Factors Affecting the Economic Potential of West London
Robert Huggins
Enterprise and Regional Development Unit
The Management School
University of Sheffield
r.huggins@sheffield.ac.uk
M1
M11
West London – boroughs of Hammersmith and Fulham,
Hillingdon, Hounslow, Harrow, Brent and Ealing
Hertfordshire
Buckinghamshire
Essex
M25
M40
Oxfordshire
London
West London
West
M4
Greater London
Berkshire
M20
M3
Surrey
Hampshire
Kent
West London - Some Perceived Strengths
 Heathrow - the world’s busiest international airport - excellent export
and import access through its international connectivity.
 A significant creative industries cluster, embodied by the BBC
studios and surrounding audio-visual cluster in White City and Park
Royal.
 West London is home to some of the biggest blue chip organisations
in the world, many of which have their headquarters located there.
These include GlaxoSmithKline - Diageo - Cisco - British Airways IBM - BBC - United Biscuits - BSkyB - Kodak - Bechtel - Carphone
Warehouse.
 A significant concentration of employment within the transport and
logistics sector, particularly within air transport.
 The main road and rail links to all parts of Britain and particularly
between central London and the Thames Valley and the west of
England.
 Relatively strong skills base.
West London - Some Perceived Weaknesses
 West London lags behind the rest of London in terms of
per capita output – approximately 9% lower.
 A higher unemployment rate than the UK average and
relatively high levels of long-term unemployment - over
one in every four claimants within Brent has been
claiming benefit for one year or more.
 Business start-up rates in west London lag the regional
average by some way – there has been a large
differential since the late 1990s.
 Localities with significant multiple deprivation.
 West London is perceived to have suffered as a result of
East London’s development, which has been boosted
by the of the Docklands area and the financial
businesses on its western fringe.
Standard Deviation of Sub-Regional GDP per Capita for
UK Regions
Gross Weekly Pay (Workplace Based) 2003
£800
£721
£678
£700
£578
£564
£476
£512
£497
South London
£500
£550
North London
£600
£589
£400
£300
£200
£100
Source: New Earnings Survey
Thames Valley
West London
East London
Central London
Surrey
Buckinghamshire
Great Britain
£0
21%
20%
13%
5% 4%
Source: Annual Business Inquiry
6%
Other services
1% 0%
26%
25%
Public
administration,education
& health
20%
Banking, finance and
insurance, etc
0%
8%
Transport and
communications
5%
Great Britain
West London
Distribution, hotels and
restaurants
10%
Construction
15%
Manufacturing
25%
Energy and water
30%
Agriculture and fishing
Employment by Sector (as a proportion of total employment)
25%
18%
14%
5%
7%
1% 0%
0%
0% 0%
0% 0%
5%
3%
21%
20%
15%
6%
8%
Other services
23%
Public
administration,education
& health
London
West London
Banking, finance and
insurance, etc
8%
Transport and
communications
25%
Distribution, hotels and
restaurants
10%
Construction
Manufacturing
30%
Energy and water
35%
Agriculture and fishing
Employment by Sector (as a proportion of total employment)
32%
26%
21%
18%
14%
7% 7%
4%
Employment Growth (Compound Annual Growth Rate) 1998-2002
West London
Air transport
6.0%
Hotels and restaurants
5.2%
Real estate activities
5.1%
Recreational, cultural and sporting
4.7%
Other service activities
3.7%
Manufacture of other transport equipment
3.6%
Education
3.4%
Source: Annual Business Inquiry
Proportion of Total Employment in High-Tech Manufacturing
2.6%
Thames Valley
1.5%
London West
London South
1.1%
London North
1.1%
0.5%
London East
0.3%
London Central
2.0%
Surrey
3.9%
Buckinghamshire
2.1%
Great Britain
Source: Annual Business Inquiry
0%
1%
2%
3%
4%
5%
Proportion of Total Employment in High-Tech Services
Thames Valley
26.6%
London West
18.5%
19.9%
London South
London North
14.5%
London East
38.5%
26.4%
London Central
Surrey
