The Longevity of Agglomerations

We talk often in one of my classes about the notion of agglomeration
economies; that is, that like companies will congregate near each
other, for the critical mass of workers, ideas, and other useful
resources. A student asked in one class if agglomerations had evolved
or would evolve over time, as technology made distance less relevant.
That is, clusters happen because distance makes it harder to
communicate and collaborate, so will technology eventually make
distance and therefore agglomerations obsolete?

Perhaps I will be seen as hopelessly old-fashioned a hundred years
from now when I say that people will always want to be near each other
and have that physical contact. After all, a trip to what is now the
suburbs used to be a couple days' journey a hundred years ago, and now
people do it everyday to go to work.

But I think what will give agglomeration economies staying power is
the power of being near a university. After all, many of the best
examples of agglomeration economies are industry clusters near
universities that specialize in that industry. Think of San Diego or
Austin or Boston or Raleigh-Durham. Distance learning's potential
aside, I think that universities will always be physical locations
where students and faculty gather to learn, experiment, and interact.
And therefore, businesses that seek their brains, their energy, and
their ideas will want to be nearby.