World City Guide

Business

Business Profile
At £162 billion, London's economy accounts for 17% of the UK's GDP. Known as ‘the City’, the square mile located on the eastern side of central London, the City of London, is the epicentre of British financial life and one of the world’s leading international financial centres. It boasts an impressive concentration and variety of banks, insurance companies and other business services. In fact, financial and business services throughout London employ around a third of the Greater London workforce. Over the last few years, the British government has delegated greater responsibility to the Bank of England (website: www.bankofengland.co.uk), while the London Stock Exchange (website: www.londonstockexchange.com) has floated itself.

However, the City and the stock market in particular suffered badly in 2002, continuing into 2003. The September 11 terrorist attacks and the war in Iraq have had an impact on investor confidence and the stock market has reached a six-year low. Major companies seem to be feeling the pinch, which has a knock-on effect on jobs. Beyond the financial heart of London, law, computing, design, media, arts and fashion are all struggling to avoid the global slump, with the advertising sector being worst hit.

After a record year for tourism in 2000, the Foot and Mouth epidemic and the September 11 terrorist attacks hit the industry badly in 2001. Tourists, however, came back to London in 2002 and in 2003, despite the war in Iraq, 28 millions visited the capital. London accounts for just under 50% of all overseas visits to the UK (11.6 million in 2002, with direct visitor expenditure equalling £5.8 billion). The tourism sector employs approximately 350,000 people, accounting for 10% of all jobs in London.

London is Europe's most successful city at attracting overseas companies, and there are currently 13,510 overseas owned companies from 92 countries in the capital. The list of companies based in London is almost endless as most major international companies have offices here, including IBM, Sun Microsystems and Warburgs. London in the 1980s and 1990s saw a decline in production and manufacturing jobs and a growth in the service sector. However, strengths remain in modern product-based manufacturing (specialist firms producing niche products) and high-tech companies. New light industry parks have sprung up out of town, although many businesses (such as computing) still prefer to stay closer to the City. For the more fashionable industries, such as media and design, a West End address is the most sought after, especially one in Soho. To the east of the City, the Docklands has come of age and is now a credible and popular business location with good public transport links and modern office complexes. The centrepiece is Canary Wharf, Britain’s tallest building, which has been joined recently by two neighbouring skyscrapers. A stone's throw away from Canary Wharf, the state-of-the-art ExCel is increasingly giving traditional conference venues a run for their money, with the world’s largest travel exhibition, World Travel Market, now calling ExCel home.

Unemployment in Greater London is low by European standards but slightly higher than the UK average at 6.6% (2002 annual rate) compared to a national average of 5.2% (2002 annual rate).

Business Etiquette
Business hours are officially Monday to Friday 0900 or 0930 until 1700 or 1730, although in practice many companies have much longer hours. Business in London is intense and fast paced. Extended business lunches and post-work drinks were regarded as part of the modern working environment until relatively recently. Nowadays, the emphasis is increasingly on hard work and long hours. Some older establishments could be strictly formal, however, meetings are (as a rule) relatively relaxed and first names are often used after the initial introduction. However, British businesspeople are unlikely to be overtly demonstrative – hand gestures and the use of expressive body language will be minimal and apart from shaking hands, physical contact should be avoided. Standard dress code is a suit and tie for men and a suit (or equivalent) for women but varies greatly depending on the company, with those in the new technologies sectors especially tending towards informality.