As a popular online car-shopping ad demonstrates humorously, in the virtual world we can try many variants of a product at a low cost. However, once we make our choice and want a physical product, today's limitations of transportation, inventories, and manufacturing processes come back with a vengeance.
Point-to-point automated delivery of parts and subassemblies in minutes, directly from one factory work station to another, throughout a large metropolitan area with millions of workers and thousands of businesses will make the convenience of the virtual world a near-reality for the majority of physical products we buy today. Amazon.com pioneered the idea of a store selling far more books than one physical store could contain. It will be feasible not just to inventory but to build an incredible variety of custom-manufactured goods in hours at a reasonable cost. A suit of any fabric tailored to my exact measurements (LittleShopOfWonders) or an appliance that perfectly fits our kitchen's dimensions and decor can be manufactured in hours and waiting at my corner convenience store (SuperSevenEleven) when I return.
This result has many social implications. First, it will encourage dense cities as manufacturing sites. Where manufacturers in a diffuse 120-mile-long megalopolis like Los Angeles can move parts and assemblies around a few times in a day, a dense metropolis like Chicago or New York/Newark, with a radius perhaps 5 times smaller, can perform that many times more trips in a day, allowing manufacturing to become dramatically more specialized and efficient.
Second, distance will be resurrected as a barrier to imports (DistanceRevived). Labor may be dramatically cheaper elsewhere in the world, but without heroic progress in long-distance travel, labor in Kampuchea cannot deliver a same-day customized product in New York; so wherever that becomes the norm, they cannot compete. This fact will restore to workers in rich countries, physically close to the customers, some of the comfortable home-court advantage that globalization stole from them in the past few decades.
Third, making cities desirable places to live AND manufacture provides an incentive for rich and poor to live in the same metropolitan area, although probably not next door. (Automatically programmed vehicles can control access with magnificent precision.) More: ClassWelfare