Selected quotes from Australia’s Grattan Institute’s Productive cities report (PDF), published in May 2013:

“firms require a rich surrounding ecosystem from which to learn. To benefit from networks of other productive and well-connected people and businesses, knowledge-intensive activities cluster in inner cities rich in skilled workers and leading firms.”

‘A city that is “large but dysfunctional” however, “will not optimise its potential fro agglomeration economies” because it will constrain the ability of people and firms to connect with one anther in productive ways.’ - quoting SGS Economics and Planning.

“Research in the UK found that a 10 per cent increase in the level of agglomerations associated on average with a 1.25 per cent increase in aggregate productivity” - the report states this is backed up by Australian researchers, however the effect is likely to be less outside of our major cities.

“not every firm or every job is or should be located close to the centre… [for example] ‘population-serving jobs’… must be located close to where people live.”

Unfortunately the role of digital infrastructure is dismissed in simplistic terms by the report. The nuance of this statement could be challenged:

“New technology such as high-speed broadband will make it easier for employees to work more flexibility and telecommute. But modern communication technology will never completely replace face-to-face discussions as a way to exchange ideas and generate new ones. Even if our work-related journey habits change in character, we will still need to move about the city and gather together in workplaces.”

However, while the report was published in 2013 some of the key sources used pre-date the mass adoption of social media and and mobility (e.g. one key reference was published in 2006, but the first iPhone wasn’t released until 2007).

A related quote in the Sydney Morning Herald today:

“The culture of knowledge workers is to get onto public transport and use their iPads,” [Tim Williams, CEO, Committee for Sydney] says. “Public transport fits with their working style much more than driving in a car for an hour and a half before they can start work.”