22.6%
Buckinghamshire
18.4%
15.2%
Great Britain
0%
Source: Annual Business Inquiry
10%
20%
30%
40%
50%
Employment (as a proportion of total employment) in selected service
sectors
Business/management
consultancy
Digital
Media
IT and
Communication
Buckinghamshire
2.6%
5.5%
5.3%
Surrey
1.6%
6.0%
5.9%
London Central
2.4%
6.0%
4.0%
London East
1.3%
4.0%
4.1%
London North
0.8%
3.3%
3.0%
London South
1.7%
4.5%
4.3%
London West
1.2%
7.6%
4.4%
Thames Valley
1.4%
11.8%
12.5%
Area
Source: Annual Business Inquiry
Employment within Knowledge-Based Businesses
Dacorum
Dacorum
Watford
WatfordHertsmere
Hertsmere
Three
Three Rivers
Rivers
Chiltern
Chiltern
South
South Oxfordshire
Oxfordshire
St.Albans
St.Albans
Wycombe
Wycombe
Hillingdon
Hillingdon
Harrow
Harrow
Barnet
Barnet
Brent
Brent
South
South Bucks
Bucks
Ealing
Ealing
Hammersmith
Hammersmith and
and Fulham
Fulham
Windsor
Windsor and
and Maidenhead
Maidenhead
Newbury
Newbury
Wokingham
Wokingham
Hounslow
Hounslow
Spelthorne
Spelthorne
Bracknell
Bracknell Forest
Forest
Elmbridge
Elmbridge
Epsom
Epsom and
and Ewell
Ewell
Woking
Woking
Basingstoke
Basingstoke and
and Deane
Deane
Hart
Hart
Rushmoor
Rushmoor
% employment within
knowledge-based businesses
27.1 to 77.7
21.9 to 27.1
15.4 to 21.9
5.5 to 15.4
Guildford
Guildford
Reigate
Reigate and
and Banstead
Banstead
Mole
Mole Valley
Valley
Source: SEEDA
West London – Economic Structure
 West London is largely differentiated from other neighbouring sub-regional
economies due to its high level of employment in transport and
communications, and the distribution, hotels & restaurants sector.
 West London employs a small proportion of its workforce (in comparison
with neighbouring sub-regions) within banking, finance and insurance.
 It also has a relatively small proportion of employment in public sector
activities, compared with surrounding areas.
 West London possesses a real strength in the digital media sector.
However, comparing west London with the Thames Valley we find that there
is a considerable differential in IT and communications sector (which
includes software development) employment.
 West London is under-represented in comparison with a number of its
neighbours in the business and management consultancy sector. Only north
London has a lower proportion of its employment within this sector.
Growth Constraints
 Perhaps a key constraint to business growth in west London is the apparent
lack of economic connectivity with neighbouring areas such as Central
London and the Thames Valley.
 It has an obvious strength in the transport and communications sectors, but
lacks a critical mass of other tradable specialisms in the knowledge-based
sectors (with the exception of the creative industries).
 Business start-up rates in west London lag the regional average, and are
not occurring in those sectors that have a high growth potential.
 There is little evidence that current business support mechanisms are
creating the level of business growth required in west London, particularly
for high value-added businesses, where market failures are often more
difficult to address.
Concluding Remarks
 In order to develop the west London economy, the sub-region
should also seek to integrate itself more with its surrounding subregional economies.
 Whilst the Thames Valley, Surrey, Buckinghamshire and Central
London have a large density of knowledge-based employment, the
same cannot be said of west London – which is wedged between
these sub-regions.
 The proximity of central London, as well as its proximity to the
Thames Valley and other high-performing South East England subregions, means that West London is within the centre of the UK’s
most competitive regions.
 Given its location and transport links, west London has an
opportunity to capitalise upon the opportunities on offer as a result of
its location by increasing interaction and acting as a ‘bridge’
between central London and the Thames Valley.