Not So Footloose after All: Locational Behavior of Information Technology Establishments in the United States, 1989-1998
Among the benefits that technology can provide is greater connectivity among economic agents. Commerce now occurs across great geographic distances at nominal transaction costs. Technology, therefore, seems to have the potential to unshackle economic agents from their suppliers and customers, enabling them to seek out alternative locations without being at a comparative disadvantage to other businesses. This possibility has spawned the “death of distance” notion that distance no longer matters, that technology has made all locations equal. Such thinking has been encouraged by phenomena such as the widespread “outsourcing” of many back-office and service functions by U.S. firms and/or the location of many of these functions in India and other foreign countries.
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