Embeddedness, Knowledge and Networks: British Expatriates in Global Financial Centres
Aims and Objectives
As British financial transnational corporations (TNCs) have continued to concentrate their activities within global financial centres, they have become key locations for expatriate labour, whose specific knowledge, expertise, skills and intelligence are required in situ because of the crucial roles they have in face-to-face contact between firm and client, financial markets, and business and social networks. The role of expatriate workers in global financial centres, however, still remains a relatively invisible facet of globalization processes in the world economy. This project aims to provide a detailed and rigorous analysis of this very important and neglected facet of globalization. It will address two key research questions:
Why do financial TNCs still require British expatriates to be located in global financial centres in these times of rapid improvements in information technology, communication and business travel?
How does an expatriate's business, social and cultural lifestyles, which are often embedded within particular expatriate and indigenous networks, contribute to the production of financial knowledge outside of the workplace within global financial centres?
The central foci of this research are British expatriate communities in London, Singapore and New York City.
The project will adopt a combination of both quantitative and qualitative methods. The quantitative segment will involve analysis of secondary data and an extensive postal questionnaire survey of financial TNCs expatriate labour flows. The qualitative segments will involve: an extensive literature review; interview surveys with London based TNCs focusing upon the organizational aspects of expatriate labour; focus-groups with British repatriated labour to gather material on their expatriate experiences; and, two separate interview surveys of British expatriates in Singapore and New York City. In addition to these interview surveys, personal diaries will be used to collect material on expatriate life experiences, and business and social networks.
Academic and Policy Implications
This project will advance our understanding of the different ways in which expatriate knowledge structures, expertise and intelligence are accumulated and reproduced through everyday life experiences, formal work and participation in networks, and how globalization is influencing the global labour strategies of British TNCs who maintain expatriate transnational communities. Specific outputs will assist in policy formation in both the private and public sectors, and specific user-groups include for example: financial TNCs; relocation and expatriate consultancies; the Office for National Statistics; professional organisations; and many other relevant user groups, including the Corporation of London.
As British financial transnational corporations (TNCs) have continued to concentrate their activities within global financial centres (GFCs), they have become key locations for expatriate labour, whose specific knowledge, expertise, skills and intelligence are required in situ because of the crucial roles they have in face-to-face contact between firm and client, financial markets, and business and social networks. The role of expatriate workers in GFCs, however, still remains a relatively invisible facet of globalization processes in the world economy. There is now an urgent need for research which investigates how highly-skilled professional and managerial expatriate labour in finance transfers knowledge over time and space, and how such labour embeds itself, and accumulates local knowledge, within the social and cultural milieu of GFCs.
Two major research arenas contextualise the raison d'Ítre of this project:
(i) Globalization, global financial centres and highly-skilled professional and managerial labour migration
Global cities, and especially their GFCs, have become key basing points for expatriate highly-skilled professional and managerial labour. As GFCs, like London, New York, Tokyo and Singapore, have continued to attract disproportionate flows of financial capital, foreign banks and other financial producer service TNCs, they have become complexes of economic, social and cultural power in the global economy. Equally, GFCs have become key locations for global expatriate labour, particularly those highly-skilled workers who move within financial TNC office networks. Despite rapid improvements in information technology, communications and transportation, and the actual cost of sending staff abroad1, however, financial TNCs have continued to employ expatriates within GFCs. Expatriates are posted to GFCs because they have the specific knowledge, expertise, skills and intelligence required to ensure the efficient operation of both the international financial system, and the global reach of the TNC. Moreover, expatriate workers remain an important global labour market process within financial TNCs because of the crucial roles they have in face-to-face contact between firm and client, wheeling and dealing in international markets, and involvement in social, and often transnational, networks which are of the utmost importance in the accumulation of financial capital within, and between, GFCs.
(ii) Globalizing and embedding migrant knowledge: social networks and cultural life experiences
Running parallel to recent studies of highly-skilled professional and managerial labour migration within financial TNCs GFC office networks, has been a myriad of work, couched within the new economic geography/sociology, which has focused upon embeddedness, knowledge, expertise, business and social networks, gender, and cultural change within GFCs, especially the City of London. In particular, the emphasis has been focused towards the organizational cultures of financial TNCs, and the connections/relationships that exist between knowledge, and the production/circulation of knowledge in finance, particularly within and between, formal business and informal social networks. Thus, in a GFC like the City of London for example, an individuals global financial knowledge and expertise is very much constructed, reproduced and embedded at the local, through: involvement in complex business and social networks; everyday cultural life experiences; gender relations; wealth; the location of their meeting places; and, their reaction/involvement in the culture capital of the Citys day-to-day financial atmosphere, tacitly couched in story making and rumour. Moreover the performance of a financial TNC in a GFC is also very much linked to the success and speed with which their transnational workers accumulate and circulate knowledge, expertise and intelligence in the institutional workplace. As Thrift (1994, 336) argues, an important element of the City of Londons global corporate network is its constant throughflow of workers from other GFCs. Or to put it another way, it can be argued that the competitiveness of a British financial TNC located in New York City or Singapores financial districts is just as dependent upon the success of their expatriate workforce in embedding into an expatriate cultural lifestyle, where cultural capital is accumulated and circulated from personal interaction and contacts within expatriate and indigenous business and social networks, than it is upon capital being accumulated through financial transactions.
This project investigates how highly-skilled professional and managerial expatriate labour transfers knowledge over time and space, and accumulates local knowledge within the social and cultural milieu of global networks concentrated within London, Singapore and New York City.
The project has three major research aims:
The methodology builds upon a combination of quantitative and qualitative techniques:
Academic and Policy implications
This project will advance our theoretical and empirical understanding of globalization and transnational communities, in three main ways.
First, the project will extend our knowledge and understanding of the operational aspects of TNCs in facilitating transnational communities. It will provide an empirically grounded study of the rationale used by TNCs in planning and using such expensive labour resources in these times of information technology, business travel, and high costs of sending expatriates to GFCs. Another important policy implication of this project is to understand how expatriates' transfer their knowledge over time and space, between London and other GFCs, and how participation in social and business networks, refines and accumulates knowledge, which can then be taken back to the workplace and used to further enhance the competitiveness of the British TNC.
Second, the project will develop our understanding of the everyday cultural experiences of expatriate labour in GFCs. British expatriate labour who work in international finance are extremely well rewarded, in terms of both salaries and relocation costs, which were highlighted very visibly by the Nick Leeson affair. Working as a manager of Barings Futures, it was estimated that his earnings were about US$300,000 per annum, and with bonuses, could have reached US$2 million, for 1994 (Financial Times, 1995, 28 February, p3). Moreover, this publicity revealed a very lavish lifestyle, which was not out of place in Singapores British expatriate financial transnational community.
Third, this project will help us begin to develop new approaches to migration. The research will dovetail studies of globalization and the new economic geography/sociology with more convention writings on migration, and also develop and enhance the use of qualitative and ethnographic methods, which will provide exemplars for future studies.
Specific policy outputs from the project will benefit both the private and public sectors, including: