Linz, a sleepy provincial Austrian town? Cuckoo clocks and the sound of music? Where Hitler went to school with Wittgenstein ? Never mind the cobblestones. As the venue for Ars Electronica , one of the biggest digital arts festivals in the world, Linz is heaven for geeks right now, is overclocking with tech-driven spectacle.

Back in the 20th Century, when Vienna marked the cutting edge of things, Austrian sophisticates cracked that Linz rhymed with province. Say “province” in an Austrian accent and it ends in “z”. Just like Linz. Geddit? Dear pretty, provincial Linz. No bright lights, no big city: what Linz offered was small-town zzzz.

Wander over to Linz’s main square, the Hauptplatz, a virtual chocolate-box cover, one of the largest squares in central Europe, elegantly lined with pastel coloured Renaissance buildings.

Fast forward past the plaques commemorating visits by Mozart, Beethoven and Schubert, past the imposing column, past the friendly, back-slapping locals lapping up beer and torte, the trams trundling by, the cobblestoned backstreets winding off towards pubs and cafés in sleepy squares, towards the nearby Danube. The same as it ever was: Linz, a typically Austrian town with a big heart?

Keep that fast-forward button pressed right down. Not only is it about to become the EU’s European Capital of Culture 2009, but every September, beamed up to the holodeck, fragged into a billion pixels, Linz takes a turn for a tech vision of the future.

Knocking away the town’s provincial facade to reveal the wiring underneath, firing enough white light to leave the snootiest Viennese in a whirl, Ars Electronica spills out of Linz’s art mile, the stretch of award-winning galleries and museums down by the river, and deposits culture hackers, media theorists, digital nomads from all over the world, all over the place.

Linz, provincial? Actually, until next Monday at least, Ars Electronica turns Linz into an out-of-this-world tech party – perfect for lab rats, gadget freaks and policy wonks needing to know what’s next.

Jolted into life by academics and avant-garde musicians, Ars Electronica’s goal since 1979 and the first festival has been the “development of tomorrow”.

Above computer generated anime and flashing, twirling, bleeding-edge, bleeding eye art installations, the thump of industrial techno, Ars Electronica’s geek elites delight in tech chatter – convergence, sousveillance, locative, Web 2.0: the latest buzzwords bounce around its programme of debates.

Each year, the festival tackles a different theme. In 2007, it was privacy. This year’s theme is intellectual property: what happens to a culture in which culture can be reduced to ones and zeroes and so copied and shared in just a couple of clicks to the power of – how many friends do you have in your Facebook profile?

According to Joi Ito, venture capitalist, CEO of Creative Commons and the curator of Ars Electronica 2008’s symposium, A New Cultural Economy, the Internet has lowered the cost of communication to such an extent that the legal system governing the business of creativity is being "pushed to its limits". It can’t keep up with a new gift economy based on sharing. Change on an unprecedented scale follows from this. Economics, business, organisations, politics: all require a major upgrade.

Harvard Law School professor Yochai Benkler kicks off the symposium on Friday with Beyond the Firm, a panel discussion examining what he describes as a new mode of production, "commons-based peer production". Leaving aside the corporations, the "people formerly known as the audience ", as Jay Rosen puts it, are increasingly coming together in non-profit groups to organise their immaterial labour: that’s you, me and Auntie Edna scratching our heads and setting up collaborative blogs, editing Wikipedia, adding public domain texts to Project Gutenberg.

Humboldt University of Berlin professor Thomas Macho leads a discussion later on Friday, Beyond Mass Media, on the tensions between this new participatory media and traditional business. At what point does a "fan" become a "pirate"?

Duke University professor and chair of Creative Commons James Boyle leads a discussion on Saturday, Beyond Professionals, on the demise of the expert and the rise of the amateur.

Joi Ito leads a discussion later on Saturday, Beyond Government, on the evolution of "subjects" into a semi-conscious public sphere capable of challenging the establishment.

Beyond highfalutin? Top-down? Elitist? Ars Electronica’s art practice makes perfect sense, sort of, out of the panellists’ talk. Escaping out of its computer screens, its art installations and events punch pretty abstract ideas into Linz’s pretty reality.

By seeing the effect their work has on ordinary visitors, tech artists and academics can get a better appreciation of how culture and technology fit together, says Ars Electronica’s Christopher Ruckerbauer. It’s applied research.

"We get the technologists out of their ivory towers into a new space. We turn the whole town into a giant stage. And we let them run riot there.”

Last year, a Linz square was filled with sand and turned into a copy of Sydney’s Bondi Beach. A copy of this square from within the online virtual world Second Life was projected onto giant screens. Lazing in virtual deckchairs, Second Life’s 3d figures, operated by users hunched over keyboards, perhaps thousands of miles away, in Sydney even, chatted with their "meatspace" neighbours.

A plane over the town snapped high-resolution photos of art designed by locals to be seen from the air, 4,424 of them – a portrait of a man by the side of a Linz house, hello mums mown across backyard lawns, roof-top smilies.

The Graffiti Research Lab projected huge luminous messages onto buildings. It threw magnetised LEDs at passing Hauptplatz trams and their startled passengers. Its neon declaration: "reclaim public space".

What’s created here is a third space, says Ruckerbauer: “The idea is to get to the point where art meets technology meets society.”

This year’s highlights include spectral shapes shot onto clouds by the Paris-based art and design partnership HeHe. Trained at the UK’s Royal College of Art, Helen Evans and Heiko Hansen use advanced laser technology to turn the town into a giant art factory.

The Reactable team from the Universitat Pompeu Fabrade in Barcelona, Spain, rock out on a "tangible" music table. It continually monitors the movement of objects on its surface and turns these into complex sound loops. Icelandic diva Björk played one on her last world tour.

German artist Julius von Bismarck’s Image Fulgurator is a camera in reverse. It projects images onto buildings just as unsuspecting tourists snap their photos. Later, checking their holiday pics, they see a subversive image or message and perhaps realise that photographic “reality” isn’t reliable; your camera can lie.

It’s culture, Jim, not always as we know it, but worth pursuing for what it says about technology and its relationship to society and business. Certainly, it punctures Vienna’s wordplay. Linz, provincial? Far from it.

– Listen to the symposium discussions as well as other festival debates via these Ars Electronica 2008 MP3 downloads .

Photo Credits: rubra, Ars Electronica Futurelab, Graffiti Research Lab.

A version of this appeared in the August 2008 Ryanair Magazine.