By Dr Nor Amaleena Mazlan and Dr Zafira Nadia Maaz
For as long as cities have existed, accessibility has shaped the value of land. This principle
is not disappearing, but it is being revised. The digital economy has not made physical space
irrelevant. It has made location more complex. Land is still valuable because of where it is,
but “where” now means more than distance to roads, rail, town centres, or customers. It also
means whether a location sits within a delivery radius, is visible to platform algorithms, is
connected to digital infrastructure, and can support data-driven urban services.
Foot traffic still matters, but service radius now matters too. Zoning plans still shape
development, but algorithms increasingly influence how places perform. Traditional
infrastructure remains important, but digital infrastructure is becoming part of the new urban
value equation.
Retail value is no longer only about foot traffic
A good retail location was once mainly defined by strong foot traffic. That logic still applies,
especially for businesses that depend on visibility and walk-in customers. However, it is no
longer the only logic that matters. For many businesses, service radius has become just as
important. A shop on a quieter secondary street may perform well if it is surrounded by
dense residential areas and can serve customers efficiently through delivery platforms. A
small food operator may no longer need premium frontage if most orders come through an
app. A pharmacy, grocery store, laundry service may derive value not from how many
people walk past, but from how many customers it can reach within 15 or 30 minutes.
This changes the economic meaning of location. A less visible shop lot may become
commercially viable if it is strategically located within a high-demand residential catchment.
In many Malaysian cities, secondary shop lots, neighbourhood retail units, cloud kitchens,
and small fulfilment points are gaining new relevance supporting delivery-based business
models. Foot traffic is not irrelevant. It has simply been joined by another value driver: digital
reach. The best location is no longer only where people pass through. It may also be where
people can be reached quickly, affordably, and repeatedly.
Urban land value is no longer shaped only by roads, rail stations, zoning plans, and visible
development patterns. It is also shaped by less visible digital systems. Algorithms now
influence which areas receive demand, which businesses are discovered, which parcels
become logistically attractive, and which routes become commercially viable. A logistics
operator deciding where to locate a micro-fulfilment centre studies order density, travel time,
delivery performance, customer behaviour, and platform demand patterns. A food delivery
platform may increase the visibility of some restaurants because they sit within a high-
demand service radius. A ride-hailing algorithm may repeatedly direct vehicles through
certain neighbourhoods because the route is faster, even if this increases pressure on
residential streets.
This means location advantage is increasingly co-produced by physical infrastructure and
digital visibility. A shop lot may be physically accessible, but commercially weaker if it is
poorly positioned within platform search, delivery coverage, or customer data flows.
Conversely, a less prominent location may become viable if it performs well within
algorithmic systems that connect demand, distance, and delivery efficiency.
At the same time, digital infrastructure is becoming part of the basic urban system.
Broadband connectivity, data centres, cloud infrastructure, digital payment systems, urban
sensors, platform networks, and geospatial data are no longer separate from the built
environment. They influence where businesses locate, how services are delivered, how
people move, and how land is used. This creates a new planning reality. Local authorities
continue to regulate land through zoning, density control, infrastructure provision, and
development approval, while private platforms quietly shape urban activity through routing,
ranking, pricing, and service allocation. These systems may reinforce each other, but they
may also work at cross purposes.
The issue is not that algorithms or digital tools are bad for cities. They can help local
authorities understand land use patterns, detect congestion pressure, optimise infrastructure
use, monitor pollution, and plan cleaner urban development. The concern is governance. If
algorithms and digital infrastructure increasingly influence land value and urban activity, their
effects must be made more visible, explainable, and accountable.
For the built environment sector, this marks an important shift. Planners, valuers,
developers, quantity surveyors, and policymakers can no longer assess land value only
through frontage, accessibility, surrounding development, and infrastructure. They must also
consider digital indicators such as platform visibility, service radius, delivery efficiency, data
connectivity, proximity to demand clusters, and exposure to algorithmic traffic flows.
The digital economy should not be treated only as a technology agenda. It is also a land use
agenda, an infrastructure agenda, and a governance agenda.
Economic resilience in the digital age
The digital economy also changes how cities absorb shocks. Floods, traffic congestion,
pandemics, supply chain delays, rising operating costs, and changing consumer behaviour
all affect how businesses survive. In the traditional urban economy, many businesses
depended heavily on physical access. If customers could not reach the shop, revenue
declined. If a road was flooded, a shopping district became temporarily inactive. If workers
could not commute, office-centred economic activity slowed.
The digital economy introduces a second channel. Businesses can now reach customers
through online platforms, delivery networks, digital payment systems, social media
marketing, and remote service models. A cafe, pharmacy, grocery shop, tuition centre, clinic,
or small retailer is no longer limited only to walk-in customers. This does not remove
vulnerability, but it creates redundancy. A city that depends only on foot traffic is more
exposed. A city where businesses operate through both physical and digital channels has
more room to adapt. When one channel weakens, another can partially absorb the pressure.
In Malaysia, this has practical significance. Monsoon floods disrupt road access. Traffic
congestion affects delivery reliability and business productivity. Urban households
increasingly expect convenience, speed, and flexible services. Under these conditions,
digital capability becomes part of economic resilience. However, digital resilience is not
automatic. It depends on infrastructure quality, affordability of digital tools, platform fairness,
logistics capacity, data governance, and the ability of small businesses to participate. Large
firms are often better positioned to use data and optimise delivery networks. Small retailers
may struggle with platform fees, digital skills, and visibility in crowded online marketplaces.
This is where urban policy matters. Cities need reliable broadband, efficient logistics spaces,
flood-resilient infrastructure, inclusive digital support for small businesses, and better
coordination between land use planning and platform-driven urban activity. The digital
economy should not be romanticised as a cure for urban vulnerability. It is better understood
as an additional layer of resilience. It gives businesses alternative ways to reach customers,
gives cities better data to manage disruption, and gives local economies more flexibility
when physical systems are under stress.
The digital economy has not made land less important; It changes what makes land
valuable. In Kuala Lumpur, urban value is now shaped by layered interactions between
roads, buildings, zoning, foot traffic, digital reach, and algorithms. Yes, location still matters,
but rules that define a valuable location are being rewritten.
The authors are Senior Lecturers at Faculty of Built Environment, Universiti Malaya.
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