Tim Harford, the “undercover economist” at Slate Magazine, explores what he calls the “distance paradox”:
Virtual worlds, BlackBerrys, video-conferencing from the local Starbucks — it has all become so easy — and so commonplace — so quickly. Intuitively, that should mean that geography has become less important. E-mail and video-conferencing mean fewer flights. No more business conferences or meetings at Davos. Telecommuters don’t need to clog up the roads, and property prices in London and New York should slide as people carry out their investment-banking responsibilities from Yorkshire or Iowa.
It doesn’t take a genius to figure out that there’s something wrong with this argument. Despite the ease of communication and the drop in the cost of transporting goods, geography seems to be as important as ever for most of us. …
So, what is happening? To some extent, the same thing that happened to the paperless office. … Internet networking, and cheap phone calls have made it easy to maintain a lot of relationships. … E-mail and mobile phones aren’t substitutes for face-to-face contact at all. As economists Jess Gaspar and Ed Glaeser have pointed out, they are complements to it.
That’s one of the key points to emerge from my Q&A with Mark Golan, the executive in charge of real estate for Cisco Systems. The nature of work is changing. On the one hand, it gives some people more flexibility to work from home. On the other, work is becoming more collaborative. White collar workers, managers and executives spend an increasing amount of their time in meetings. Technology has yet to diminish the need for face-to-face time.
Back to the main themes of Bacon’s Rebellion: First, there is a time and place for telework as a substitute for commuting. But it’s not a panacea. Second, the “collaborative economy” explains why “primary” jobs (as opposed to “secondary” retail and service jobs) aggregate in major metropolitan areas: People must maintain physical proximity to one another in order to collaborate on a daily basis. The tendency of jobs to aggregate in urban clumps appears to be stronger than the countervailing tendency of technology to liberate people from the confines of geography.
(Hat tip to Will Vehrs for pointing me to the Slate article.)
