Where the streets are paved with gold

London is Europe's financial capital, but how does it cater for Internet businesses? Barbara Thorpe-Tracey of London's inward...

London is Europe's financial capital, but how does it cater for Internet businesses? Barbara Thorpe-Tracey of London's inward investment agency sings the city's praises

In e-commerce, all roads seem to lead to London these days. London is now the hub of e-commerce in Europe. The growing number of companies from around the world that are now setting up in our capital prove London is the city of choice for e-business.

London's supremacy is borne out by the European Cities Monitor 2000 survey, conducted by international property consultancy Healey & Baker. The survey asked the top executives from Europe's leading companies to vote for Europe's best city for Internet-related business and services, and 39% voted London - well ahead of Frankfurt, which came in second place with only 7%, and Paris, which trailed with 5%.

London is attracting record levels of investment from knowledge-driven industries: 75% of all foreign companies that have set up in London over the past six months are from this sector. As businesses from Australia, the US, India and Europe choose London for their headquarters, we ask "just what makes London so attractive for e-business?".

London's inward investment agency, London First Centre, has first-hand experience of companies it helped set up in the capital and it has asked these senior investors this very question. Testimonials show the e-commerce advantage for London is founded on several factors, such as the quality of the local workforce, its location and infrastructure. American e-business solution provider Etensity, for example, chose the city for its European Headquarters because "London has an experienced workforce steeped in business and technology".

London has 324,000 IT professionals and 680,000 work in the knowledge-driven industries (Annual Employment Survey 1999); 45% of the British workforce have Internet access at work. London is also a centre for training in new media and e-commerce, offering various courses at the city's universities and colleges.

The ability to recruit staff with the right technology skills and dynamic talent is crucial, but language skills are also vital for international business. London's diverse population is a great advantage. More than 300 languages are spoken in London - as Scandinavian online bookseller stop4u.com found, London could readily provide employees fluent in Danish and Arabic. For companies from the English-speaking world, the English language makes London the obvious base in Europe.

Infrastructure and market

London's telecom service is the most cost-competitive and innovative in Europe. The London Internet Exchange, based on the Thames-side Docklands development is the transit point for much of Europe's Internet traffic and London is the world's leading Internet hub.

In terms of market, London has the right customer base and environment for e-commerce to further e-commerce. The UK has the most Internet users in Europe (19.4 million ); more UK Internet users shop online than users in any other European market; and credit card usage is the highest in Europe. The UK also has the cheapest off-peak, unmetered Internet access in Europe, second only to the US.

When asking why e-commerce comes to London, many answers reflect the choices of all inward investors - London's position as the financial hub of Europe is the greatest draw. Commerce, whether electronic or otherwise, needs to be at the centre of activity. London is the leading base for incubators and venture capital in Europe. More than 65% of the Fortune Global 500 companies are represented in London and 130 of those have their European Headquarters here. More than 550 foreign banks are located in the capital, more than in any other city in the world. Fortune Magazine's annual Best Cities for Business survey has named London Europe's top business city three years running.

Investors cite the entrepreneurial atmosphere, leading-edge, knowledge-driven economy, quick, non-bureaucratic procedures regarding company start-up and plenty of available office space. London's lead as an international capital of publishing, media, broadcasting and creative industry has also contributed to the perception of London as the driver of the e-commerce revolution.

Bright lights, big city

Then there is the quality of life and vibrant culture of London. Mostly young, creative, 'dotcom' professionals enjoy London's media scene, wealth of entertainment and dynamic 24-hour lifestyle. The capital welcomes and adapts for the Americans, Australians, Indians or Swedes who relocate here, finding many compatriots already here and working in traditional business sectors. The bars of Shoreditch, Clerkenwell and Soho resound with the buzz and enjoyment of the e-commerce capital.

For much the same reasons that London attracts all business from abroad - its dominance as Europe's financial centre, its talent, language and accessibility, e-commerce around the world now increasingly seeks a foothold in its capital, the best city in which to do business.

Read more on IT jobs and recruitment