Atlas of Economic Clusters in London

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D.R.F. Walker and P.J. Taylor

There is a large literature on the clustering of firms, including service firms. Systematic and comprehensive mapping of clusters within cities is conspicuous by its absence in this literature. In this atlas maps are presented of the spatial clustering of firms in14 service sectors in one world city, London.

The maps were originally produced for the City of London Project and some of the results have been included in the Appendix of the Corporation of London Report. In this Atlas zonal maps of sector clusters are included as new items. The methodology is described in summary form below, for more details reference should be made to the Report.

Data: this was obtained as follows:

Data on companies have been supplied by Market Locations from Companies House registers. Each Company record included a SIC coding and an address.

The data from which the maps were derived were selected on the basis of 14 composite groups (sectors) as shown below. In this way the locations of 17836 offices across central London were identified.

The 14 sectors are (the numbers in brackets are the SIC codes):

BANKS: Banks (65121), Building Societies (65122), Financial leasing (6521), Other credit (6522), Credit granting (65229), Factoring (65222), Mortgage finance (65223), Other credit granting (65229), Investment trusts (65321), Units trusts (65232), Security dealing (65233), Venture capital (65235).

INSURANCE: Life insurance (6601), Pension funding (6602), Non-life insurance (6603).

AUXILIARY FINANCE: Administration of financial markets ((6711), Fund management (67121), Security broking (67122), Auxiliary/intermediation (6713), Auxiliary/insurance and pension funding (6720).

REAL ESTATE: Development (7011), Letting conference centres (70201), Other letting (70209), Agencies (7031).

IT: Hardware consultancy (7210), Software consultancy (7220), Data processing (7230), Data bases (7240), Maintenance (7250).

LAW: Legal (74119).

ACCOUNTANCY: Accounting/auditing (74121), Tax consultancy (74123).

MANAGEMENT CONSULTANCY: Business consultancy (7414), Public relations (74141), Financial management (74142), General management consultancy (74143), Other management consultancy (74149).

ARCHITECTURE/ENGINEERING: Technical (7420), Architecture (74201), Urban planning (74202), Quantity surveying (74203), Engineering design consultancy (74204), Engineering industrial design (74205), Engineering technical consultancy (74206), Testing and analysis (7430).

ADVERTISING: Advertising (7440), Advertising space/time (74401), Creation and placement (74402), Other advertising (74409).

RECRUITMENT: Labour recruitment (7450)

BUSINESS SUPPORT: Cleaning (74701), Photographic (74819), Secretarial and translations (7483), Speciality design (74842), Exhibition organisers (74843), Conference organizers (74844), Other business (74849).

CHARITIES: Charitable social work (85321).

ORGANISATIONS: Business and employer organizations (9111), Professional organizations (9112), Trade unions (9120), Religious organizations (9131), Other (9133).

Maps: there are three maps drawn for each sector.

The first map drawn for each sector simply shows the spatial distribution of firms for that sector. That is to say, the 17836 firms that have been located are mapped across 14 maps, one for each sector.

The second map for each sector shows the spatial distribution of ‘clustered firms’. These were produced as follows:

A clustered firm is defined as one whose average distance to its 10 nearest neighbours (in its sector) is less than 100 metres. Mapping the clustered firms shows where the clustering in a sector is taking place. Basically this map removes all non-clustered firms from the first map to eliminate offices that are widely dispersed across London (e.g. in the case of the banking sector, the local retail banks are removed). These maps also indicate the varying degree of clustering between sectors. This is also indicated by the proportion of offices in a sector that are clustered. This is found to be closely related to the total number of offices in a sector: a cluster index for each sector is computed as a residual from regressing proportion of clustered offices against total number of offices. This index measure how much a sector is over- or under-clustered: figures are given with the maps. For instance, Insurance, Banks and Recruitment show a strong propensity to be in clusters, while Charities, Information Technology and Business Support are characteristically more dispersed.

The third map for each sector shows cluster zones. These were identified manually as areas in which there is a continuous patch of clustered firms. These are not drawn for all sectors since some exhibit no such zones.

The end result is an Atlas of 42 maps covering 14 service sectors across central London. Please explore: