Economic Geography

11 Digitizing services 
What stays where and why
Martin Kenney and Rafiq Dossani
The spatial extension and deepening of capitalism has been a topic of interest to
geographers, other social scientists, and activists since, at least, Lenin. This topic
has reappeared on the public agenda recently under the rubric of ‘globalization’.
Once again, the spatial redistribution of economic activities is sparking enormous
controversy and opinions from nearly every philosophical position. This chapter
considers two dimensions of this enormous topic and argues that neither dimen-
sion has received sufficient attention from geographers. The first dimension is the
role of technological advancement in transportation and communication technolo-
gies in a capitalist system. The second dimension is the development of a global
division of labor in service provision.
In 1980, Frobel et al. hypothesized that a new international division of 
labor was being created within which low skilled manufacturing work, which had
previously been located in the developed nations, was being transferred to devel-
oping nations to take advantage of low-waged, mostly female workers. At the time,
they suggested that this was an inherently unequal exchange and that the workers
in both locations were victims of this relocation. This essay will not engage the
debate about the exploitation of low-wage workers in developing nations except
to assert that the plight of these workers has received an enormous amount of
attention from geographers, sociologists, anthropologists, professors of women’s
studies, and social activists. Quite naturally, in their zeal to struggle against the
very real and shocking work conditions under which these workers labor, they
have focused on a few industries particularly garments and shoes (industries
known in the developed world for shocking labor conditions), and, to a much
lesser extent, electronics. It is remarkable how social science researchers have
reduced the integration of the developing nations into the global economy to
garments and shoes. This fixation has had the unfortunate effect of resulting in a
one-sided understanding of globalization
This essay directs attention away from these infernal mills to the two dimensions
that I believe will have a far more significant effect. Consider the implications 
of how the rapidly evolving global transportation and communications infra-
structure is tying the global economy more firmly together. The globalization of

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manufacturing is being followed by a global redistribution of white-collar work.
This has only recently begun. As this advances, it will lead to a fundamental
geographic redistribution of work that is also nearly certain to have profound
effects on the global economy. These two themes are not new as Dicken (2004)
touched upon these in his lament that geography was being left out of the 
globalization discussion. To presage my concluding discussion I will argue that
geography has been so swept into the study of clusters and the interest in cultural
studies that it is missing the macroforces that are transforming the world 
economy.
This chapter speculates on the implications of the digitization of work and
what the global improvement in telecommunications and transportation
networks means for the creation of a global work force and, by extension, a
global labor market. This will threaten those in developed nations whose skill
levels are not sufficiently superior to those in developing nations to justify receiv-
ing developed nation’s wages. For all economies it suggests, ceteris paribus, that
workers wherever they are will be rewarded more equally.