Enabled by Industry 4.0, new forms of productive value creation emerge in urban spaces. But how the value creation of new digital urban production (DUP) differs from that of incumbent manufacturing and how it benefits from urban contexts remain unclear. Closing this gap, we study DUP firms in selected cities of North Rhine-Westphalia, Germany. Results indicate that DUP integrates production and design, and it displays circular problem-based value creation to develop complex production-related solutions. At urban locations, DUP draws particular advantages from proximity to customers, employees and knowledge – conducive context qualities which outweigh the ‘footloosening’ powers of digital tools.
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