, the expanse of frost-covered green grass glistening resplendently ahead as a procession of black, bubble-roofed taxis and red double-decker buses plods along the roadway skirting the park. A small group of cyclists clad in skin-tight fluorescent green with black briefcases strapped to their backs whizzes by ?V office workers on their way to work ?V the lines of their helmets blending into their crouched bodies as they charge aggressively ahead, heat and vitality seemingly bursting from them.
This is today's London: colorful, fast-paced, vibrant and seductive.
In the British newspaper The Independent's most recent rankings of the world's top 60 cities, London has eclipsed Paris and New York to emerge as the new 'capital of the world,' setting a new benchmark for globalized economics and urban living while becoming the world's opinion leader.
If you're looking for a new standard for the metropolis of the 21st century, look no further than today's London.
The New Lord of the Globalized Economy
At 8:30 a.m. the crowds are pouring out of Bank Station ?V a coffee cup-toting Asian woman, a young man lugging a suitcase, a middle easterner in a kaffiyeh ?V rushing along the narrow streets and disappearing behind the dull gray facades of the elegant Portland stone buildings.
The Bank of England, Hong Kong and Shanghai Banking Corp., Barclay's Bank, the London Stock Exchange... the world's heavyweight financial institutions are all gathered here in the city center, in the financial district known as the 'City of London' that covers just 3.6 sq km (Taipei's area, by contrast, totals 272 sq km).
Well, the new results are in, and London has eclipsed New York as the world's leading financial center.
The London Stock Exchange is the world's most globalized, listing more than 650 foreign companies from more than 60 nations. Trading volume on London's foreign exchange market is the world's largest, accounting for one third of total global foreign exchange trading and even exceeding the combined forex trading of the New York and Tokyo markets. Funds under management exceed US$7 trillion, also tops in the world.
In the European Cities Monitor rankings, London has consistently ranked as the 'best city to locate a business.' In terms of access to markets, human resources, international transport links and communications, London ranks number one. London's combined score in the most recent survey was nearly twice that of Paris and three times that of Frankfurt.
So how has The City been able to make such monumental, dizzying progress?
The multi-ethnic visages of the crowds on the street provide something of a clue.
Amidst London's human resources pool one might currently find speakers of around 300 languages; one-third of them were born outside of Britain.
Both Feet on the Globalization Fast Track
And what is the crux of London's turnaround?
'Openness to the world,' says London Business School professor Don Sull, whose research into strategic and competitive advantage has taken him throughout Europe, Asia and the rising cities of the Middle East.
'Innovation, opportunities, new business start-ups, and progress in the world are driven by new ideas, capital, and technology. And you've got to attract these things,' Sull posits in rapid-fire staccato delivery, as if the work of finding the fast track to a place in the sun in the globalized economy leaves no time to take a breath. From the 17th through the 19th centuries, the fastest track to growth was outward colonialism to secure land and resources. Today, it seems the paradigm has shifted to attracting capital and human resources inward.
In attracting capital, London benefits from its fully transparent system of disclosure and relatively low tax rates. The highest corporate tax rate in Britain is 28 percent, 40 percent for income tax. Tax rates on non-permanent residents are even lower.
Human resources will follow the inflow of capital. Britain has not only liberalized immigration policy, but also broadened regulations covering the hiring and termination of employees so companies may more easily look abroad for human resources. They have even set up a one-window service to handle everything from locating office space to finding personnel for interested companies.
If you hail a cab waiting near the huge, colorful video screens along Piccadilly Street, your driver may by a Nigerian with a jet-black complexion. If you dine in an Indian restaurant, you may well be served by a blonde, blue-eyed waitress from Poland. During his campaign, recently elected French president Nicholas Sarkozy made a stop in London to stump for votes. London now hosts the world's seventh-largest population of French-speakers, many of whom are concentrated in the high-income, knowledge-intensive financial sector.
The Untold Secrets of Openness
The economy is the heartbeat of a city.
Allowing everybody to enter and thus creating more job opportunities: that is the simple principle advocated by David Lewis, lord mayor of the City of London. The 30-year veteran barrister's steely gaze over his gold-rimmed glasses reveals not a flicker of emotion. Yet Lewis concedes of such an open policy: 'It was a gamble, maybe at a time.'
One top executive who is a long-term London resident notes privately that it's an open secret that Britain considers only the money without asking its source. Be it Middle Eastern money, Russian organized-crime money or that of the scion's of foreign political dynasties, nothing is refused.
As time goes on, issues such as the worsening wealth gap and the inability of cities to cope with the influx of immigration have periodically cropped up in the media. But the openness of London remains unchanged.
As everyone knows, were London not so open it would soon begin to atrophy. Even in the wake of as serious a terrorist challenge as the London Underground bombings, Londoners were back on the tube the next day, eschewing the myopic nationalism that took place in the United States.
