1. 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

2. West London – boroughs of Hammersmith and Fulham, Hillingdon, Hounslow, Harrow, Brent and Ealing

3. 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.

4. 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.

5. Standard Deviation of Sub-Regional GDP per Capita for UK Regions

7. Gross Weekly Pay (Workplace Based) 2003 Source: New Earnings Survey

8. Employment by Sector (as a proportion of total employment) Source: Annual Business Inquiry

9. Employment by Sector (as a proportion of total employment)

10. Employment Growth (Compound Annual Growth Rate) 1998-2002 West London Air transport6.0% Hotels and restaurants5.2% Real estate activities5.1% Recreational, cultural and sporting4.7% Other service activities3.7% Manufacture of other transport equipment3.6% Education3.4% Source: Annual Business Inquiry

11. Proportion of Total Employment in High-Tech Manufacturing Source: Annual Business Inquiry

12. Proportion of Total Employment in High-Tech Services Source: Annual Business Inquiry

13. Employment (as a proportion of total employment) in selected service sectors Area Business/management consultancy Digital Media IT and Communication Buckinghamshire2.6%5.5%5.3% Surrey1.6%6.0%5.9% London Central2.4%6.0%4.0% London East1.3%4.0%4.1% London North0.8%3.3%3.0% London South1.7%4.5%4.3% London West1.2%7.6%4.4% Thames Valley1.4%11.8%12.5% Source: Annual Business Inquiry

14. Employment within Knowledge-Based Businesses

15. Source: SEEDA

16. 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.

17. 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.

18. Concluding Remarks  In order to develop the west London economy, the sub-region should also seek to integrate itself more with its surrounding sub- regional 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 sub- regions, 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.