Space Counts: Why Physical Flows Matter in an Increasingly Virtual World

We now have technology that can help us to “see” the incredible diversity that surrounds us and recognize opportunities for serendipity. The drawback of these technological amplifiers, however, is that they tend to reinforce the types of people we already know, which can limit the impact of true serendipity.  But the serendipitous connections we make offline can be continued and enriched online, as well.

Creative Cities are Growing Faster

As we’ve discussed, our physical space can be a powerful conduit for serendipitous and unexpected interactions.  Richard Florida has written extensively about the power of cities to spark such encounters: “pedestrian scale neighborhoods … literally push people out into the street, cafes and other third places, encouraging the serendipitous interactions, the constant combinations and recombinations that result in new ideas, new businesses and new industries.” In our 2011 Shift Index, we use Florida’s index of creative cities and US Census population data to create a measure of migration to creative cities.

Not surprisingly, population growth of the top 10 creative cities has outpaced growth in the bottom 10 cities; between 1990 and 2009, the top 10 cities grew by 45 percent, whereas the bottom 10 grew by only 20 percent.  These geographic spikes are often hotbeds for innovation. The talent concentrated there does find more opportunities to develop and learn from each other.  Our analysis for the 2011 Shift Index found a high correlation between the growth of creative cities and the growth of GDP, suggesting that the economic implications of these rich, proximal knowledge flows can be powerful triggers of growth.

Paradoxically, perhaps, it is virtual connectivity that makes the spike city phenomenon all the more important.  Connectivity allows for specialization within a spike location as well as coordination of activities across spike locations.  For example, Silicon Valley was able to specialize in technology innovation and commercialization, while moving manufacturing activities to other spikes in China and elsewhere.  Similarly, today’s technology makes it possible for burgeoning spike cities (such as the growing clean tech hub, Fort Collins, Colo.) to connect with and attract individuals in other areas and gain recognition.

Location Matters

As we spend more and more time in virtual contexts, it can be tempting to downplay the importance of physical surroundings. Not every meeting requires a business trip, and not every creative professional must feel compelled to move to a spike city; however, we need to maintain some balance between the virtual flows of knowledge, and those during our face-to-face interactions.  These interactions, shaped by the places where we live, work and play, can be catalysts for creativity; they spark ideas and build deep, trust-based relationships that may never have developed simply through a chain of emails.

Those of us who actively mine the rich potential of both our physical and virtual environments, integrate both environments, are likely to be much more effective than those who fall prey to the belief that location no longer matters and that virtual environments will increasingly replace physical environments in providing connections and relationships.

Here’s the paradox: as our virtual environments become richer and more widespread, they will amplify, not reduce, the potential value of our physical environments.

John Hagel serves as co-chairman of the Silicon Valley-based Deloitte Center for the Edge, which develops perspectives on corporate growth opportunities.

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2 Responses to “Space Counts: Why Physical Flows Matter in an Increasingly Virtual World”

  1. Thomas Vander Wal says:

    Reminds me of the great chapters Manuel Castells has written on the same subject in his books over the years. Great stuff.

  2. Joe McCarthy says:

    Interesting analysis. I particularly like the emphasis on serendipity, and the importance of physical space in shaping it. While I have enjoyed numerous serendipitous encounters online, my serendipitous encounters offline exhibit far more diversity, as they often involve people I never would have consciously sought out (or even known about). I’m reminded of Melinda Blau & Karen Fingerman’s book, Consequential Strangers (& acquaintances), and the tremendous value we often unexpectedly derive from the people around us.

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