Wimbledon-style Development Strategy
If you are under the impression that London has reached the pinnacle merely with an open-door policy and the allure of low taxes, you underestimate The City. London is the hometown of bankers. London's unique advantage lies in the more than 300 years of financial development that have made The City the standard-bearer in financial regulation and financial products and services.
With the rise of Islamic financial institutions, personnel were brought in to make London the biggest Islamic financial center outside the Islamic world. With the explosive growth of derivative products, London has called on its extensive foundations in the insurance and transportation industries to design a variety of niche hedging instruments targeting a variety of industries, including container shipping. London is the world leader in over-the-counter derivatives trading.
Openness, flexibility, innovation. Currently three quarters of all Fortune 500 companies have offices in London. Foreigners own one quarter of London companies.
No wonder people have compared the London economy to the Wimbledon tennis championship: when the gates open, the world's best come out to play. Who will emerge the champion? That's not important so long as London continues its prosperous development.
A New Standard for a Changing Urban Face
The new focus on London as the world capital is not only due to economic growth, but perhaps even more due to the enormous effort by the entire city to present a new face, provide new services and culturally innovate.
Climbing aboard the giant, brushed aluminum Ferris wheel known as the London Eye, the view of London, whether looking south toward Westminster Abbey or west toward Hyde Park, is a forest of massive cranes and construction, construction and more construction.
With a history of 2,000 years, London is like all old cities. Industrial Revolution-era factories fell into disuse as industry moved out and the 19th-century train station was unable to cope with the demands of modern transportation.
But Londoners clearly understood that challenge is an opportunity, and history is a priceless asset; the difference has been in new imagination and resources.
Even more breathtaking has been London's ability to stand upon the shoulders of tradition while continuing to innovate and seamlessly integrating ultramodern new structures into the cityscape. From atop the London Eye, the thousand-year-old spires of Westminster Abbey at once stand out, but without seeming at all out of place.
London has purposely preserved its manifold memories and abundant cultural heritage, and drawing from these rich elements, it continuously innovates.
London can be a globalization partner for other cities, enthuses Ashish Mishra, senior manager for emerging markets for the London Development Agency. London's urban renewal experience can now become a model for export, Mishra says.
An Opinion Leader of World Standing
A city may be rich and successful, but that doesn't necessarily translate into influence. London has all three, owing to its capability for critical thinking, an innovative culture and quality media.
The offices of major media organizations like Reuters, Associated Press, The Times of London, the Financial Times, the Guardian, The Independent and countless others line both sides of Fleet Street running from the City of London to the City of Westminster. This is Britain's media headquarters. While the viewpoints may differ, from the left-leaning Guardian to the right-leaning Financial Times, each has an educated and loyal readership, their rational discourse deeply engaging the public.
As time has marched, some media organizations have departed Fleet Street, but that has hardly diminished the influence of London media. With the rising tide of digitization, the apprehension that 'print is dead' has descended over the entire media establishment. Bucking that trend, however, are The Economist weekly newsmagazine and the Financial Times newspaper, both of which have posted growth in circulation. With a lock on the elite readership, The Economist has doubled circulation during the past 10 years, and readership in the U.S. market last year grew 13 percent.
'In the States, you have such a tiny percentage of foreign news stories,' says new-generation economist Noreena Hertz, summing up the comparative advantage of the British media over their American counterparts in covering international events ?V a critical requirement in the age of globalization. The BBC and The Economist are prime examples of this, Hertz asserts.
Due to its past experience, in which the sun never set on the political and economic development of the British Empire, the London media has cultivated an international outlook that better enables it to interpret world changes.
Who will find Latin America's growth to be an opportunity? Who does it threaten? As occurrences in one part of the world sweep the rest of the globe in an ever faster domino effect, more and more people are choosing to flip open The Economist or tune in to the BBC to see how they interpret events. Savoring the pleasure of double-digit growth, one top executive at The Economist declared with a hint of boastfulness: 'The world comes to us.'
As the sky grows dark, the London Eye comes to resemble a sapphire necklace adorning the city. Facing west toward the centuries-old grandeur of Westminster Abbey and St. Paul's Cathedral, only London could understand how to add modern pizzazz to such a prospect.
Early 20th-century American diplomat and author James Weldon Johnson once described London as 'a city not to be visited, but to be captured.'
In a changing world, the upper hand shifts, there is no eternal splendor, and what has not completely fallen may rise again. What's important is the wisdom and ambition to move toward higher elevations.
The ancient city of London has once again dragged itself to the global pinnacle by dint of its advantageous geographical location on the threshold of Europe, its background of financial traditions and its modern policy of openness. London's transformation has served to profoundly enlighten Taiwan, an economy likewise intimately linked with the sea.
Translated from the Chinese by Brian Kennedy