Digital Information Systems (DIS) - electronic systems that integrate software and hardware to enable communication and collaborative work - are increasingly used to manage global production networks (GPN). There is a widespread belief that these developments create new opportunities for organizational learning and knowledge exchange across organizational and national boundaries, hence making knowledge more spatially fluid. This would have important implications for the location of knowledge intensive activities worldwide and the global distribution of income. The paper assesses these expectations. We conclude that, despite DIS, the fluidity of knowledge remains, to a large extent, constrained in space.