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Digital economy expansion and intraurban clustering: the evolution of software company locations
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DOI：10.1080/12265934.2026.2658699.png)
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Abstract
En 中文
The digitalization of urban economies disrupts established firm location principles while others persist, making conventional urban policy wisdom harder to rely on. The digitalizing economy is often assumed to reduce the need for specific locations through flexible communication and interaction between firms with digital technologies. To understand these emerging dynamics, studies have examined the location patterns of industries pioneering digital technology development and use: software and information and communication technology (ICT) industries. However, studies on ICT-intensive industries have focused more on larger regional and national scales and on short study periods, with insufficient attention given to spatial evolution on the intraurban scale. Furthermore, industrial location studies using older data omit recent spatial developments. In this paper, we examine the intraurban spatiotemporal evolution of the digital economy by analysing data on software company locations in Tallinn, Estonia from 1997 to 2023, covering the majority of the software industry development trajectory in the city. We examine the temporal evolution of intraurban clustering and model how internal firm characteristics and external urban factors shape the centrality of software company locations within the physical accessibility network. We apply spatial analysis techniques, such as exploratory spatial analysis and Spatial Autoregressive (SAR) modelling. Our results indicate an intensification of intraurban clustering over time, differences in location logics between younger and more mature firms, and an evolving relationship between software company locations and external environmental factors, most notably industrial diversity. Instead of a major suburban shift, we argue that digital economy expansion has reinforced intraurban centralization and integration into physically accessible urban cores, even within industries pioneering digital technologies such as software, with implications for urban policies aimed at encouraging ICT-intensive activities.
Keywords:
Software industry
digital economy
industrial location
clustering
agglomeration
urban theories
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