In Sydney, Australia, the emergence of a late-night economy (LNE) has been a response to its role as a global financial centre, a world city, and a tourist destination. The City of Sydney Council considers itself at the vanguard of promoting and managing a vibrant, diverse, and sustainable LNE. The council works to improve business diversity, encourage growth in commercial centres that can accommodate it, and cap growth in centres that are thought to have reached capacity. However, it is difficult to inform future policy directions through the experiences of other areas of Sydney or even other Australian cities as there is no detailed evidence on which to base policies, nor is there a uniform ‘best practice’ in current policy directions. This is a significant problem for the city, one that will become increasingly important for other Australian cities and international locales as their LNEs also expand. This paper aims to improve the understanding of the merits of clustered and dispersed LNEs. The discussion is expanded by a brief examination of evidence from other world cities outlined through a review of existing literature which focuses on the current socio-cultural, economic, and political concerns that surround a LNE. The project’s scholarly significance lies primarily in its triangulation of three fields of literature: the extensive economic literature about developing industry clusters to promote growth and innovation, the growing role of the LNE in the broader economic growth of the city, and the social and environmental impacts of the LNE, particularly the role of business clustering in generating social and environmental impacts