Digital transformation in the world city networks’ advanced producer services complex: A technology space analysis

Abstract

The Advanced Producer Services (APS) sector, long considered to be the vanguard of the knowledge economy and world-city formation, is undergoing a digital transformation. Digital transformation entails an increased engagement with digital technologies in the operation, product offerings and strategies of APS firms, with potentially transformative implications. Such digitization processes are well established in the morphing of finance into FinTech, with the other APS sub-sectors now allegedly catching-up as evidenced by the arrival of LegalTech, AccountTech, RegTech, PropTech, and AdTech. Moreover, the digital transformation could imply that Information and Communications Technologies (ICT) services are again becoming central to the APS complex after two decades of being largely omitted from world city research. Adopting an evolutionary economic geography perspective, we introduce a new approach that utilizes near real-time data sources to compare local technology spaces with the global picture of digital transformation in world cities. Building a dataset containing information from 40,754 APS start-ups and scale-ups derived from Dealroom.co, this paper explores the geographically uneven digital transformation of the APS sector across European and North American world cities. This allows gauging the extent of digital transformation within APS sectors for each selected city, develop new understandings of the division of labour between world cities, and highlight where sector coalescence between APS sectors is occurring and is more likely to occur. In the process we develop new technological indicators of world-cityness that can be used alongside the classic world city connectivity indicators.