Geography really matters in the digital age

Location still matters even in the virtual world, according to Mark Samuels...

Mark Samuels

You might think that the power of collaborative technology makes the geographical location of your office irrelevant in the digital age. Location, however, still matters and probably more than ever before.

Proof comes from Enrico Motta, professor of knowledge technologies at the Open University and an expert in the impact of new IT. His analysis of collaborative technology leads him to conclude that we are witnessing a new and, perhaps, unexpected effect.

Common perception suggests employees and contractors can use mobile and cloud technologies to break the traditional model of working. Such flexibility can theoretically lead to a weakening in the importance of place, as individuals use technology to stay productive regardless of location.

However, Motta suggests practical realities trump theoretical considerations. Developments in the digital age are closely tied to the search for IT innovation and it is this search that makes geography a crucial component of competitive success.

Innovative firms and individuals tend to cluster in specific localities and many of these relationships are based on pre-existing ties. The result, says Motta, is that "the strongest cities have become even stronger" during the digital age.

Research from KPMG backs up this assertion. Reading is the UK's number one regional technology centre, with almost one in five enterprises in the town classed as technology companies. In fact, the proportion of IT businesses in Reading is three times the national average. 

London, meanwhile, is the home of the entrepreneur, with a concentration of smaller enterprises in east London boroughs, including Tower Hamlets, Hackney and Islington. KPMG suggest this clustering highlights the success of initiatives, such as Tech City

Motta along with colleagues at the Open University, and individuals from Milton Keynes Council and IT firm Tech Mahindra is now working on a cutting-edge partnership to transform Milton Keynes into a smart city. The 16m MK:Smart project will use big data to analyse new ways of managing key infrastructure across the city, including transport, water and energy. 

The aim is to produce benefits for the people that live in Milton Keynes and the firms that locate in the city. "If a city wants to be successful in the digital age, it must provide a high quality infrastructure," says Motta, who recognises that clustering produces excellence.

So while flexibility will be a key factor for success in the digital age, business leaders who are looking to stay one stay ahead of their competitors will also keep their fit fixed firmly to the ground. 

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