You argue that the Internet is raising the salary of academics in top institutions. Good for you who are at the University of Chicago, but what are the consequences for workers in corporate organizations? Will Internet communications change the work-life balance of white-collar workers at large? (Ellen Schmazick, Boston, MA, USA)

I think it will (in fact it already has). Physical proximity to the centers of knowledge has become less important. This is probably a disadvantage for you Ellen, who live in Massachusetts, but it is a great advantage for an Indian living in Mumbai or Chinese living in Beijing. In the old days, your closeness to Boston, a great center of knowledge, was giving you an enormous edge vis-à-vis your Chinese and Indian counterparts. Today this is less so. So you will face a more intense competition. On the other hand, you can have the advantage of telecommuting from home or keep working for your Boston employers’ while living in San Diego.

The “digital divide” is making it more difficult for unskilled people and poorer countries to share in world economic growth. But you say that distant communications may empower talented workers. From Kenya, should I read your results with hope or apprehension? (Thomas Ogutu, Nairobi, Kenya)

I think the internet revolution has provided enormous catching up opportunities for poor countries. In Africa in particular, distances are enormous and the cost of making knowledge available in the old fashion way is prohibitive. With the internet (hopefully soon available via satellite) any village in Africa with a computer and a phone can have instant access to the millions of books. Unfortunately, if a village is so poor not to have even one computer and the people are illiterate, the benefit of the internet revolution will pass them by. But this was true even before. The internet revolution has significantly cut the cost of jumping on the bandwagon of growth.

I am planning to join an MBA within a few years. In your opinion, can distance learning programs, which would allow me to keep my current position and income, be as good as residential programs? (Howard Litch, Charlotte, NC, USA)

The value of an MBA is not only given by the technical knowledge you learn, but also by the overall experience you acquire while interacting with fellow students and faculty. The experience you accumulate while preparing a case with your fellow students and discuss it in class with the professor cannot easily be replicated on line. So an on line MBA is not a perfect substitute for a real one. Nevertheless, as an economist, I understand the cost benefit trade-off. If you want to keep your job a good compromise might be an evening or week-end program, which will give you most (but not all) the educational experience of a regular MBA, while allowing you to retain your job.

Are large firms interested in lobbying governments to restrict distance work practices? (Yang Boon Kiat, Singapore)

I do not think that large firms are interested in lobbying governments to restrict distance-work practices. Large firms might find it economically advantageous to outsource some of their work to distant workers, with lower salaries. To the contrary I expect white-collar workers to lobby the governments to stop that.

Reading the report on your research I got the impression that it does not uncover more than we already know about globalization: that distances are getting shorter. Am I missing something? (Theo Katelaan, Rotterdam, The Netherlands)

Sometimes documenting the obvious is useful, because many things that appear obvious turn out to be wrong. But hopefully my study does more than that. In academia there was a strong conviction that the university where you worked had a large impact on your own productivity. We find that this conviction was true 30 years ago but it is not true any more now. Internet has made it easier for faculty at second-tier universities to produce first quality research. Our claim is that this is not true only in universities. Software programmers in remote location can now contribute the improvement of the programs we work on.

You claim that the quality of research at smaller, more peripheral organizations has improved thanks to the Internet. How will this affect salary differences between firms in knowledge-based industries? (Anupam Tyagi, New Delhi, India)

Better access to knowledge at a distance will tend to equalize wages of knowledge workers around the world.

Will more mobile workers and more intangible products and processes reduce the average size of companies? Will multi-divisional organizations reduce their prominence in knowledge economies? (Simon Johnston)

I think so. It will be difficult for firms to retain their best workers as a subordinate. I have actually written two papers on this topic (see the PDF documents “The Firm as a Dedicated Hierarchy: A Theory of the Origins and Growth of Firms” and “What Determines Firm Size?”).

In many European countries social mobility is very low: it is hard for the smart and the entrepreneurial to succeed if they are not well connected. Your findings suggest that IT advances make proximity, and therefore local relationships, less important. What effect will this have on our society? (Pau Caballero, Barcelona, Spain)

I agree with your characterization of Europe (that is one of the reasons why I moved to the United States). Unfortunately, access to knowledge is not the only obstacle. Access to credit is another big one. For this to change in Europe it is necessary that people become aware of the distortions that are present and fight this problem politically. To make people more aware of these problems I wrote a book called “Saving Capitalism from the Capitalists”.

I run a PR consulting firm and my five employees are located in different countries. We interact via e-mail, Voice-over-Internet and file-sharing on a private network. I am worried of losing control of my employees - who I see a few times a year, and who never see each other. Is my worry justified?

Absolutely. Your employees will remain with you only if either you have some unique resource (like access to clients) they do not share, or if working with you (and with the other team members) make them much more productive. Ideally, you would like both conditions to be in place. I wrote about some of this challenges in the following article (available as a PDF document): “The Governance of the New Enterprise”