APPENDIX 3
LDA INVESTMENT IN OVERSEAS OFFICES
The LDA has invested in four offices in important
emerging markets:
In addition, there is an office in Brussels
(funded jointly by GLA, LDA, TfL, LFEPA, and London NHS) with
a quite different purpose: it focuses on engagement with the European
Commission.
The LDA's overseas offices are currently being
examined as part of a process considering whether the Greater
London Authority's international offices perform a useful strategic
function and represent value for money. This is being undertaken
by the Mayor's Office led by Ian Clement, Deputy Mayor for Government
relations, who will report in the Autumn..
The LDA also commissions Think London to undertake
foreign direct investment activity on its behalf. Think London
has offices in New York and San Francisco and shares the LDA-funded
offices in Mumbai, Delhi and Beijing. Think London also shares
marketing costs with UK Trade & Investment in Brazil and shares
a representative in Korea with the South East England Development
Agency.
The Mayor delegates his statutory duty to promote
and develop tourism in London to the LDA which commissions destination
marketing to Visit London which works in partnership with Visit
Britain. Visit London has a 4 year grant agreement with the LDA,
which expires in March 2010. Funding for the current financial
year is £15.4m and covers promotional activity overseas including
events for the travel trade (25% of Visit London's income is from
the private sector). There is a Visit London representative in
India, who works out of the LDA Delhi office, and the LDA's representatives
in the China offices offer support to Visit London's activity
in that country, such as consumer campaigns aimed at changing
outdated perceptions of London.
Working closely with Visit London and Think
London on a number of projects is Film London, the regional screen
agency for the capital. Alongside national funding from the UK
Film Council, the LDA currently has a £5.9m grant contract
with Film London (expires in March 2009) intended to achieve a
number of objectives around business support, skills and inward
investment. The latter includes promotional events held overseas,
production and finance markets hosted in London and, in partnership
with local authorities and a number of other agencies, a strategy
intended to make film making in London far easier and less costly.
RATIONALE
London's economic success depends to a significant
extent on its openness and international links. This is particularly
true across the three crucial areas: foreign direct investment;
tourism; and higher education:
— 80% of the London's Stock Exchange's
business is international, reflecting the fact that London does
not have the national market that sustains New York and Tokyo;
— Over 13,000 overseas companies operate
in London
— Foreign Direct Investment accounts
for over a quarter of London's economy, representing a £52
billion a year contribution to GVA, employing 500,000 people,
representing 13% of all London jobs.
— Tourism is one of London's major
industries, worth an estimated £15 billion a year;
— Overseas students are worth £1
billion a year to London—and many stay or return to forge
their careers here. Approximately one-third of London's senior
managers were born overseas.
The offices in China and India were set up in
response to the rapid growth in these economies in recent times,
principally to be an effective means of promoting London.
China and India are becoming increasingly important
in the world economy—they collectively contributed 44% of
global growth in 2006 and 50% in 2007 and economists expect them
to grow strongly for several decades. The dramatic growth rates
of China and India represent a major economic opportunity.
London already has significant economic links
with China and India through investment, tourism and study. These
links are currently estimated to contribute £14 billion GDP
and support 200,000 jobs in London.
An additional consideration is that there can
be scope to exchange experiences and learn from other global cities:
directly with the leading emerging markets' cities where London
is represented, and, through the Brussels office, with other European
cities. Topics on which exchanges have occurred include climate
change, transport, tourism promotion, housing and planning.
OBJECTIVES
The main objectives of the LDA's offices in
China and India are as follows:
— Raise the number of companies from
target markets choosing to set up their European headquarters
in London;
— Increase the number of tourists from
target markets visiting London each year;
— Increase the number of people from
target markets choosing to study in London
— Promote the London 2012 Olympic and
Paralympic Games.
To achieve this, the LDA and its representatives:
— Build relationships with key government
agencies, eg in culture, education and trade, in order to develop
projects such as cultural exchange programmes, media promotion
and education programmes
— Support projects by GLA and Chinese
partners, including seasons and events such as the China in London
and London in China seasons
— Arrange/host delegations to/from
London's businesses
— Use them as a base to penetrate other
cities in emerging markets in order to promote London and establish
contacts there as well
— Compile databases of contacts for
partner delivery organisations such as London Higher and Visit
London
— Provide local news monitoring and
market intelligence updates
— Ensure a London presence in major
events and exhibitions, including the 2008 Beijing Games, Shanghai
Expo 2010
THINK LONDON'S
ACTIVITIES
In India, since the opening of the offices in
Delhi and Mumbai in 2007, Think London has targeted clusters of
companies in priority sectors and under explored sub-sectors,
generating 46 projects and 106 leads in the year. They also handled
32 projects and 23 leads generated by partners such as UKTI. They
contributed 210 jobs to the London economy from 5 successful investments
(a contribution of £24.5 million to London' GVA, based on
the economic model developed by DTZ).
In China, the strategy is to pursue Key Accounts
and Small High Growth companies and the raise London's profile
and strengthen links with key intermediaries and government organisations.
A focus has also been to promote the Touchdown Centre which provides
and incubator and soft landing for Chinese companies establishing
in London. A key benefit of having the offices has been a clear
improvement in relations with key UK partners and stakeholders.
The Beijing office generated 24 new projects and 109 leads last
year. The office was involved in 10 investment projects resulting
in 204 jobs equating to a contribution of £23.5million to
London's GVA.
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