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Ageing infrastructure and the high cost of living are the biggest barriers to London's continued competitiveness, according to the capital's businesses.
The London Boardroom Barometer, a survey of 150 CEOs and senior partners at leading London firms, found more than three-quarters (79%) of firms said better surface transport infrastructure was critical in making London more competitive.
Improved housing supply (54%), workforce education (43%) and air transport infrastructure (37%) were also high on the businesses agenda in the research, conducted for business group London First and Deloitte.
Almost four out of five (71%) said the cost of living in London and the south-east is a barrier to hiring a suitably skilled workforce.
Despite this, 86% said they were 'absolutely committed' to remaining in the capital.
Only 1% said they were quite likely to leave by 2020.
Air support
Businesses expressed strong support – 83% in favour – for increasing the airport capacity of the capital but there were mixed feelings on where this should happen.
The expansion of Heathrow was supported by 49% of respondents, followed by 36% who backed a second runway at Gatwick.
Over two-thirds of businesses felt more direct flights to emerging markets would have a positive impact.
Half (48%) felt it would lead to more inbound investment, a benefit highlighted noticeably more by larger companies, while 37% said it would make it easier to sell goods and services to emerging markets.
EU backing
Companies in London were also very clear in their support for Britain remaining in the EU.
Over 80% of companies said Britain should remain in the EU, although 34% want the ability to opt-out of certain regulations that the government felt were not in the country's interest.
Only 7% felt Britain should leave the EU with a further 10% unsure of their position at this time.
When considering other barriers to hiring a suitably skilled workforce, 42% of companies cite an insufficient number of people with high-level specialist skills as a barrier to recruitment, with a further 38% sharing concerns about the quality of basic education. This is particularly concerning given that London employs close to 1.5 million people in high skill sectors, more than any other city in the world, according to research from Deloitte earlier this year.
Angus Knowles-Cutler, London senior partner at Deloitte, said: “This report delivers a very clear message. London is a magnet for the world's biggest and best businesses but a number of very serious challenges must be tackled for this to remain the case.
“Global competition is increasing as the likes of Shanghai and Sao Paolo join traditional rivals like New York in seeking to appeal to today's cosmopolitan workforce. London can't afford to allow the next generation to be priced out of living and working in this city, or be put off by perceptions of ageing infrastructure.”
Baroness Jo Valentine, chief executive of London First, said: “when it comes to EU membership, businesses couldn't be clearer on what would be best for London and the wider economy. But there is a lot of scepticism about the status quo. The government should redouble its efforts to make the single market more effective, both within the EU and to bolster the EU's competitiveness with the rest of the world.
“Crossrail 2 was top of businesses' wish lists in terms of transport, which puts them right in line with the general public – 95% of whom recently gave their support in TfL's consultation on the new line,” she said.
“Crossrail 2 is essential to keep London moving as the capital's population rises to 10 million people by 2030. Without it, congestion on our tube and rail lines will become unbearable. It's time for the Mayor to take this support and drive the new line from concept to reality.”
Notes
The London Business Barometer was conducted by independent research firm bdrc continental. It consisted of 150 interviews with CEOs or senior partners at firms across London, conducted between 10th and 31st October 2013.”