Last updated on August 16, 2024
Ann Arbor, a quintessential college town in the state of Michigan, rarely makes the news. This year, the demise of Borders, one of the largest bookstore chains in the U.S., put Ann Arbor in the news because the company was founded there and had its flagship store in the city. Falling book sales since the mid-2000s drove the chain into bankruptcy and, after failing to find a buyer, it began liquidation this summer.
In 2009 Ann Arbor made the news when the Ann Arbor News, the city’s local newspaper, stopped printing and turned itself into a Web-only publication. Ann Arbor became the first city in the U.S. not to have a printed daily paper.
Yet, Ann Arborites are avid readers. The city is home to the University of Michigan, one of the leading research universities in the U.S. and has one of the highest per capita levels of education in the country. For many years, the city had the most bookstores, used and old, per capita, of any city in the country. Today, Ann Arbor ranks near the top in per capita sales of Amazon.com’s digital Kindle books.
Ann Arbor is also my hometown and it was clear during a visit this summer that the city is a media and retailing trendsetter. During walks around town, I noticed that there were many more restaurants and coffee shops than I remember. I noticed more specialty clothing stores and touristy gift shops, but fewer of the niche specialty shops that were once a source of local pride.
What happened to Ann Arbor and what does it mean? The city has become one of the first “virtualized cities” with a distinct physical and virtual division in life activities. If activities, such as buying and reading books, can take place virtually, then the virtual world wins. Activities, such as drinking coffee and buying clothes that require physical interaction remain in the physical world. Books can be ordered and downloaded from the Internet, but coffee (and the caffeine that comes with it) cannot.
Ann Arbor virtualized early because of its educated population and the large number of technologically savvy university students. As virtualization spreads, it will change cities profoundly. Large retail spaces will no longer be needed, and offices will shrink in size. At some point, cities will have to deal with large amounts abandoned retail and office space. The trend is already clear in New York because many buildings in the Financial District are being converted from offices to residents. New York is lucky to have such demand, but many cities have are not.
All of which leads to some interesting questions for Korea, one of the most wired nations in the world. Korea has yet to be virtualized. To be sure, e-commerce is big business in Korea, but it augments established physical retail activity. Korean companies still concentrate their operations in large office buildings and telecommuting is rare.
A few niche retail markets have been virtualized in Korea. The rise of music downloads from the Internet put most music shops out of business in the early 2000s. The number of local bookstores has declined as the market for physical books focuses on large chain stores, which are also active players in e-commerce. The spread of discount department stores in the early 2000s hurt many local open markets.
Things could change very quickly in Korea if virtualization gained force because the Internet and communications infrastructure is so strong. Like Ann Arbor, bookstores could vanish very quickly as e-books take off. Like New York, offices in expensive areas could empty out as operations are dispersed and telecommuting takes hold. Discount department stores and supermarkets could face strong competition from e-commerce retailers as people tire of fighting crowds.
A virtualized cityscape would leave much retail and office space struggling to fill empty spaces, particularly as the population ages. Over time, Seoul and other Korean cities will face the question of how to reuse buildings that once held retail and offices. What legal structures and incentives will encourage conversion of use and expansion of mixed use? What happens to unnecessary and unconvertible spaces? How cities answer these questions will have a profound effect on the cityscape.
Virtualization in Korea, however, is not a given because the physical and virtual worlds mix and complement each other. This is why Koreans often call and ask if you have received an e-mail message. The phone call adds a personal touch to otherwise dry virtual business. Mixing the physical and the virtual into an eclectic whole may help Korea develop a new model of city life for others to emulate.