City or Country: Where do Businesses use the Internet

I found this article to be very exciting. I had never considered the Internet to be a tool that would change the style or location of where a company would do business. By looking at the Internet in this position, one can immediately realize the heavy economic change that this would pose to society. Currently most large companies reside in many major cities all across the world. Certain types of companies also inhabit certain cities, for example: automakers in Detroit, film production and distribution in the Los Angeles area, and financial services in New York. This article states, that through the availability of the Internet, these companies will be able to relocate to into rural areas. This would then allow the companies to create global villages, where they can communicate all around the world with the Internet and no longer have to be located near each other. If the companies moved out of the cities, they face immediate drawbacks, such as having to build a new office and learning to work without the availability of unlimited resources that you would have access to in the city. If the companies moved to rural areas, I also think they would downsize, since they could outsource work through the use of the Internet.
I feel that even though the Internet allows the possibility for companies to relocate to rural areas, majority of companies will stay in their city locations so that they can be in the heart of the industry. If they moved to rural areas, they would always be behind the times and constantly catching up with their competitors. The idea of relocating to the country is the same idea as telecommuting. It just doesn’t work. It removes people to much from the internal structure of the company which results in the marginal benefits of working outside the city being far less then the marginal cost of working in the city.

http://www.frbsf.org/publications/economics/letter/2004/el2004-24.html