City by the Sea goes Offshore?
© David Gray
The city has had a financial sector to its economy for many decades. Back in 1929 local boy, Lewis Cohen (later Lord Cohen) took a failing, insignificant building society (The Brighton and Sussex Equitable Permanent Benefit Building Society!) and built it into a national giant, the Alliance Building Society. Unfortunately, it merged with the Leicester Building Society in the 1980s and moved shop up north. But by that time the city had an established financial sector. The global giant, American Express, made the city the home of its European operations in the 1970s.
Of course, the financial sector of the economy is in a state of permanent revolution. The rise and rise of computer-driven telling systems and then internet banking continues to transform the industry. The city centre between Castle Square and Palmeria Square used to have more bank branches than pubs on its street corners. But today many have gone the way of branch rationalisation, and their fine buildings are now home to fish restaurants, cafe bars, betting shops and the like.
Preston Road, opposite Preston Park, has long had a concentration of banking and insurance operations, but it too has been ravished by change.
Today the big operators from the point of view of the number of employees are American Express, Lloyds TSB and Legal & General. In addition, there's the likes of GMAC Commercial Credit and Family Assurance Friendly Society Ltd.
And today the big threat is offshoring, the relocation of back office functions abroad, in particular, India.
North America and Britain are leading the way with offshoring. English is the international language, and India because of its colonial past has a large native English-speaking population. Predictions vary but all point in the one direction. Deloitte Consultancy predicts that 2 million jobs in the western economies will move to India by 2008. The trade union, Amicus, is predicting the loss of 200,000 UK call centre and back office jobs by the end of this decade. The UN is forecasting that as many as 5 million US and UK jobs will be offshored in the next decade.
Other EU economies have been less prone to offshore, partly because of the language issue, and partly because they don't buy into the Anglo-American free market dogma quite so much. When they offshore, it's often to lower cost east European economies.