Ian Barlow has more reason than most to feel pleased about London’s
successful Olympic bid. Spectating opportunities aside, as the newly-appointed
chairman of Think London, the capital’s official foreign direct investment
agency, he’s confident the games will add a real boost to London’s business
To be fair, as business hubs go, the city of London already packs a punch. As
the UK’s economic engine, its £162bn economy accounts for 17% of the UK’s GDP.
It boasts the headquarters of more than 100 of Europe’s 500 largest companies,
and London’s foreign exchange market is the largest in the world, with an
average daily turnover of $504bn – more than New York and Tokyo combined.
But Barlow admits there’s no room for complacency. ‘We worry because the
government takes London’s success too much for granted.’ Encouraging home-grown
entrepreneurial talent is only part of the story.
That’s where Think London comes in. Its remit is to promote London to
business audiences worldwide and offer free advice, connections and practical
help to companies looking to set up shop in the capital.
Think London’s budget currently stands at around £4m, of which £3m comes from
Ken Livingstone’s London Development Agency and the rest from business. ‘At the
moment we have 460 active projects on the go – companies we’re talking to at
various stages, from those expressing a vague interest to ones already setting
up. Last year we completed projects with 280 companies, created 4,000 new jobs
and safeguarded another 600.’
So far success stories have had a distinctly US flavour – currently 40% of
completed projects stem from across the pond, although Barlow is at pains to
stress that interest from Asia Pacific, particularly China, is growing.
‘It’s about acting as a sounding board and a guide for them to set up in the
UK. They might ask if we know any good lawyers, or where they should have their
And advice on accountancy firms? The 53-year-old accountant plays down any
suggestions of a conflict of interest with his full-time job, that of senior
London partner for KPMG. But the crossover is hard to ignore. ‘I represent KPMG
in London. It’s a figurehead role. I don’t actually manage anything, but I spend
about half of my time leading client accounts and managing relationships.’
He will go as far as to say that the prosperity of London is vital to KPMG’s
business. And a central tenet of both roles is ensuring all the right things are
done to increase London’s viability and success. ‘KPMG doesn’t get much direct
business from my involvement in Think London,’ Barlow maintains. ‘If they’re big
companies, they probably already have existing advisers. If they’re smaller,
they will probably want to use a smaller firm.’
Barlow, who was appointed chairman on 1 August, was handed the Think London
role at a challenging time. On the one hand, the increasing globalisation of
business is boosting opportunities for inward investment. Think London’s
40-strong team will soon move into offices in Canary Wharf and is opening
offices in New York, Beijing and California.
But the threat of terrorism hanging over London is impossible to ignore. So
far it has failed to dampen spirits and Barlow is keen to downplay the impact on
London’s appeal as a place to do business.
‘Bombings are affecting tourism, particularly from North America. Visitor
numbers dropped 30% after 9/11 and even before the 7 July this year, I’m not
sure they’d recovered,’ he says. ‘We are worried it could affect business
visitor numbers for conference and meetings and we’re concerned that it might
put people off investing over here. But there’s no evidence of that so far.’
Competition is tough. Paris may have lost out on the Olympics, but in inward
investment terms, the battle has only just begun.
Resisting the temptation to gloat over London’s Olympic win, Barlow is
confident of the long-term business benefits of the event. ‘The whole point is t
o regenerate the Lower Lea Valley. The legacy will be a vibrant community with
improved transport links that will be attractive to medium-sized businesses.
It’s another plank in our competitive edge.’
Terrorist threats may be grabbing all the headlines, but Barlow believes
other factors are more likely to compromise London’s ability to compete with
other European cities.
For one, there’s the frustration that London doesn’t benefit more from the
funds it generates itself. ‘Each year, London raises between £10bn and £20bn
more in tax than it spends and that money gets spent in other regions of the UK.
If we had more of that money, it would benefit us hugely,’ he says. ‘London is
the strongest brand the UK has and you always invest in your strongest brand.’
It’s an interesting frustration, bearing in mind Barlow’s Yorkshire roots.
But after graduating from Cambridge with a degree in engineering, Barlow joined
the throngs of adopted Londoners, first as an audit trainee with KPMG and
subsequently moving up the ranks at the Big Four firm over the course of the
past 30 years or so.
If anything, it is the issues of transport and education that he pinpoints as
the capital’s biggest constraints to success. Using his clout as chairman of
Think London, and with KPMG a principal sponsor of business lobby group London
First, Barlow is pushing hard for ongoing development of the capital’s public
transport infrastructure, and in particular the Crossrail link.
First touted in 2001, Crossrail is a 50/50 joint venture between Transport
for London and the Department for Transport, to develop vital transport links
across the southeast of England and tackle a public transport system buckling
under the strain of 600 million passengers every year.
If it goes ahead as planned, it will provide critical links across London
running from Paddington, Stratford and the Docklands as well as joining west and
east London with a link to Heathrow terminal 5.
‘We have to keep increasing the capacity of London’s public transport system
as the population increases, or that’s a real turnoff for inward investment.
Transport for London is making good progress on the tube but Crossrail would
provide a 15% increase in capacity.’
The bill to introduce Crossrail went through its second reading in the House
of Commons in July, and will pass to a select committee in the autumn for a
The skills base of the capital is another major gripe, and Barlow certainly
doesn’t hold back in his criticism: ‘We don’t think the government policy on
training and job opportunities is good enough.’
Barlow takes particular issue with the way that the Learning and Skills
Council, the body responsible for funding post-16 education and training,
manages the process.
‘They’re churning out people with skills not fit for purpose – £1.4bn is
being spent in that area and business doesn’t think it’s money well spent. For
example, 8,000 people have come out with some sort of qualification in equine
studies and there are only 40 or 50 jobs in that area. The system sees the
students as its customers, but businesses are customers too.’
The answer, according to Barlow, is for the Learning and Skills Council to
report, not to the DFES and the DTI, but instead to the London Development
Agency, with a new more business-focused brief.
In short, if Barlow were to write a school report for London’s business
attractiveness, it would probably read: ‘Is doing fine. Could do better.’ But
faults aside, he admits that London has stolen his heart. Now a resident of
Chelsea, it’s the variety of the capital that he loves, in particular the
theatre, cinema and restaurants. He’s also a big fan of the city’s architecture,
in particular some of the modern buildings now gracing the landscape.
‘Iconic buildings springing up like the Swiss Re Gherkin are tremendous.
Rather than preserve historic facades, we should be bolder,’ he says. Barlow
sits back and gazes out over the City skyline from his seventh floor office.
‘Mind you, I hate the London Eye.’
Even though the vast majority of organisations surveyed by the CBI earlier
this year said London was an attractive location for business, the study
revealed a complex combination of business opportunities and challenges.
Not only did almost 90% say the cost of living is considerably higher than
other major capital cities, but more than a quarter said the capital’s transport
infrastructure was in a poor state, dogged by patchy quality and reliability.
One in three said the congestion charge had added to costs or led to loss of
customers and suppliers.
The lack of suitable housing as a barrier to recruitment and retention was
cited by almost three quarters of businesses. And skills shortages continue to
plague almost half of respondents.
Crime and security continue to taint London’s image and are a concern for
more than half of respondents – but even though the majority have taken steps to
deal with possible emergency incidents, less than half have tested their plans.
But at least 65% of businesses expect the successful 2012 Olympic Games bid
to boost economic activity. Only 17% feel it is an unnecessary cost.