Saturday, May 30, 2009

How to acheive a true digital economy

The Associated Press has issued a weekend thumb sucker largely based on Richard Florida's piece in the March issue of Atlantic Monthly titled How the Crash Will Reshape America.

Summed up, the AP article posits America has undergone a boom and bust cycle in the Sunbelt, creating "an obsolescent model of economic life" based on cheap real estate that encouraged low-density sprawl and created a work force 'stuck in place' and tied to homes cannot be profitably sold.

This is in large part because the Sunbelt migration boom of the 1980s and 1990s has ended and Americans are moving far less frequently than in the past. That's hardly surprising given the mega demographic group of the Baby Boomers is aging and less inclined to move every 6 to 8 years.

To replace this obsolete economic model, the AP article quotes Florida as proposing a "digital age" alternative in which jobs will cluster in what some have called super metro regions such as the Boston-New York-Washington and Los Angeles-Orange-San Diego corridors. Florida argues that these areas will concentrate highly educated professionals and creative thinkers who can drive future economic growth.

I appreciate Florida's view that these creative processes flourish best when these creative types interact and collaborate. But Florida's digital age sounds more to me like a throwback to the industrial age that saw people migrate from the countryside and concentrate in cities that in turn became today's metro areas.

In a true digital economy, population and information-based work would be more evenly distributed, mitigating the need for people to concentrate in congested, high cost metro areas. Moreover, socio-economist Jack Lessinger predicted in his 1990 book Penturbia that Americans will opt out of these areas in search of slower paced, less crowded and improved quality of life in less populated regions of the nation. And true community instead of the shallow, enforced faux community of privately governed homeowner associations that have proliferated in the Sunbelt states over the past two decades. I believe Lessinger will ultimately be proven prescient.

To achieve a true digitally-based (and incidentally, less petroleum-based) economy, the United States must ensure the near universal deployment of fiber optic telecommunications infrastructure capable of supporting symmetric, business class Internet-protocol-based applications including video conferencing. This is the best way to avoid future real estate bust and boom cycles of the kind Florida describes. As some have simply put it, move bytes, not bodies.

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