The internet, space and the new economy in Budapest

Abstract

In recent spatial studies the world of the internet has gained increasing importance, because those online processes affect the real offline world. Correspondences in the workplace, electronic administration and financial transfers on the internet are part of our lives today, and the economic actors pay more and more attention to their web appearance. This paper examines the relationship between geographical space and virtual space of the internet. The subject of the investigation is the positions of new-economy firms in different spaces.

Nowadays a firm not only has a geographical position, it also has a web position. The latter position can be defined by the result lists of internet search engines such as Google. The main aim of this paper is to conduct a methodological experiment to reveal the relationship between physical and virtual location-choices of companies. The main question is: If a firm is in the centre of a geographical space, does it also have a central virtual position? Or if a firm has a peripheral geographical position, does it also have the same position in the internet space? According to the hypothesis to be tested here, those firms which have a central geographical location in a city do not pay serious attention to their web appearance, because they have enough customers. But firms which have fewer consumers, because of their peripheral geographical location pay attention to maintaining an enhanced web appearance.

In the first part of the paper the phenomena and conception of the “new economy” are defined. After that the limited opportunities of empirical research on the new economy in Hungary are explained. The empirical database is presented along with the methodology of correlation analysis. Finally, the result of the research about the relationship between the physical and virtual central/peripheral locations of new-economy firms is reviewed.

The main result of the research was that the correlation analysis method was sufficient to answer the research questions. The relationship between the physical and virtual locations of firms is unverifiable if we analyse all of the firms. But among certain activities or professions there are different relationships. For example the media advertising agencies, review publishers, biotechnology firms and TV stations have a central position in Budapest, but their websites are at the periphery of the Google hit lists.

Notwithstanding that the hypothesis was correct about those activities, there are other activities like daily paper publishers or radio stations where the physical and virtual positions are both located in the centre. These relationships have a similar strength in correlation analysis, and it follows that the new-economy firms have different location-choice strategies in the city of Budapest as well as in the internet space. Most of new-economy activities cannot show an obvious strategy concerning a centrality preferences between the physical and the virtual space.