Over the past two decades, the bespectacled nerd, with his plastic shirt-pocket pencil holder and white socks, emerged as the new American superhero. The computer geeks, epitomized by Microsoft's Bill Gates and mockingly immortalized in the 1984 comedy film "Revenge of the Nerds," have been the ones who are ending up with the fabulous house, the good-looking mate and the big bank account.

Well, move over, Mr. Gates. Listen up, Silicon Valley. A new day is dawning over the computer industry. If they made a sequel to that movie now, it might well be titled "Revenge on the Nerds: The Bohemians Strike Back."

As the largely nerd-created computer industry has matured into a communications industry, it has become increasingly dependent on the very kind of creative content not normally associated with the nerd culture -- storytelling, graphic arts and music. Many high-tech companies, from Microsoft to America Online, are scouring the ranks of artists, musicians and writers for people who were once regarded as little more than road kill on the information highway. "Computers are no longer just for geeks," says non-geek Scott Zakarin, director of programming for Entertainment Asylum, the California-based entertainment arm of Northern Virginia's AOL.

But this transformation is more than just a job bonanza for starving artists. Disdaining the bucolic suburban settings that have become home to Microsoft and the Silicon Valley companies, most of the multimedia companies have chosen to locate in decidely urban places such as L.A.'s westside, San Francisco's south of Market district and a slice of lower Manhattan that has been cleverly dubbed "Silicon Alley." At a time when techno-enthusiasts such as George Gilder are castigating cities as the "leftover baggage of the industrial era," Los Angeles, San Francisco and New York have become the creative hotbeds of the burgeoning multimedia industry, bringing new life to once declining neighborhoods. These three areas account for roughly 250,000 multimedia jobs, according to a recent McKinsey and Co. study, far outdistancing all other regions.

Nowhere is the symbiosis between city and creative talent more evident than in southern California, which (along with San Francisco) harbors the nation's largest collection of new media firms. CD-ROMs developed for leading producers such as Davidson and Associates, Knowledge Adventure and Activision rely heavily on freelance writers, musicians and graphic artists who split their time between multimedia work and the more traditional entertainment industries such as television and film. In Los Angeles, there are more than 4,400 motion picture-related service establishments and nearly 100,000 freelance workers.

Ariella Lehrer, president and CEO of Legacy Software, makes extensive use of Hollywood actors to play out the many scenarios in hot CD-ROM games such as "DA" or "Emergency Room." Los Angeles, she says, provides the ideal mix of talent for companies like Legacy. "As the technology gets more sophisticated, you find you go to places like L.A. for the quality product," says Lehrer, 44. "You start getting five-hundred-page scripts with actors and soundstages re-enacting a crime or an operation. Try doing that first-class in a suburb of Atlanta."

In their sometimes rundown, often eclectic ways, urban districts offer a kind of visual stimulus -- in the form of attractive single people, outrageous outfits, ethnic diversity and eclectic architecture -- that has attracted artists and writers for hundreds of years. "City air," goes an old German saying, "makes one free."

As historian Lewis Mumford once observed, cities have enjoyed a veritable "monopoly" on the development of creative industry and the arts since they first formed in ancient Mesopotamia. Artists, storytellers, scribes and sculptors from various ethnic backgrounds would gather in Sumer and Ur to create the rudiments of the world's first sophisticated culture. The ancient city, Mumford wrote, served as a "storehouse, a conservator, an accumulator," a place where "the kinetic energies of the community were channeled into symbolic forms."

Over the ensuing centuries, theater, literature and classical art often originated within city walls, whether located in Asia, North Africa, the Mediterranean or the Middle East. In the ancient world, this process reached its apotheosis in Alexandria, which classical historian Michael Grant has called "the first and greatest universal city." The Mediterranean port city, home to numerous artisans and traders, produced a brilliant cultural life that blended the influence of Egyptians, Jews, Greeks as well as other groups, while also housing the ancient world's most extensive library.

During the Renaissance, cities such as Venice, Bruges and Florence (and later, Antwerp and Amsterdam) not only revived the high culture of classical civilization but also created the forms, the attitudes and patterns of interaction that have shaped great cities to this day. Building on classical models, the great Renaissance centers of culture produced what historian Martin Thom has called "the age of cities."

In the modern era, the great cities of Europe -- Amsterdam, London, Berlin, Vienna and, most especially, Paris -- attracted some of the world's greatest artists, musicians and writers. In the United States, the infant American culture was nurtured by European immigrants who brought with them the great traditions of art, music and the theater. By 1925, New York had already accumulated more than 20,000 artists -- not just from Europe but from the villages and farming communities of the vast North American hinterland as well. Ultimately, the mass migration of artists, scientists and writers during the rise of European fascism completed what Laura Fermi has called "Europeanizing of American culture," with New York replacing Paris and London as the world's creative center.

Similarly, historian Kevin Starr has noted, the migration of German filmmakers, actors and craftspeople -- such as Ernst Lubitsch, Billy Wilder, Peter Lorre, Max Reinhardt and Marlene Dietrich -- helped fix southern California as the epicenter of the global film industry. So pervasive was the Berliner influence that famed film director Otto Preminger, one of the German emigres, was shocked at one Hollywood party to find some of the guests chattering away in Hungarian. "Don't you guys know we're in Hollywood?" the director asked. "Speak German."

Even after decades of relative decline in urban economies, these same cities remain the nation's dominant cultural centers, with New York and Los Angeles together accounting for roughly 14 percent of the nation's working artists. Similarly, actors -- increasingly important not only in film or television but in the emerging interactive media -- continue to cluster heavily in Los Angeles, which now accounts for roughly 60 percent of Screen Actor's Guild members, and in New York, the epicenter of the live theater.

