Why the Web may unleash the largest construction boom in history

The rise of ships, trains, and cars transformed cities and the way we live. Now it’s the Web’s turn.

The Internet has already reshaped our mental space. Thanks to the Web, the way we read, recall, and relate is vastly different from the way it was just 15 years ago. Today, an even bigger change is afoot. The Internet is about to change our physical space. And this change may well usher in the largest construction boom in human history.

This goes far beyond laying fiber-optic cables to reach every home. It will entail rebuilding our cities, suburbs, the places we work and shop, and our homes. The best news of all is that the jobs required to make these changes will be high-paying local jobs, isolated from low-wage foreign competition.

Every important advance in the way we interconnect has spawned a construction boom. Civilization demands a different physical infrastructure to derive the full benefit of the new technology.

Connections promote growth

In ancient times, the advent of wagons, domesticated animals, and crude ships made possible the first cities. They were all needed to bring food and fuel to support the lives of city residents. Centuries later, sailing ships that could cross oceans and bring back exotic goods led to the growth of great seaports like New York, London, Venice, and Genoa. The railroad necessitated the building of thousands of miles of track, changed the configuration of cities, and ushered in the development of suburbs near major rail stations. It also led to the creation of industrial cities such as Manchester, England, and Pittsburgh, with their working-class slums – a distasteful side effect. Most recently, cars created a construction boom – highways, shopping centers, office buildings and factories outside the city, and suburbs.

The Internet, the world's most powerful interconnection technology, will similarly drive tremendous changes to our physical world.

Much of our current physical infrastructure is really an information proxy. We go to the office to communicate with others, access our files, and facilitate the interaction between customers and business operations. We go to retail stores to find out what is available, check prices, and see how merchandise looks. But if we can move information cheaply enough, there is less need for either these locations or our physical presence there.

Physical presence is very expensive. It costs a lot to get from where you live to where you work or shop. Office and retail space are expensive to build, rent, and maintain. Keeping the space cool in the summer and warm in the winter, and clean at all times, is expensive as well.

When I shop in virtual space, I reduce the need for bookstores, drugstores, and many other retail functions. Many retail functions will shrink to vanishingly small size or evaporate. Do you remember when travel agents were everywhere?

Today our office is our computer. Physical mail and the need to sort it and deliver it is less important. Most of our files are electronic. Many of us spend little time at our office desks and more time working at home. More firms are having their employees share office space or are making offices very small and sharing conference space.

There are many business processes that can be made more efficient and can be engineered to take up less space. Fewer clerks are needed for order entry. Purchasing functions can be streamlined. Using information systems to manage the supply chain and factory floor reduces the need for manufacturing and warehouse space.

The implication of all of this is quite clear. If we can move information cheaply and quickly in the Internet Age, then less retail, factory, and office space will be required on a per capita basis.

Much of the existing space will eventually be repurposed. Office buildings and shopping centers will be torn down and become locations for apartment buildings – a repurposing construction boom. This is already happening in edge cities like Tysons Corner, Va. But I suspect that is only a minor portion of the construction boom.

Many of our homes and neighborhoods were built to take advantage of a car-centered economy. They're simply ill-suited to take full advantage of a Web-based economy, so a major migration of American workers – along with the construction it entails – is coming.

On a modest scale, as more of us spend more time working from our homes, we will want better home-office space to accommodate computers, desks, and other office equipment – a fairly basic renovation.

Since there will be less need to travel, public transportation will become both more valued and more practical, especially if it allows people to give up an expensive car. If I only go to the office twice a week, why not trade in my car and ride the train with a good wireless connection? This will increase the demand for public transportation and will lead to more construction.

Walking-friendly cities

On a major scale, there is a good chance that the Internet Age will compel many of us to live in walking-friendly cities. This migration will motivate us to rebuild our cities in the image of the late urban theorist Jane Jacobs, with mixed neighborhoods where people can live, work, shop for the essentials, eat out, and entertain themselves all within walking distance of their homes and apartments. With the Internet supplying us with so many work, shopping, and entertainment options, this type of city structure becomes very appealing. So our cities will be repurposed for the Internet Age just as the railroads repurposed cities in the Industrial Age.

It is safe to assume that virtual travel will become less expensive and more effective, and that physical travel will cost more and be less convenient. Also, since it is so easy and inexpensive to move information, there will be less need for physical travel. Why get on an airplane when you can videoconference from your home?

Just as Henry Ford may not have predicted the rise of drive-in movie theaters when he invented the Model T, the Internet Age will produce changes to our physical landscape that we can't now envision. And other changes that we do expect might never happen, or might happen in a different way. But what I am certain will happen is that the Internet will drive the physical restructuring of society. The sooner we begin building society with a physical infrastructure attuned to the Internet Age, the sooner our economy will revive and jobs begin to appear.

Bill Davidow has been a high-technology industry executive and a venture investor for more than 30 years. This essay is based on his latest book, "Overconnected: The Promise and Threat of the Internet."

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