London could generate £76bn boost to UK economy through ‘frontier industries’, says PwC

London could help generate an additional £76 billion a year for the UK economy by 2030 if productivity growth in finance, technology, and science and research industries is accelerated, according to a new report from PwC. The consultancy’s Grow London report argues that the capital is well positioned to support growth in what it describes as “frontier industries” due to its concentration of skilled workers, access to investment, established technology clusters and stable business environment.

PwC estimates that stronger productivity growth in these sectors could contribute an additional £40 billion in annual gross value added (GVA) within London by 2030, with wider economic effects increasing the UK-wide figure to £76 billion. The report compares London with 11 international peer cities and concludes that it remains one of the strongest locations globally for developing high-productivity industries.

According to the analysis, London continues to attract highly skilled workers through its universities and employment opportunities. The report notes a growth in technology-related study programmes and a 15 percent increase in workers with skills linked to frontier industries.

London also remains a significant centre for investment. PwC found that the capital ranks second only to New York among the cities assessed for venture capital market maturity. Since 2019, artificial intelligence and financial technology firms have accounted for 60 percent of venture capital deals completed in London, representing more than 7,000 transactions.

The report also highlights London’s innovation ecosystem. Among the cities analysed, London ranks second only to Tokyo for AI patents per million workers. It also performs strongly for institutional stability and low levels of corruption, according to the IESE Cities in Motion index.

Simon Oates, UK economics leader at PwC, said that discussions about regional economic development should not overlook London’s role in supporting growth across the country. “As the UK rightly takes steps to level up its regions, it has become almost unfashionable to talk confidently about London,” he said. “However, the reality is that a prosperous capital creates significant economic spillover effects that, in turn, generate payoffs from Caithness to Cornwall.”

The report identifies several priorities for businesses. These include helping employees develop the skills needed to work alongside AI technologies, making greater use of innovation clusters such as Camden’s Knowledge Quarter and the City of London’s fintech sector, and adopting AI tools in a more targeted and strategic way.

PwC argues that policy interventions will also be required. These include addressing energy costs, improving access to growth-stage finance, increasing housing affordability and strengthening pathways from education into employment, particularly for young people who are not currently in education, employment or training.

Quentin Cole, London market leader at PwC UK, said the capital has the foundations needed to drive a new phase of productivity growth, but that further action is needed from both businesses and policymakers to realise its potential.