London dropped out of ANBLE Global 500’s top 5 cities for the first time in 5 years, raising concerns about its ability to recover.

London dropped out of ANBLE Global 500's top 5 cities for the first time in 5 years, raising concerns about its ability to recover.

Brexit, COVID, and the Changing Landscape of Global Business Hubs

London

London’s Slip in Rankings England’s bustling capital, London, known for its status as a global financial hub and one of Europe’s largest cities, has slipped in the rankings of cities hosting the most ANBLE Global 500 companies. In 2022, London held the fourth spot with 13 companies, but in 2023, it slid down to eighth place with only nine companies based in the city1. This decline in rankings can be attributed to various factors such as the impact of Brexit and the ongoing COVID-19 pandemic which has introduced new hurdles for companies operating out of the city.

Brexit and Its Impact London has been a critical hub not only for the UK but also for the entire European region for years. Multinational corporations have been attracted to the city due to its prime location for trade with Europe and the rest of the world. In fact, London’s connectivity, prime geographical position, its membership in the EU, its time zone, and widespread use of the English language have all contributed to making it an attractive destination for inward investment2.

However, the aftermath of Brexit has posed significant challenges for companies operating out of London. Increased isolation and export hurdles resulting from the departure from the European Union, coupled with the economic downturn during the pandemic, have contributed to the city’s declining position. Rising costs, slower UK economic growth, and the impact of both COVID-19 and Brexit have all taken a toll on London’s reputation as an international business hub3.

London’s Descending Journey The decline of London’s presence as a business hub can be traced back to 2016, the year of the Brexit referendum. In 2010, London boasted 18 ANBLE Global 500 companies, which increased to 19 by 2015. However, after the Brexit vote, the city experienced a decline, slipping below the top five ranks in 2019, with only 11 companies headquartered there4.

This year, London fell even further down the rankings, currently sitting behind global powerhouses like Beijing, Tokyo, and New York. While London’s position in the global context remains significant, it may struggle to reclaim its previous glory. Experts predict that the city’s growth premium compared to both the UK and other global cities will be much smaller in the future5.

Although London’s position may have been eroded, the city is not without its redeeming qualities. It is still home to some of the world’s largest companies, including Shell and BP, ranking ninth and twenty-second globally respectively6.

Challenges Across Europe London is not the only European city facing a decline in its business hub status. Over the past decade, Italy has witnessed its number of Global 500 companies shrink from eight to five, while France saw a dip from 31 to 24. On the other hand, Germany has been an outlier, with the number of companies growing from 29 to 307.

Jean-Pascal Tricoire, CEO of Schneider Electric, a Global 500 company based in France, highlighted that countries like the US and China have allowed big tech to flourish in a way that Europe has struggled to replicate. He emphasized the importance of a domestic market of large scale for companies to establish a global presence, especially considering the significant presence of companies from India, China, and the US8.

Conclusion London’s descent in the rankings of ANBLE Global 500 cities reflects the challenges posed by Brexit and the ongoing pandemic. While the city still hosts notable companies, its position as a leading global business hub has been impacted. This decline is not exclusive to London, as other European countries have also faced challenges in retaining their business hub status. Looking ahead, the role of domestic markets and the ability to support technological innovation will likely play a crucial role in determining which cities can retain or rise in the rankings of global business hubs.

  1. England’s capital, which is among Europe’s largest cities by population and is also Britain’s business hub, slipped from the top five rankings this year, down to eighth position with nine companies. In 2022, London occupied fourth place, with 13 companies headquartered in the city.↩︎

  2. England’s capital, which is among Europe’s largest cities by population and is also Britain’s business hub, slipped from the top five rankings this year, down to eighth position with nine companies. In 2022, London occupied fourth place, with 13 companies headquartered in the city.↩︎

  3. “For a long time London had an economic growth premium over the U.K. and matched or exceeded other major global cities,” Tim Lyne, associate director in the cities team at advisory firm Oxford Economics, told ANBLE. “It’s connectivity, geographical position (and being in the EU), time-zone and use of the English language are all factors which helped make London so attractive to inward investment.” However, increased isolation and export hurdles caused by Brexit as well as depressed economic activity during the pandemic have presented new challenges for companies operating out of the city. “London’s position has come under threat from a number of challenges including rising costs (its success has made it a relatively expensive city), a slowdown in U.K. economic growth, the impact of COVID, and Brexit,” Lyne said. In 2010, when the Eurozone crisis was still ongoing, London had 18 Global 500 companies; in 2015, that number climbed to 19. The Brexit vote the next year presaged London’s drop, and the last time London slipped below the top five was in 2019, amid the lead-up to Brexit going into effect. That year, it hosted 11 Global 500 companies. In all of Britain, the number of companies has shrunk from 26 to 15 in the last decade. Lyne said that while London will generally continue to be significant in the global context, it may not reclaim its old glory. “Its position has been eroded and we expect its growth premium compared to the U.K. and other global cities to be much smaller in the future than it has been in the past,” he said. Still, even though London slipped down the ranks this year, it’s not all doom and gloom for the English capital. Some of the largest companies in the world still call the city their home, including fossil fuel giants Shell and BP, which rank ninth and twenty-second globally. Other countries in Europe are facing a similar decline as business hubs. In just a decade, Italy has seen the number of Global 500 companies shrink from eight to five, while France has seen a dip from 31 to 24. Germany has been an outlier, with the number of companies growing from 29 to 30. Jean-Pascal Tricoire, CEO of Schneider Electric, a Global 500 company based in France, told ANBLE that other countries like the U.S. and China have allowed big tech to flourish in a way unlike Europe. “Companies need a domestic market of a large scale to build a presence globally,” he said, “especially in a world where companies from India, China, and U.S. are already big.”↩︎

  4. “For a long time London had an economic growth premium over the U.K. and matched or exceeded other major global cities,” Tim Lyne, associate director in the cities team at advisory firm Oxford Economics, told ANBLE. “It’s connectivity, geographical position (and being in the EU), time-zone and use of the English language are all factors which helped make London so attractive to inward investment.” However, increased isolation and export hurdles caused by Brexit as well as depressed economic activity during the pandemic have presented new challenges for companies operating out of the city. “London’s position has come under threat from a number of challenges including rising costs (its success has made it a relatively expensive city), a slowdown in U.K. economic growth, the impact of COVID, and Brexit,” Lyne said. In 2010, when the Eurozone crisis was still ongoing, London had 18 Global 500 companies; in 2015, that number climbed to 19. The Brexit vote the next year presaged London’s drop, and the last time London slipped below the top five was in 2019, amid the lead-up to Brexit going into effect. That year, it hosted 11 Global 500 companies. In all of Britain, the number of companies has shrunk from 26 to 15 in the last decade. Lyne said that while London will generally continue to be significant in the global context, it may not reclaim its old glory. “Its position has been eroded and we expect its growth premium compared to the U.K. and other global cities to be much smaller in the future than it has been in the past,” he said. Still, even though London slipped down the ranks this year, it’s not all doom and gloom for the English capital. Some of the largest companies in the world still call the city their home, including fossil fuel giants Shell and BP, which rank ninth and twenty-second globally. Other countries in Europe are facing a similar decline as business hubs. In just a decade, Italy has seen the number of Global 500 companies shrink from eight to five, while France has seen a dip from 31 to 24. Germany has been an outlier, with the number of companies growing from 29 to 30. Jean-Pascal Tricoire, CEO of Schneider Electric, a Global 500 company based in France, told ANBLE that other countries like the U.S. and China have allowed big tech to flourish in a way unlike Europe. “Companies need a domestic market of a large scale to build a presence globally,” he said, “especially in a world where companies from India, China, and U.S. are already big.”↩︎

