Foreign direct investment accounts for more than a quarter of London’s economy, with more than half a million people working for foreign-owned companies, according to a report by Think London, the foreign direct investment agency for the capital.

The survey found that FDI contributes £52bn and that foreign-owned firms were responsible for 42% of London’s economic growth between 1998 and 2004.

“Foreign direct investment is vital to London and is destined to become even more important as the pace of globalisation continues,” said Michael Charlton, chief executive of Think London. “To capitalise on this trend, we must retain and build on London’s competitiveness as FDI companies are continually re-evaluating their presence here.”

Professor John Quelch, senior associate Dean at Harvard Business School said if London constantly evaluates its offering it can “increase its share of foreign investment”.