Frankfurt Main Finance, an organization consisting of the Hesse state government, the local authorities of Frankfurt and Eschborn, Germany's leading banks, major financial institutions from other countries, international law firms and other businesses, has commissioned WHU-Otto Beisheim School of Management, one of the world's leading business schools to assess the economic benefits of Brexit for Frankfurt am Main and its surrounding region. In Brexit brings up to 88 thousand new jobs in the Rhine-Main region 28 Aug 2017 Sabine Knöß interviews Professor Lutz Johanning and Moritz C. Noll of the Business School's Capital Market Research department who carried out that work.
Those academics concluded, on the most optimistic case, that if 10,000 new banking jobs are created in the banking sector over the next 4 years they will lead to the creation of 88,000 new jobs in the Frankfurt Main conurbation as a whole. Most of those jobs will be in the support sectors needed to accommodate an extra 10,000 bankers. Even on a conservative estimate, they calculate that there are likely to be nearly 36,000 new jobs in the conurbation.
Noll explained their methodology as follows:
"We extrapolated the existing statistical data on the employment market in Frankfurt and the region into the future with the help of an empirical model, taking the effects of the Brexit into account. To ascertain and arrive at meaningful figures for the purposes of further planning, we placed a high priority on two factors. Firstly, a valid data basis has been very important for us. Our study is therefore based on employment market data from the German Federal Employment Agency (BA) covering the past nine years. Secondly, we looked for statistical models that have already been effectively applied in the scientific community."The interview does not state how the total of 10,000 banking jobs has been computed though there will undoubtedly be some as a number of banks have already announced an intention to transfer some of their operations from London to Frankfurt.
Frankfurt is not the only financial centre in Europe that hopes to benefit from Brexit. Amsterdam, Dublin, Madrid and Paris are also competing for the business that London could lose and all have their own unique attractions. Dubin is capital of the largest English speaking common law country remaining in the EU with close links to the United States and Commonwealth and Amsterdam, Madrid and Paris have similar cultural attractions to London. From an IP perspective, Frankfurt has many advantages. It is thought to be easier to obtain patents for software implemented inventions than the UK and its courts are considered to be claimant friendly (see the IPO's report Building the Evidence Base on the Performance of the UK Patent System which I mentioned in my article of 26 Aug 2017). That should benefit fintech companies in the region.
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