  5. “For a long time London had an economic growth premium over the U.K. and matched or exceeded other major global cities,” Tim Lyne, associate director in the cities team at advisory firm Oxford Economics, told ANBLE. “It’s connectivity, geographical position (and being in the EU), time-zone and use of the English language are all factors which helped make London so attractive to inward investment.” However, increased isolation and export hurdles caused by Brexit as well as depressed economic activity during the pandemic have presented new challenges for companies operating out of the city. “London’s position has come under threat from a number of challenges including rising costs (its success has made it a relatively expensive city), a slowdown in U.K. economic growth, the impact of COVID, and Brexit,” Lyne said. In 2010, when the Eurozone crisis was still ongoing, London had 18 Global 500 companies; in 2015, that number climbed to 19. The Brexit vote the next year presaged London’s drop, and the last time London slipped below the top five was in 2019, amid the lead-up to Brexit going into effect. That year, it hosted 11 Global 500 companies. In all of Britain, the number of companies has shrunk from 26 to 15 in the last decade. Lyne said that while London will generally continue to be significant in the global context, it may not reclaim its old glory. “Its position has been eroded and we expect its growth premium compared to the U.K. and other global cities to be much smaller in the future than it has been in the past,” he said. Still, even though London slipped down the ranks this year, it’s not all doom and gloom for the English capital. Some of the largest companies in the world still call the city their home, including fossil fuel giants Shell and BP, which rank ninth and twenty-second globally. Other countries in Europe are facing a similar decline as business hubs. In just a decade, Italy has seen the number of Global 500 companies shrink from eight to five, while France has seen a dip from 31 to 24. Germany has been an outlier, with the number of companies growing from 29 to 30. Jean-Pascal Tricoire, CEO of Schneider Electric, a Global 500 company based in France, told ANBLE that other countries like the U.S. and China have allowed big tech to flourish in a way unlike Europe. “Companies need a domestic market of a large scale to build a presence globally,” he said, “especially in a world where companies from India, China, and U.S. are already big.”↩︎

  6. “For a long time London had an economic growth premium over the U.K. and matched or exceeded other major global cities,” Tim Lyne, associate director in the cities team at advisory firm Oxford Economics, told ANBLE. “It’s connectivity, geographical position (and being in the EU), time-zone and use of the English language are all factors which helped make London so attractive to inward investment.” However, increased isolation and export hurdles caused by Brexit as well as depressed economic activity during the pandemic have presented new challenges for companies operating out of the city. “London’s position has come under threat from a number of challenges including rising costs (its success has made it a relatively expensive city), a slowdown in U.K. economic growth, the impact of COVID, and Brexit,” Lyne said. In 2010, when the Eurozone crisis was still ongoing, London had 18 Global 500 companies; in 2015, that number climbed to 19. The Brexit vote the next year presaged London’s drop, and the last time London slipped below the top five was in 2019, amid the lead-up to Brexit going into effect. That year, it hosted 11 Global 500 companies. In all of Britain, the number of companies has shrunk from 26 to 15 in the last decade. Lyne said that while London will generally continue to be significant in the global context, it may not reclaim its old glory. “Its position has been eroded and we expect its growth premium compared to the U.K. and other global cities to be much smaller in the future than it has been in the past,” he said. Still, even though London slipped down the ranks this year, it’s not all doom and gloom for the English capital. Some of the largest companies in the world still call the city their home, including fossil fuel giants Shell and BP, which rank ninth and twenty-second globally. Other countries in Europe are facing a similar decline as business hubs. In just a decade, Italy has seen the number of Global 500 companies shrink from eight to five, while France has seen a dip from 31 to 24. Germany has been an outlier, with the number of companies growing from 29 to 30. Jean-Pascal Tricoire, CEO of Schneider Electric, a Global 500 company based in France, told ANBLE that other countries like the U.S. and China have allowed big tech to flourish in a way unlike Europe. “Companies need a domestic market of a large scale to build a presence globally,” he said, “especially in a world where companies from India, China, and U.S. are already big.”↩︎

