The rise of urban tech: how innovations for cities come from cities

ABSTRACT

This research investigates the economic geography of urban technology, or ‘urban tech’, start-up enterprises. Comprised of ride-hailing, co-living, co-working, smart cities and other urban-oriented activities, urban tech is a suite of innovations that enable and are premised upon growing urbanization. We investigate where urban tech comes from by analysing Pitchbook, a database of venture capital deals, to chart the evolution and geography of urban tech start-up firms. We show urban tech firms to be highly clustered in two kinds of places: specialized tech hubs such as the San Francisco Bay Area and large cities such as New York, London and Beijing. Furthermore, we find that urban tech geography is associated with two classes of factors: the scale of existing tech activity, and the size and extent of metro areas. Together these findings suggest that the geography of urban tech is shaped by the innovative capabilities of urban areas and, to a lesser extent, by urbanization itself. Urban tech investment is less common in areas associated with ‘Industry 4.0’ industrial policy.

KEYWORDS:

• urban technology
• urban tech
• urban innovation
• clustering
• talent
• Industry 4.0

JEL:

• B50
• O

ACKNOWLEDGEMENTS

The authors thank Hendrik Hoelzer, Ian Hathaway, Rit Agrawal, Shauna Brail and David Wolfe for their suggestions, as well as the Advancement department at the University of Toronto for its cooperation in obtaining the data. The authors also thank Lisa De Propris, Marco Bellandi, David Bailey and all the participants at the ‘Industry 4.0’ Regional Studies workshop at Birmingham in December 2019. The standard disclaimers apply.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.