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World: Analysis From Washington -- The Death Of Geography

Washington, 25 October 1999 (RFE/RL) -- The information revolution sweeping the world today is currently undergoing a fundamental transformation, one which appears likely to generate far more dramatic social, economic, and political consequences than many of the originators of this revolution had expected.

Like the industrial revolution of two centuries ago, the revolution in information technology has gone from an initial stage in which people were able to do what they had been doing more easily and quickly to a second one in which people are able to do things that they have never done before.

That shift, management theorist Peter F. Drucker argues in the current issue of the U.S. journal "Atlantic Monthly," is going to transform the relationship of human communities to geography. But while the second stage of the industrial revolution helped knit countries together, the second stage of the current information revolution threatens to undermine the meaning and even existence of the modern nation state.

In his article, Drucker describes how the industrial revolution proceeded in Europe in the eighteenth and nineteenth centuries and then uses that as a model for describing the period of rapid change that computers and the Internet have ushered in.

Initially, he suggests, the harnessing of steam power simply allowed individuals and groups to do what they had been doing far more efficiently rather than to do anything new. Steam engines allowed increased production of cloth, for example, but they did not change either the way cloth was produced or the way it was marketed.

But when the steam engine was harnessed to transportation in the new form of railroads, Drucker continues, the industrial revolution entered a second phase in which it allowed peoples and groups to do some radically new things.

This unprecedented and dramatically faster form of transportation not only allowed businesses to sell their products over a vastly larger area, but it meant that governments were in a position to unite far larger territories under their effective control and even to unite whole nations by wiping out much of the local particularism -- dialects, customs, and loyalties -- that had existed up to that time.

As a result, Drucker says, the steam engine and the railroads helped to power the rise of the modern nation state and thus helped to create the international system the world has known for most of the last two hundred years, developments that none of the developers of the steam engine anticipated.

Since World War II, Drucker suggests, the information revolution has followed a similar pattern, but it is one that he argues will have entirely different, if equally unanticipated social and political consequences.

With the development of computers after World War II, individuals, businesses and governments were able to perform many of the functions they had always carried out but in a far more efficient and rapid way. The storage of information, the management of industrial processes, and the supervision of society by the state all became easier, but, Drucker continues, the computer itself did not really change these processes.

But with the introduction of computer networks and especially with the rise of the Internet, the information revolution has entered a new phase. By tying together people around the world without regard to national or political borders, the Internet has created both an increasingly unified international marketplace and dramatically expanded ties among individuals and groups beyond the power of the state to control.

Concerning the economic impact of the Internet, Drucker gives the example of a pottery firm that had controlled most of a local market until its customers discovered via the web that they could purchase pottery, a heavy and traditionally locally produced good, from half a world away at lower prices.

Initially, the local pottery firm did not respond to this new reality and lost market share, but with time, its managers have recognized that they cannot count on geography to protect them and that they must compete with all other pottery firms regardless of how far away they may be.

Such conclusions, Drucker says, have already had a significant impact on how managers approach their work. They must pay attention to larger forces than they ever did before, and they must control costs in response to these larger forces and not just in response to the local market.

As dramatic as these consequences have been, Drucker suggests that the social and political impact of the Internet may be even greater. By linking individuals across the world and severing many territorially-based ties, the Internet represents a serious threat to the way in which nation states do business and hence to their continued existence in their current form.

For many people, these new Internet-based connections are far more important to their lives than are their links to the state or even to the people living close to them. They are forming virtual communities over which real states and even real nations are likely to have less and less influence. And some governments are now using the Internet to develop and expand ties with members of their nation living far beyond their state borders.

None of this was anticipated when the computer or even the Internet were introduced, Drucker argues, and none of it is going to happen immediately everywhere or without resistance. But just as the modern state system rested on the railroads, the post-modern system is likely to have the Internet as its foundation, a shift whose ultimate consequences, as Drucker himself admits, no one is yet in a position to predict.