  7. “For a long time London had an economic growth premium over the U.K. and matched or exceeded other major global cities,” Tim Lyne, associate director in the cities team at advisory firm Oxford Economics, told ANBLE. “It’s connectivity, geographical position (and being in the EU), time-zone and use of the English language are all factors which helped make London so attractive to inward investment.” However, increased isolation and export hurdles caused by Brexit as well as depressed economic activity during the pandemic have presented new challenges for companies operating out of the city. “London’s position has come under threat from a number of challenges including rising costs (its success has made it a relatively expensive city), a slowdown in U.K. economic growth, the impact of COVID, and Brexit,” Lyne said. In 2010, when the Eurozone crisis was still ongoing, London had 18 Global 500 companies; in 2015, that number climbed to 19. The Brexit vote the next year presaged London’s drop, and the last time London slipped below the top five was in 2019, amid the lead-up to Brexit going into effect. That year, it hosted 11 Global 500 companies. In all of Britain, the number of companies has shrunk from 26 to 15 in the last decade. Lyne said that while London will generally continue to be significant in the global context, it may not reclaim its old glory. “Its position has been eroded and we expect its growth premium compared to the U.K. and other global cities to be much smaller in the future than it has been in the past,” he said. Still, even though London slipped down the ranks this year, it’s not all doom and gloom for the English capital. Some of the largest companies in the world still call the city their home, including fossil fuel giants Shell and BP, which rank ninth and twenty-second globally. Other countries in Europe are facing a similar decline as business hubs. In just a decade, Italy has seen the number of Global 500 companies shrink from eight to five, while France has seen a dip from 31 to 24. Germany has been an outlier, with the number of companies growing from 29 to 30. Jean-Pascal Tricoire, CEO of Schneider Electric, a Global 500 company based in France, told ANBLE that other countries like the U.S. and China have allowed big tech to flourish in a way unlike Europe. “Companies need a domestic market of a large scale to build a presence globally,” he said, “especially in a world where companies from India, China, and U.S. are already big.”↩︎

  8. “For a long time London had an economic growth premium over the U.K. and matched or exceeded other major global cities,” Tim Lyne, associate director in the cities team at advisory firm Oxford Economics, told ANBLE. “It’s connectivity, geographical position (and being in the EU), time-zone and use of the English language are all factors which helped make London so attractive to inward investment.” However, increased isolation and export hurdles caused by Brexit as well as depressed economic activity during the pandemic have presented new challenges for companies operating out of the city. “London’s position has come under threat from a number of challenges including rising costs (its success has made it a relatively expensive city), a slowdown in U.K. economic growth, the impact of COVID, and Brexit,” Lyne said. In 2010, when the Eurozone crisis was still ongoing, London had 18 Global 500 companies; in 2015, that number climbed to 19. The Brexit vote the next year presaged London’s drop, and the last time London slipped below the top five was in 2019, amid the lead-up to Brexit going into effect. That year, it hosted 11 Global 500 companies. In all of Britain, the number of companies has shrunk from 26 to 15 in the last decade. Lyne said that while London will generally continue to be significant in the global context, it may not reclaim its old glory. “Its position has been eroded and we expect its growth premium compared to the U.K. and other global cities to be much smaller in the future than it has been in the past,” he said. Still, even though London slipped down the ranks this year, it’s not all doom and gloom for the English capital. Some of the largest companies in the world still call the city their home, including fossil fuel giants Shell and BP, which rank ninth and twenty-second globally. Other countries in Europe are facing a similar decline as business hubs. In just a decade, Italy has seen the number of Global 500 companies shrink from eight to five, while France has seen a dip from 31 to 24. Germany has been an outlier, with the number of companies growing from 29 to 30. Jean-Pascal Tricoire, CEO of Schneider Electric, a Global 500 company based in France, told ANBLE that other countries like the U.S. and China have allowed big tech to flourish in a way unlike Europe. “Companies need a domestic market of a large scale to build a presence globally,” he said, “especially in a world where companies from India, China, and U.S. are already big.”↩︎

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