UK track and field fans – of which I am most certainly one – will be denied the chance to see the world’s fastest man at close quarters this summer. Citing excessive tax deductions on appearance and prize money, superhuman Ussain Bolt – master of his craft – has chosen to ply his trade elsewhere. There are clear parallels with those (self-proclaimed) masters of the financial universe, hedge fund managers. As governments have sought to balance the books, tax regimes for the super-rich have come sharply into focus. In the UK this has led to a renewed and highly politicised debate about the effects of regulation on the competitiveness of London as a financial centre.
Despite some commentators maintaining that hedge funds would take flight, there has hardly been a queue of disillusioned super rich awaiting the next (private) flight to Geneva. What there has been is (often politically motivated) threats from many in the sector threatening exit from the world’s most innovative financial capital. Time will tell as to the true teeth of both regime change and the accompanying threats. But presently there are few concrete examples of organisations following through on their posturing.
This strikes on a wider issue. In my view, the notion of footloose corporate occupiers is dramatically overstated. The reality is that as economies become dominated by service industries and corporate fortunes determined by the quality and creativity of its human resources, the ability to up sticks on a whim has been curtailed – and not just on the basis of cost. Corporates or rather their highly skilled staff have taken root in locations – and once established they are very, very difficult to break down. Corporate mobility is thus most often restricted to the selective relocation of key (and given their inherent rootedness, highly incentivised) individuals to core growth markets (notably Asia presently) from which capability is built from the ground up rather than the whole-sale relocation of offices or functions.
The Lightning Bolt will be highly mobile on the running tracks of Europe. His bank balance will be filling at a similiarly rapid rate of knots. But for lesser corporate mortals mobility and indeed personal wealth will remain somewhat more limited!