Technology is 'key' to London's future, shows CBI survey

Mayor's office tells government that returning certainty to the business world is critical

The technology sector has been named as 'crucial' to London's business future by the Confederation of British Industry (CBI) and CBRE Group.

With the UK's economic future still clouded by Brexit uncertainty, firms responding to the latest London Business Survey said that the tech and creative industries will be key to the capital's prosperity.

88 per cent of London's businesses, whether small or large, employ staff from the European Union, leaving 73 per cent of respondents to say that uncertainty over the country's role in Europe was their top business concern. Almost a third are considering moving parts of their operations to other countries in the European Union; and more than half - 55 per cent - think that the UK should prioritise securing unconstrained access to the single market.

Confidence is still very low: only 10 per cent of respondents feel more confident about the economy over the next six months, and 16 per cent are more optimistic about their business prospects (compared to 19 per cent and 26 per cent, respectively, in the previous survey).

Despite that, 91 per cent of respondents still consider London 'a good place to do business', making it important for the government to help certainty to return to markets. More than half (60 per cent) of firms plan to expand in the next 12 months, and more plan to increase their head count (39 per cent) than make redundancies (23 per cent).

After the tech and creative industries, which two-thirds of respondents said were important, professional services (49 per cent) and FinTech (47 per cent) were named as critical.

More than 60 per cent of businesses told the CBI that they are preparing a strategy to address skill shortages that are likely to occur if restrictions are placed on EU nationals working in the UK. Digital knowledge is the skill agreed to be the most lacking among the current workforce, named by 32 per cent of firms.

"It's clear Brexit is weighing heavily on minds in the capital...so it's absolutely vital that substantive progress is achieved during the Brexit negotiations and that comprehensive, time-limited transitional arrangements are agreed with all urgency," said Eddie Curzon, director of CBI London. "Our businesses need to make decisions now about investment and employment that will affect economic growth and jobs in the future. London - and the country as a whole, which benefits from a flourishing capital - needs the best business environment in which to grow, create jobs and boost prosperity."

The Deputy Mayor of London for Business, Rajesh Agrawal, said, "The Mayor and I have been clear with the Government that they need to get on with spelling out what they want from a transitional deal with the EU, to provide some certainty and give themselves enough time to properly negotiate the UK's new relationship with the EU."