Oftentimes when I talk about the economic benefits of urban agglomeration I get skeptical remarks from someone or other about "the death of distance" but all kinds of evidence indicate that digital communication technology doesn't change the fact that proximity matters. Here's a great example from an August article that I just read yesterday:
A similar lesson emerges from a recent study led by Isaac Kohane, a researcher at Harvard Medical School. After analyzing more than 35,000 different peer-reviewed papers and mapping the location of every co-author, he found that scientists located closer together produced papers of significantly higher quality, at least as measured by the number of subsequent citations. In fact, the best research was consistently done when scientists were working within roughly 30 feet of each other—that is, when they didn't need to interact via screens.
Digital and traditional communications methods seem to be complements rather than substitutes. Online dating services are a clear case. You're using remote interaction to find someone you'd enjoy spending time with in person. But an awful lot of the utility of "social" media is along these lines. You "meet" people who you then meet in real life. Or you maintain ties with people you know from real life, so that the time you spend together face-to-face can be a richer and more valuable experience. One of the main things I do with email is makes plans to meet up with people in person.