In the computer industry's early days, such artistic skills were of little importance. But the growth of "new media" -- which provides content for the Internet and computer games -- has changed all that. A recent UCLA study of California multimedia companies found that employees with technical backgrounds were outnumbered 2 to 1 by those with training in illustration, writing, editing, cinematography and musical composition. A study of New York new media firms found that roughly half of their employees had no technical expertise.

This demand for artistic and storytelling skills has led the industry to recruit from places far away from the suburban, campus and small-town environments where high-tech companies have traditionally located. Many young creatives, suggests Tom Lipscomb, president of the Manhattan-based multimedia firm Infosafe, are attracted to the art museums, ethnic restaurants, concert halls and club life that thrive in urban locales. A 1992 Louis Harris survey of migration into New York, for example, found that newcomers ranked cultural amenities as one of the city's primary attractions.

"It's really easy to get people to come {to L.A.}," says Nick Rothenberg, the 31-year-old president of W3-Design, a highly successful Web site developer that is one of many multimedia companies now operating in Culver City, a city of 40,000 abutting Los Angeles. "Part of the attraction is to be around the {entertainment} industry and all the different cultural aspects of living in Los Angeles. It's not like being stuck like a nerd working for the Fortune 1000 firm out in the sticks with a bunch of nondescript people."

Like many new media firms, few of Rothenberg's 30 employees would be classified as geeks; only one is a computer scientist. Eight are trained as anthropologists (including Rothenberg), three are musicians and one is an astrophysicist. They work in a booming new media community known as the Hayden Tract, a former red-brick industrial zone that is now crowded with movie production companies, digital-effects firms and other Internet-related businesses. Down the street are the offices of Sony Pictures. Farther west are the digital-effects hubs of Venice and Marina del Rey, each of which offers unique brands of southern California beachside bohemia.

But perhaps more than anything, cities bring to the creators of new media an opportunity to reinvent themselves, even those with strong computer skills. Josh Greer is the 28-year-old CEO of Digital Planet, a Web site developer with 40 full-time workers and 25 others on contract. Greer, a native of Toronto, says he learned how to program PCs while he was still in high school. But, he says, "By the time I was eighteen, I was burned out on computers. . . . So I joined the theater. Some geeks would rather really be artists."

Of course, none of this suggests that the era of nerdish ascendancy has ended. The computer industry still needs its technoids. Today's most rapidly expanding economic regions remain those that reflect the values and cultural preferences of the nerdish culture -- as epitomized by the technology-dominated, culturally undernourished environs of Silicon Valley. In the coming decade, we are likely to see the continued migration of traditional high-tech firms to new nerdistans in places like Orange County, Calif., north Dallas, Northern Virginia, Raleigh-Durham and around Redmond, Wash., home base for Microsoft.

David Russo, director of human resources at SAS Institute, a privately held software firm with revenues of more than $500 million in the "Research Triangle" of Raleigh-Durham, observes that such areas are far more appealing to most technically-oriented employees than larger cities with their usual high cost of living, higher crime rates and struggling schools. "It's all in the mindset of the engineers. They might grouse about not being in a big league town, but the trade-off is there's not much traffic and all the high-speed environment," Russo said from SAS's campus-like headquarters. "Engineers and software people are folks whose whole lives are based on logic and order, so this sort of place appeals to them."

Yet the rise of the urban new media means the nerds won't have the computer screen to themselves. In recent years, industry giants such as Microsoft have begun developing alliances with L.A. multimedia producers such as Cobalt Moon and Liz & S Productions, as well as inking major deals with film studios, including Paramount, Disney and Dreamworks SKG. This summer, in the ultimate Hollywood move, Microsoft co-founder Paul Allen (now off on his own) even purchased a $20-million, 120-acre estate in Beverly Hills.

These developments suggest that, although the nerds clearly still dominate the computer industry, they will increasingly look toward the creatives -- and the urban culture that nurtures them -- to supply the content for their brilliant machines. "Ultimately, this is not about locking yourself in a room with a computer and writing code," suggests Digital Planet's Greer. "People don't give a damn how much money you have or how big your CPU is. It's all about communicating, telling stories, creating images. That's our strength and that's why we'll survive." Joel Kotkin is the John M. Olin fellow at the Pepperdine Institute for Public Policy and a senior fellow in urban studies at the Pacific Research Institute. WHERE THE ACTION IS

Just a few years ago, the Hayden Tract in Culver City, Calif., was a virtual advertisement for industrial obsolescence--a kind of Silicon Valley in reverse. Spread over 57 acres of coastal plain, vacancies in the district--dotted with industrial buildings constructed largely during the aerospace boom of the 1940s and 50s--ranged upwards of 50 percent. Its work force, once close to 4,500-strong, was down to roughly 500.

Today, the tract has come back to life, with more than 30 Internet, graphic arts, small movie-production and digital-effects firms, dropping vacancy into the single digits. More than 2,000 people are employed full-time in the old industrial district. Some of the leading firms there include: Armageddon VFX/Touchstone Pictures Columbia Tristar Interactive (Sony division) Computer Film Company (special-effects house) Cyber Studios ("studio" production house for Internet content providers) Entertainment Asylum Inc. (Internet entertainment programming division of AOL) Digital Planet (entertainment-related Web sites) Digital Soup (interactive media graphic design) Jim Heimann Design (CD-ROMs and books) Kodak Digital Imaging (digital film services

division of Kodak Inc.) Mechanical Men (commercial TV and commercial/digital imaging) Media X (multimedia developer) Pittard Sullivan (digital imaging) Smashbox (digital photography studio) Sussman/Prezja (environmental design, interactive installations) W3-Design (interactive Web site agency)