Does information revolution pose threat to nation's center cities?

The Outlook

October 29, 1995|By Timothy J. Mullaney

AS INFORMATION technology has continued to advance, it has become clear that computers increasingly allow businesses to cut the fetters that once tied them to center cities or other specific locations. The ability to electronically transmit vast amounts of data makes it possible to move work virtually anywhere, raising fears not only that jobs will move to the suburbs, but to remote -- and cheaper -- areas, such as South Dakota.

How real is the threat? Congress asked its Office of Technology Assessment to investigate, and one of OTA's last acts before being closed by the GOP majority was this month's report, "Technological Reshaping of Metropolitan America." We talked with the author and two consultants on the report.

Robert D. Atkinson

Former senior analyst, Office of Technology Assessment

The bottom line is that already hard-hit central city economies will suffer the largest brunt of this change.

Information technology basically gives companies and some individuals the opportunity to move and not suffer economic consequences. The motivations for the moves are related to office space, taxation, labor costs, and also crime, traffic and pollution. Technological change is not one of the bigger [causes]. Technology is enabling this.

In most areas, we have a metropolitanwide economy with as much or more activity being in the suburbs as in the city. In Baltimore, 60 percent of commercial office space was in the suburbs by 1988.

Its predominant effect is in the services. Services are what kept central cities from falling completely apart in the 1980s. Between 1967 and 1987, Baltimore City lost 56,000 manufacturing jobs, 12,000 retail jobs, but it gained 34,000 business service jobs. That's generally the story you see in every city in the U.S. What has stayed in the core are higher-end services [because those jobs require the most face-to-face contact with customers].

The sectors that did the best in staying in the central city were legal services, accounting, educational services and medical services. But from 1985 to 1992, counties [that included major cities] lost market share in all those sectors.

In central cities, blue collar jobs that provide a decent wage for workers with a strong back but not a lot of education or skills are basically gone. The more complex jobs require lots of face-to-face contract, so urban economies have become more skilled.

Mitchell Moss

Director, Urban Research Center, New York University

Communications technology does not replace face-to-face communication. In many cases, it reinforces those central cities that are important information hubs.

Inner cities are not destined to die, but there's going to be an income disparity between those cities that can take advantage of technology and be connected to global markets and those that have an unskilled labor force, decaying infrastructure and a lack of new business formation.

Simply put, we may see some cities get worse and a handful do very well.

For a city to succeed, it will need a knowledge-producing industry, a highly skilled labor force, and a set of businesses that can harness those two together. The public sector's job is to provide skilled labor, to have a first quality infrastructure for moving goods and people, and finally for making the quality of life in cities attractive enough that they can be competitive with outlying areas.

Marie Howland

Director of Urban Studies and Planning Program, University of Maryland

The hypothesis has always been that cities would become obsolete because people could locate anywhere and communicate thru teleconferences and e-mail. But what we found is that this, in fact, is not happening.

You've had this counteracting pull that more complex transactions require more face-to-face interaction. Bankers used to just take deposits and hand out money over the counter. Now they're helping customers with investment planning. It's a lot more complicated than it used to be, and that means you have to meet more face to face.

What that means for cities is that we see decentralization, but it's decentralization that ends at the suburbs. It's not going way out in the rural areas, and cities are not obsolete. But central cities do face increased competition from suburbs. Companies locate in the suburbs, go downtown for the face-to-face meetings, but they can do a lot of work [electronically]. The technology has freed them to decentralize some, but they still need to be close enough to have a face-to-face meeting.

The services that were decentralized [to rural areas], they're being mechanized. That's declining because it's being replaced by scanners or going abroad.

Strategies that make sense are linking schools to workplaces, to make sure the [inner-city] labor force can move into the job market. You need to get urban workers to where the jobs are, and you have to have them have the skills.

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