Undercover Economist

Keep it real – Undercover Economist

It stands to reason that distance is dead. Electronic communication is better and cheaper than it’s ever been. Sitting on the sofa just now, I used a cheap laptop computer to log on to my neighbour’s wireless network and order a free quad-band mobile phone that – I am told – will let me make calls and send e-mails from almost anywhere in the world.

More to the point, nobody would be remotely surprised to hear it. Virtual worlds, BlackBerries, video-conferencing from the local Starbucks – it has all become so easy, and so commonplace, so quickly.

Intuitively, that should mean that geography becomes 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 Anglesey 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 fall in the cost of transporting goods, for most people geography seems to be as important as ever. People haven’t stopped flying for meetings and conferences; the World Economic Forum meetings are now a round-the-calendar circus in more than 10 countries. New York is one of the few places in the US where the property market isn’t stuttering. In the US, a few hotspot cities are sucking in ever-larger concentrations of young educated workers.

So what is happening? To some extent, the same thing that happened to the paperless office…

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