High cost of living hasn't stopped British Millennials from flocking to the city.

London, we in the media love to report, is becoming a colony of the global super-rich, with foreign investor playboys buying up whole buildings, neighborhoods, even districts of the city – pushing up prices, driving out locals, and leaving the city increasingly without a sense of normal life.

But London has always drawn in the young and ambitious as well as the already successful. A new report from the London-based think tank Centre for Cities provides compelling evidence that, despite its high cost of living, London continues to draw in more young and productive talent from across the United Kingdom than any other city. And it's London’s continued ability to attract talent, the report concludes, that has been central to its economic growth and to the U.K.’s ongoing economic recovery.

At first glance, the population numbers don’t seem to indicate London’s increasing dominance. More than 930,000 people left London for other cities in England and Wales between 2009 and 2012, while only 775,000 moved to the capital from other parts of the country. But there’s a significant difference between population flow and talent flow, and the city has continued to be the U.K.'s top destination for 20-somethings in particular. More significantly, most of those who left London proper moved within the country’s South East – essentially, to the suburbs.

The map below, from the report, charts the aggregate migration of British residents to and from London from 2009 to 2012. The green arrows show people coming to London, the red ones those leaving it. London has pulled in people from across places north of it, even big cities like Manchester and Birmingham. Most of those who left escaped to within easy commuting distance.

"Cities Outlook 2014," Centre for Cities

What’s more, recent migration to London has been driven by the young and educated. According to the report, a full third of all British 20-somethings who chose to relocate during the study period made their way to London (by comparison, Manchester and Birmingham drew in only 3 percent each among the same group). The graph below, also from the report, charts just how strong the pattern of net in-migration has been for Millennials.

"Cities Outlook 2014," Centre for Cities

This pattern has been driven by far more than just small-town and suburban university graduates moving to the city. London had a net inflow of nearly 50,000 young people aged 22-30 from the country’s other major cities, drawn largely by the huge number of jobs for educated workers in the capital. This indicates that both lifestyle amenities and, more significantly, the availability of promising career paths for educated young workers have fueled this migration.

London’s dominant economic role within the U.K. has been the source of controversy for decades, if not centuries. All the way back in 1940, an official royal report worried that the city “acts as a continual drain on the rest of the country both for industry and population, and much evidence points to the fact that it is already too large.”

The report's authors ask what is perhaps a natural question, after seeing this sort of 'brain drain': “Would the UK be better off without London?” Their answer: a resounding no. London, they note, has been a major – if not the major – driver of the entire country’s economic recovery. London accounts for 19 percent of jobs, 21 percent of businesses, and a full quarter of the economic output for the entire country. And London-based firms have also created significant new employment in their branch locations in nearly 80 percent of the country’s other cities since the crisis began in 2008. Moreover, the city contributes far more in tax dollars than it receives in public spending.    

As the authors warn, “London’s success is a good thing for the national economy…. Constraining London’s growth will reduce national economic growth, and much of the investment that would have gone to the capital may go elsewhere in the world, rather than elsewhere in the UK.”

A far more important question to ask is what other cities are doing wrong as they continue to lose young, talented workers to London.

Smaller cities struggling to keep their educated, young workers happy must figure out how to channel some of the successes of London. In part, this may require some of the political and economic autonomy, including power over budget and strategic planning, that London, uniquely among U.K. cities, already has. The U.K. already is a densely populated, urban nation, whose cities account for 54 percent of the population, 59 percent of jobs, and 61 percent of the economic output. Ensuring that other cities like Birmingham and Manchester are better able to take advantage of the benefits of their dense networks of businesses and people will be key in maintaining the country’s economic edge.

As the report concludes, “A stronger London means a stronger UK economy. But a stronger UK economy also needs strong performing cities outside of London. Growth is not a ‘zero-sum’ game.”

The story of ambitious Britons leaving their small-town and small-city past for London is far from a new one. Though the city itself has come a long way from its Dickensian past, its draw on the U.K.’s young people is no less intense.

But London’s global and national dominance, a byproduct of the increasingly uneven and clustered nature of the global economy, creates more advantages than disadvantages. Yes, the city is facing unprecedented gentrification and a skyrocketing cost of living as absentee, super-rich investors work as parasites on the city’s housing stock. But imagine the U.K without London. Its economy would be far more moribund, far less innovative, far less productive and far less connected globally. It makes little sense to limit the growth of London, now one of the world’s most significant economic spikes. The real challenge is to develop new ways and policies to expand and harness the power of these global mega-centers for more people and more places. 

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