| Updated:
London has lost its place as the world’s best hub for science and technical innovation after a sober report warned of the city’s sliding global status.
Britain’s capital fell behind San Francisco and Zurich who stormed forward with a win of 16 and 6 points respectively. At the same time, London’s rating threw three points when it tumbled to third place.
The 11th iteration of the Smart Center index, exclusively speaking City isJudges top global cities about their innovation, high-performance university sectors in STEM subjects and well-developed regulatory, commercial and financial services.
Regulatory environments were flagged as a top issue with calls for clear and consistent regulation that moves at the same rate as technology. Taxation was also considered a key factor that affects the center’s development.
The respondents said that innovation should be rewarded with tax incentives, which highlights the UK’s R&D tax contribution and credit, which allows companies to deduct a larger amount of their legitimate research and development costs from their taxable profits.
But they also emphasized the need for “clear and transparent tax policy”.
The report, produced by the consulting company Z/Yen, said that confidence was not “strongly affected” by the rising geopolitical tensions that triggered by President Donald Trump’s uneven trading agenda.
This latest blow to London’s position as an innovation center follows previous reports from City is That Paris had surpassed London as Europe’s technical capital.
Prime Minister Sir Keir Starmer and Chancellor Rachel Reeves have promised to “reduce the bureaucrat” to release economic growth in the UK.
Their efforts so far have included the scrapping of the payment system controller (PSR) with additional reforms expected in Treasury’s initial financial services Growth and Competitiveness Strategy in July.
But after Z/Yen revealed London’s global position, the government may have to turn big to slok back its competitive advantage.
AI predicted to dominate
Finance Managers threw Reeve’s tax policy earlier this month, as she met pressure to give “a clearer, more stable tax environment” and avoid “knee -print” reactions.
A leaked memo from Deputy Prime Minister Angela Rayner Lobbying for new taxes mounted speculation on additional increases that drive fresh economic anxiety.
Despite London’s misery, Oxford climbed the ranking to fourth place after a six -point jump. Its toughest rival Cambridge lost three points and fell to tenth place.
Just under a quarter of respondents, they expected AI to have the most impact on the industry over the next five years.
Energy and environment and electronics, photonics and quantum ranked second and third at 17 percent and 13 percent.
Professor Michael Mainelli, chairman of Z/Yen and former Lord Mayor, said: “With increased global tensions and rivalries, technical expenses are spread over a wide font – from saving lives in defense to the environment.
“Z/Yen expects even more volatility among smart center ratings when interference changes which technology benefits and which centers are best placed to develop them.”
