Location, Location, Location - online services; electronic commerce - Industry Trend or Event

Industry Standard, The, Oct 30, 2000 by James Fallows

Remember that theory about how the Internet would make physical location less and less important? Turns out, almost no one really believes it.

Six weeks ago in this space, I asked for the best proof of something that "everyone knows" will be true of the Internet Age but that somehow hasn't come true yet. That is the idea that as communications becomes better, faster and cheaper, physical location will matter less and less. If people can contact each other through e-mail and instant messages, if they can collaborate on work projects with online software and enjoy shared cultural and entertainment experiences through broadband transmission, then presumably they can live wherever they want and forget about nuisances like finding a parking spot near work.

This, at least, is what the futurists have been saying -- but it seemed to require a more formal defense. While some parts of daily experience conform to the "location doesn't matter" hypothesis cell phones, pagers and e-mail make it hard to escape the office wherever you are -- others have remained puzzlingly out of sync. A decade's growth in networked communications, far from eliminating the need to meet or travel, has brought us more clogged highways, more jammed airlines, more costly real estate in the few chosen areas where high-value industry wants to congregate. I therefore offered a tasty free meal and drink to the person who could best explain this anomaly and demonstrate why and when the Net would free us to live in Tahiti while "working" in midtown Manhattan.

The beauty of this contest is that I don't have to pay up. While more than 100 competitors submitted clever, thorough entries, only two people even tried to argue that the prevailing view was true, and even they didn't have their hearts in it. Everyone else took the chance to argue the opposite case: that the time when the Internet would make location meaningless was (as many people put it) "never." The increasingly frantic travel and commuting of the Net age was no transitional oddity, most people claimed. It was a preview of the future, since network communications paradoxically makes face-to-face contact more important than ever before.

The entries were fresh and impressive enough to make me relent and reinstate the offered prize, but I'm getting ahead of myself. First, a sampling of the main lines of argument.

* Broadband can never be broad enough. This was by far the most popular theme. Contestant Ed Rigdon wrote, "I think the hypothesis is false. Like the early e-tail idea of stores without inventory that still deliver great service at low prices, this 'irrelevance of location' idea ignores the critical role of social context in giving value to information and in facilitating cooperation and risk-taking. ... I know people who work remotely, but they will remain the exception rather than the rule. For the most part, these people pay a substantial price, in terms of what they are missing, in order to gain the benefits of their remote location."

In a similar vein, from Rick Craig: "Even in the area of sales, I have found no substitute for face-to-face meetings. We have a reasonable record of closing training/consulting deals using the Internet, mail, etc., but have an almost perfect record when we have actually gone to visit the client in person. Is it the medium? Is it training in how to use the technology? Is it that by actually arriving on the client's doorstep, we show that we're serious? I don't really know. But for the moment, I'm going to rack up some serious frequent-flier miles. I personally believe there will never come a time when advanced technology replaces face-to-face human interaction."

And from Vince Gulotti: "Location and personal contact will never cease to be as important as it once was because people need interaction to experience fulfillment in their lives. E-mail, Webcasts, wireless messaging, etc. are a way to communicate. But to accomplish meaningful tasks, human interaction is needed. Advances in transportation have made the world a smaller place. Therefore getting to needed locations is all that much easier. Technology will never replace the importance of location and human interaction."

* The more people we deal with online, the more we need to meet face to face. Matthew Brach wrote: "As the number of 'contacts' increases, our demand for maintaining those contacts increases. So, a world that is more wired actually increases the need for travel and movement across space, because we have more contact points to keep in touch with. In society, face-to-face contact still carries large emotional and psychological importance. So location becomes more important if the ability to move does not increase correspondingly." He used the example of the mounting airline hell to explain why companies in one industry concentrate in the same place. The harder and slower it is to get in and out of, say, the San Jose, Calif., airport, the stronger the temptation to move to the Silicon Valley to be close to your contacts.