Making a Different Kind of Big

"Geography is dead!"

This pronouncement has become a cliche among the advocates of digitalization and telecommunications. The advent of universal and inexpensive communication is said to usher in an era where distance, place, real estate, and geography are irrelevant. The notion is only half true.

Place still matters, and will for a long time to come. However, the new economy operates in a "space" rather than a place, and over time more and more economic transactions will migrate to this new space.

Geography and real estate, however, will remain, well...real. Cities will flourish, and the value of a distinctive place, such as a wilderness area, or a charming hill village, will only increase.

Tom Peters, the perennially entertaining management guru, likes to scare the daylights out of dazed American CEOs by proclaiming, "Think of Asia, Latin America, Eastern Europe! They're smart, fast, and cheap. And they're next door. Your worst nightmare of a competitor is now only one-eighth of a second away!" That's the maximum time it takes a signal to travel from one end of the globe to the other. These hungry competitors can do anything you can do, cheaper, and they all are, at most, only an eighth of a second away. In short, Peters proclaims the death of distance and the arrival of globalization.
That's the bad news. The good news is that those geographically far away competitors will never be any closer than an eighth of a second. And for many things in life, that is too far away.

A kiss for instance. Or playing sports. Or getting to know flowers. Start-up companies selling futuristic multiplayer online games have discovered that the inherent delay in the speed of light circling the globe causes real-time experiences to fail. That noticeable gap makes no real difference in the transmission of a book order, or a weather signal, but enough of life thrives on subtle instantaneous responses that one-eighth of a second kills intimacy and spontaneity. Thus actual real-time face-to-face meetings will retain their irreplaceable value. Thus airline travel will increase as fast as online communication increases. Thus cities will endure as lag-free places where there are no one-eighth second delays.



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This is a blog version of a book of mine first published in 1998. I am re-issuing it (two posts per week) unaltered on its 10th anniversary. Comments welcomed. More details here.
-- KK