The world is an increasingly connected place, and I wrote recently about a new Deloitte paper that set out to find the most connected cities in the world.  It shows that London is home to over 1/3 of all European Fortune 500 companies, and has three times more corporate headquarters than any other city in Europe.

A similar study has been undertaking by the CORPNET group of researchers based out of the University of Amsterdam.  This has manifested itself in a recent paper that explores the global movers and shakers in terms of a network.

Networked executives

Just as with the Deloitte study, the paper reveals the central role London plays in the network of global movers and shakers.  Interestingly, London is not alone, with a number of other British cities also playing a key role, albeit with a decent amount of spillover resulting from their proximity to London.

The city was not only the gateway between the UK and the rest of the world, but also a strong connector between the rest of Europe and the United States and the Commonwealth.

London also exhibited an exceptionally strong ‘self-loop’, with many firms in the city interlocked with one another, thus creating incredibly strong ties.  The authors suggest that such self-loops are indicative of the power breakdown in a network.

When using these self-loops as a lens to examine the British network, it does highlight the otherness of London as it stands separate from the rest of the UK.  Indeed, taking London out of the network significantly weakens the regional communities that are evident in the rest of the country.

A fragile unity

The analysis suggests a fragility to any unity in corporate Britain, with a distinctly regional flavor to things marked by the connecting power of London.  It will be fascinating to see how these networks evolve as a result of the decision by Britain to leave the European Union.

The fragile nature of London’s position as a leading global city was something that was emphasized in the Deloitte research.  It reveals a number of challenges that London, and other global cities, will need to tackle if this is to be addressed:

• rising inequality – and particularly the ‘hollowing out’ of jobs in the middle of the labor market
• cost of living – the cost of living in global cities such as London is increasingly making it difficult for newcomers
• lack of flexibility – with few firms actively embracing flexible working
• complexities of immigration – and in particular tightening labour rules

“Although the recent growth in London’s employment and economic output marks the capital as a leading global city, the reality is that unless these challenges are tackled, it will become increasingly difficult to sustain this growth, and London’s influence will decline,” the authors warn.

Time will tell just how successful they are.