New Geography How the Digital Revolution Is Reshaping the American Landscape

FROM CHAPTER 1: DIGITAL GEOGRAPHY In a manner not seen since the onset of the industrial revolution, technology is reshaping the landscape of American communities. Just as the railroad, telegraph, and mass-production factory transformed the social and economic reality of cities, towns, and rural hamlets in the nineteenth century, the rise of the digital economy is repealing the economic and social geography of contemporary America. The digital revolution not only accelerates the speed with which information is processed and disseminated, it also restates the relation of space and time within our communities. Decisions about where to locate businesses, for example--once dependent on questions of access to ports, roads, rails, or raw materials--are increasingly dependent instead on the ability to link often scarce human resources. This trend toward virtualization seems virtually unstoppable; electronic business-to-business transactions, estimated at $43 billion in 1998, are expected to grow to over $1.3 trillion by 2003. As distance has shrunk, much of what has shaped our understanding of geography and place has been transformed irrevocably. Once the world seemed to be made up of unique locations--Texas cattle ranches, teeming and distinct urban neighborhoods, stately old New England towns, relaxed beachside cities. These locations still exist, of course, but ever more, as H. G. Wells predicted a century ago, many of the distinctions between places, between town and city, have become as obsolete as the horse-drawn mail coach. The growing importance of information industries--those involved in the dissemination, processing, and creation of information--has accelerated this process by making more and more of economic growth dependent on nontraditional factors, most particularly the locational preferences of individual entrepreneurs and skilled personnel. In the past twenty years, the share of the U.S. economy captured by these sectors, which range from media and entertainment to telecommunications and computers, has doubled. They now account for roughly two-thirds of the differential between various regions, according to Milken Institute economist Ross DeVol, and for most of the nation's growth in productivity. These changes have resulted in the emergence of a social order, first envisioned by Daniel Bell in the 1970s, in which information supplants energy and conventional manufacturing as the critical source of wealth. Workers in the information field--whose numbers are projected to nearly double between 1994 and 2005--represent the ascendant new middle class of the twenty-first century, earning roughly twice as much as other private-sector workers. The information economy is likely to determine the locale of elite pockets of wealth. In 1984, technology and entertainment industries accounted for twenty-three of the Forbes 400 richest Americans; ten years later, that number had swelled to 57.6 The growth of technology, entertainment, and media since then has further accelerated this trend. These changes profoundly alter the very nature of place and its importance by deemphasizing physical factors--such as access to raw materials and ports--and placing greater emphasis on the concentration of human skills in dense concentrations of population. Why? First, because increasingly, wherever intelligence clusters, in small town or big city, in any geographic location, that is where wealth will accumulate. By its very nature, the emerging postindustrial economy--based primarily on information flows in an increasingly seamless net--frees location from the tyranny of past associations. Even such centers of gravity as Wall Street, Hollywood, and Silicon Valley, though possessing functions and allures that are mutually reinforcing, are increasingly not mandatory for the building of a successful firm or career in finance, film, or the computer industry. Increasingly, companies and peopleKotkin, Joel is the author of 'New Geography How the Digital Revolution Is Reshaping the American Landscape', published 2001 under ISBN 9780375758324 and ISBN 0375758321.