Edinburgh, the capital city of Scotland, was ranked the 13th largest financial centre internationally and the 4th largest financial centre in Europe in the Global Financial Centres Index in 2020. The economy of Edinburgh is recognised as a powerhouse of the Scottish economy, as well as the wider UK economy, being the second largest financial centre in the United Kingdom behind London.

Edinburgh has been consistently one of the most prosperous parts of the country and has the strongest economy of any city in the UK outside London.Why Invest in Edinburgh Edinburgh City Council Capital Review In 2023, its gross domestic product per capita of £69,809 surpassed London's for the first time. Financial Times FDi Magazine has named Edinburgh as the "Best Large European City of the Future" and "Best Foreign Direct Investment Strategy (Large City)" for 2012/13.

The city is consistently ranked as one of Scotland's major industrial hubs, with an employment workforce of around 48,030 across the city.

Economic profile

Banking history

Banking has been a mainstay of the Edinburgh economy for over 300 years, since the Bank of Scotland was established by an act of the Scottish Parliament in 1695. Today, the financial services industry, with its particularly strong insurance and investment sectors, and underpinned by Edinburgh-based firms such as Scottish Widows and Standard Life Aberdeen, accounts for the city being the UK's second financial centre after London and Europe's fourth in terms of equity assets.

The NatWest Group (formerly Royal Bank of Scotland Group) opened new global headquarters at Gogarburn in the west of the city in October 2005. In the 19th century, Edinburgh's economy was known for banking and insurance, publishing and printing, and brewing and distilling. Today, its economy is based mainly on financial services, scientific research, higher education, and tourism.

Statistics

In 2011, the population of Edinburgh was estimated at 476,600, which was an increase of 28,000 on the figure from 2001 which stood at 448,600."Scotland's Census - 2011 Census: First Results on Population and Household Estimates for Scotland - Release 1B" The city has the second-highest gross value added (GVA) per resident (behind London) in major UK cities, with the average being £34,178 per resident."ONS - Regional Gross Value Added (Income Approach), December 2012" The employment rate for the city stood at 73.6% for Q1 of 2013, which was higher than the rate for Scotland as a whole, which stood at 71.8%."Edinburgh Economy Watch - October 2013" The city has the lowest percentage of total working age residents claiming Jobseeker's Allowance of major UK cities at 3.2% as of December 2012."Edinburgh by Numbers 13/14" Edinburgh is second only to London in average gross annual earnings per resident in major UK cities, with an average salary of £27,800."Scotsman 2013 - Only London beats Edinburgh on productivity in UK"

Top employers

The table below shows the top employers in terms of employee numbers in the City of Edinburgh:

+ Top employers, City of Edinburgh Employer Number of employees NHS Lothian19,890 City of Edinburgh Council18,617 University of Edinburgh13,372 NatWest Group8,368 Lloyds Banking Group7,500 Standard Life5,259 The Scottish Government3,913 Lothian and Borders Police2,439 Tesco (inc Tesco Bank)2,400 Royal Mail2,257| Source: Edinburgh by Numbers 2013/14

This next table highlights the number of people in employment in the City of Edinburgh by industrial sector:

+ Top employment sectors, City of Edinburgh Sector Number of employees Human health and social work45,300 Wholesale, retail and repair36,400 Financial Services34,600 Education29,200 Accommodation and food services26,800 Professional, scientific and technical activities27,100 Administrative and support services activities21,000 Public administration, defence and social security18,700 Information and communication12,400 Transportation and storage10,200 Arts, entertainment and recreation10,000 Construction9,000 Manufacturing7,300 Other service activities5,500 Primary industries and utilities3,200 Real estate5,200| Source: Edinburgh by Numbers 2013/14

Key sectors

Financial services

Edinburgh is the second largest financial centre in the United Kingdom, after the City of London, and the fourth in Europe by equity assets.Edinburgh Brand Website Edinburgh's Financial Services Sector

Edinburgh has been a centre of banking for over 300 years; the Bank of Scotland was founded in 1695, by an act of the original Parliament of Scotland and is now part of Lloyds Banking Group, who have retained the Scottish headquarters in Edinburgh. The Royal Bank of Scotland (RBS) was founded in 1727 by royal charter. In 2000, RBS acquired National Westminster Bank in the biggest banking takeover in British history. It is now part of the NatWest Group, who have also retained the Edinburgh headquarters, operating from a complex at Gogarburn since 2005. TSB, Tesco Bank,The ScotsmanJobs Boost as Tesco to base finance arm in Capital Sainsbury's Bank, and Virgin MoneyThe Scotsman Virgin Money provides jobs boost for the city also have headquarters in the city.

In insurance terms, indigenous Edinburgh companies such as Standard Life and Scottish Widows form a large part of the European insurance sector as well as being major employers in the city. Scottish Widows was founded in 1815, managing £145.79 billion worth of funds at June 2013 with a workforce of around 3,500.

