Future spatial impacts of telecommunications

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Abstract
Telecommunications, like transport, is a friction reducing technology. In view of the growing role of this technology in economic activity, forecasting its spatial impacts is drawing attention. Decentralization of activities is a common hypothesis, but concentration is also often mentioned. This paper claims that it is premature to offer generalizations about the spatial impacts, and instead, it deals with the complexity of forecasting spatial changes that can be attributed to this technological change. It argues that due to the fact that innovation geography (i.e., the location of knowledge centers), and spatial variations in supply side and in demand (adoption and usage) necessarily imply that very different diffusion patterns and spatial change can take place. Understanding the behavior of suppliers, users and government intervention are crucial for forecasting the spatial impacts. Further, the effects of scale, prior distribution of activities, the demand for information, organizational structure and logistics of economic activities are identified as important moderating factors which can direct spatial change towards concentration or decentralization.

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