Goldman Sachs has recently announced new plans of opening an office within Birmingham in the coming year.
The large banking firm also claims that it will expand further into the midlands as the areas have great potential.
Birmingham in particular is said to have a great talent pool, especially in engineering.
"a strong and deep new talent pool, excellent academic institutions, a growing technology sector and longstanding leadership in STEM industries,” Goldman stated.
Additionally, Birmingham offers proximity to London which will further benefit from HS2.
Birmingham is one of the cities in which HS2, a high-speed railway link from London to Manchester costing £106 billion, passes through, meaning the city will benefit from increased geographical mobility of labour.
Because of this, high skilled labour from other regions will find their way to Birmingham much easier as the travel time between cities will be reduced, so, individuals can find the jobs which they want.
This will macroeconomic effects such as reducing underemployment as workers go into much more satisfactory careers and reducing the unemployment rate.
Also, the banking firms that leap into the Northern regions of the UK, which are much more deprived than the south, may encourage other large firms such as JP Morgan to do the same.
This will increase the investment into Northern regions, helping alleviate the North and South divide.
This will decrease the relative poverty of individuals living within the North compared to their peers in the South as they will be more likely to go into better-paying careers within the financial sector.
This has additional benefits towards the larger economy as the UK will be utilising its labour force much more effectively if the financial sector is spread up north where there may be entrepreneurial and innovative workers.
Because of this, the output of the UK’s financial sector will increase, enabling the nation to achieve higher degrees of specialisation and comparative advantage over its counterparts.
Goldman Sachs announcements of constructing additional offices may also highlight that the firm still believes in working within offices rather than from home.
This makes it increasingly unlikely that office spaces will be completely abandoned by financial firms, signalling that footfall levels within town centres will still be high enough to suffice the high-streets stability.
So, after much speculation by economists, high streets may be here to stay after all as financial and banking firms decide to not completely eradicate physical office spaces.
However, JPMorgan and HSBC have announced that some of their staff will be in part-time work from home, and, the increased technical proficiency and ease of online shopping which consumers have accustomed to may mean footfall levels will be lower than their previous counterparts.
But, if financial firms decide to stick with using office spaces, the change in consumer habits may not be enough to threaten the stability and footfall levels of the town centres dramatically.
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