The New Town and city centre has traditionally been home to many companies, in the banking, finance and legal professions, but modern needs have caused many to relocate. Immediately to the west of the city centre is the Terry Farrell master-planned Exchange business district, which now houses major employers such as Scottish Widows, Standard Life, the Clydesdale Bank, and Baillie Gifford.

Edinburgh Park is one of the largest business parks in the UKEdinburgh Park Edinburgh Park Overview and is located on the western periphery of city, near Edinburgh Airport. The park was opened in 1992, between two large out-of-town shopping developments at South Gyle and Hermiston Gait (all three with their own respective tram stops), and is close to Edinburgh Airport as well as major road routes such as the A8, the M8, M9 and M90 motorways and the A720 Edinburgh City Bypass. It is also centred between three local railway stations - Edinburgh Gateway, South Gyle and its own, Edinburgh Park. Close to Edinburgh Park at Gogarburn, the Royal Bank of Scotland have their global headquarters campus. HSBC, Royal Bank, Diageo, J. P. Morgan, Telewest, BT, Fujitsu and Lloyds Banking Group have all established large offices in this park. Following the opening of the Royal Bank's new headquarters, there will be around 20,000 people working in the western outskirts of the city.

Technology and software

Edinburgh has an estimated 17,136 people working within digital companies. The technology sector has grown upon the expertise within the city’s universities. The city has seen a growth in the number of software companies in the city over the last 10 years and there are now more than 100. These include travel search website Skyscanner and one day fantasy sports provider FanDuel who have grow within the city. Rockstar North (formerly DMA Design), known for creating the Grand Theft Auto series, is also based in Edinburgh. Several large corporates have invested in Edinburgh including Amazon Development Centre Scotland and Microsoft. The School of Informatics is the UK’s largest and longest established research group in informatics. In the REF 2014 assessment for computer science and informatics the School of Informatics has produced more "world-leading" and "internationally excellent" research (4* and 3-star) than any other university in the UK.

A large number of technology companies are based in the area around the University of Edinburgh.

Retail

Edinburgh has not had as large or as significant a retail sector compared to Glasgow, however large out-of-town shopping developments have taken place in recent years, such as the Gyle development in 1993 and the Fort Kinnaird shopping complex located to the east of the city. The St. James Centre and Princes Mall started in the 1970s, then Cameron Toll in the 1980s. More recent developments are the Gyle centre next to Edinburgh Park, Ocean Terminal in Leith and the retail parks at Hermiston Gait, Straiton and Fort Kinnaird which are all next to the Edinburgh City Bypass. Edinburgh has many modern supermarkets in its suburbs which offer a more day-to-day type of shopping. As a shopping centre, particularly Princes Street, Edinburgh suffered some decline for a number of years, but since 2005 has seen the City centre yield rise in comparison to other similarly sized cities.Valuation Office Agency VOA Property Market reports Recent attempts to encourage shoppers back into the city centre have included the development of top brand department stores on George Street and St Andrew Square and plans to redevelop Princes Street in the future.Capital Review , Capital Review: Issue 20: String of Pearls In October 2016, the St. James Centre was demolished and rebuilt with a new £1 billion design by Allan Murray Architects and BDP Architects, and was opened to the public in June 2021. It was renamed the St James Quarter and is able to accommodate up to 80 new brands. While it brought a new excitement to the city with many new brands appearing within the quarter, it caused many brands located in Princes Street to relocate to the St James Quarter, undermining the hopes to revitalise the street. St James Quarter was designed to be in the shape of an eye, with the 5-star W Hotels taking pride of place in the 'iris'. This central feature, however, caused a lot of controversy in the city and even put Edinburgh's UNESCO World Heritage status under threat.

Tourism

Tourism is another important mainstay of the economy of Edinburgh, supporting 30,000 jobs in the city worth £1.6 billion to the city economy.Edinburgh Convention Bureau Edinburgh Convention Bureau - Fast Facts In 2011, visitor spending was £1.16 billion, compared to £250 million in 1990. Edinburgh is Scotland's most popular tourist destination in terms of visitor numbers, with numbers growing substantially each year, particularly in the budget travel and backpacking sector, assisted by the growth of Edinburgh Airport and direct rail links to the rest of the country.

The programme of cultural festivals held annually, including the Edinburgh International Festival and Hogmanay, attracted 4.3 million visitors in 2012 and the Festival Fringe is the largest ticketed event in the world, after the Olympics and the World Cup. The summer events alone (sometimes collectively referred to as the "Edinburgh Festival") generate in excess of £100 million for the local economy.

Another component of Edinburgh's tourist industry is business and conference tourism, which generates in excess of £74m for the city.The Scotsman From nuclear physics to boob jobs - Edinburgh conferences worth £74m Edinburgh is the UK's most popular conference destination, ahead of both London and Glasgow. Visitors are attracted by the UNESCO World Heritage Sites of the Old Town and the New Town as well as the history and culture of the city most visible in tourist attractions such as Edinburgh Castle and the Palace of Holyroodhouse.