London Business Survey 2014: Foreign Ownership
Capitalising on last year’s innovative London Business Survey (LBS), which provided a unique insight into the issues affecting business owners and managers in the capital, the GLA Economics team has been looking at the LBS’ findings more closely to gain insights into the nature of foreign business ownership in London.
What do we know about foreign-owned businesses in London?
At the time of the survey in mid-2014, roughly 8% of all business units in London were foreign owned (or in joint UK and foreign ownership). Perhaps most interestingly, almost a quarter of all business units in large firms in London were foreign owned! In contrast, a smaller proportion of foreign-owned business units (61%) were in microbusinesses (with fewer than 10 employees) compared to those that were UK-owned (82%).
In which sectors do they operate?
The financial and insurance sector had the highest share of foreign-owned business units (25%), followed by the retail (19%) and wholesale (16%) sectors.
How do they rate London as a place to do business?
More than 7 out of 10 foreign-owned businesses in the capital rated London highly for the following factors: international/diverse environment, the availability of skilled staff and proximity to businesses and customers. UK-owned businesses rated the same factors highly as well.
Similarly, London’s foreign-owned and UK-owned businesses rated the capital less positively in terms of housing affordability and cost of living, although slightly fewer foreign-owned businesses rated London poorly in this regard, compared to UK-owned businesses.
What are their activities and plans for the future?
While it was not possible to assign employment, turnover and sales figures to foreign-owned business units in London, the LBS does allow us to make some broad observations about London’s foreign-owned businesses’ activities and plans for the future. Broadly speaking, London’s foreign owner firms tend to be ambitious, with around 85 per cent of foreign-owned business units saying that they were planning to grow in the next 12 months from mid-2014.
In terms of innovation and investment, foreign-owned and UK-owned business activity was broadly the same, with around a half of foreign-owned businesses actively engaged in innovation, and a similar share reporting to have made investments in innovation.
Foreign-owned businesses experience in accessing external finance also appears positive. Around 85 per cent of the fourteen thousand foreign-owned business units attempting to access external finance in the year to mid-2014 reported that they had been successful.