Urban crisis vs. urban success in the era of 4.0 technologies: Baumol's model revisited

Abstract

The advent of 4.0 technologies allows a footloose location for firms and people, apparently suggesting a “flat world.” In this perspective, cities lose their attractiveness and undergo an urban decline. The aim of this paper is to reflect on urban growth opportunities provided by 4.0 technologies, detaching the analysis from a narrative and speculative explanation. The paper revisits the well‐known Baumol model on urban crisis, and all its criticisms and refinements, introducing the adoption of digital technologies in the theoretical reasoning. Expectations arise in favour of a re‐launch of urban economies in a spatial income distribution setting. An econometric analysis on Italian provinces proves the validity of the expectations.