chapter 11 manufacturing: regional patterns and problems introduction the importance of...
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Chapter 11 Manufacturing: Regional Patterns and Problems
• Introduction
• The Importance of Manufacturing
• Regional Patterns and Processes
• Manufacturing Regions of the U.S.
• Regional Industrial Development Problems
• U.S. Patterns of Manufacturing
• World Manufacturing Patterns
• The Globalization of Production
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The Importance of Manufacturing
• The shift to services: ? Does this mean manufacturing is no longer a key sector in regional economies?
• The rise of high-tech
• Role of R&D and High-Tech in regional growth
• Manufacturing’s rich regional linkages
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Changing Composition of Employment in the U.S.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1899
1909
1919
1929
1939
1947
1958
1967
1972
1977
1982
1987
1989
1995
2001
Other
Mfg.
Construction
Mining
Farm
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Mfg. Output in Constant $
0
2000
4000
6000
8000
10000
1990
1995
1996
1997
1998
1999
2000
2001
$ B
illi
on
So, while employment may have declined, real output continues to rise
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Aerospace
Other Technology Based Industries
-
50,000
100,000
150,000
200,000
250,000
300,000
1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000
Employment Trend - Technology Based Industries-Washington State 1974-2000
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Engineering,Commercial Research,
and Consulting Services18.4%
Software and OtherComputer Services
21.0%
Federal and UniversityResearch
3.8%
Services2.7%
Bio-Technology/Bio-Medical
Manufacturing2.8%
Chemical Productionand Petroleum Refining
2.0%
Specialized Instrumentsand Devices
2.9%
Computers andElectronics
8.3%
Aerospace32.6%
Manufacturing54.1%
Services45.9%
Total Employment:285,835
Motor Vehiclesand Machinery
5.5%
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Relationship Between Regional Growth Rates and Intensity of
R&D
GROWEMLQ
1.41.31.21.11.0.9.8.7
TO
TR
DL
Q
2.5
2.0
1.5
1.0
.5
0.0
Correlation: -.282, sig. .045
WA
Index of Employment Growth 1990-2000
Ind
ex o
f R
&D
Eff
ort
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Job Multipliers by Industry
0 1 2 3 4 5 6
Aerospace
Computers & Electronics
Motor vehicles & Machinery
Specialized Instruments
Chemicals & Petroleum
Softw are & Computer Services
Arch., Eng., R& D., Consulting
Biotech manufacturing
University & Federal Research
All High Tech
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Regional Patterns and Processes
• Regional Cycle Theory – industrial districts– Youth, maturity, and old age– Youth: experimentation & rapid growth;
market expansion, capital rushes in, competitive advantage
– Maturity: the dominance of the district, development of branch plants, movement of expertise to other regions
– Old age: cost advantages lost, new regions become cost-competitive, aging capital, eroding managerial capabilities & labor
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Regional Patterns & Processes, Cont.
• Manufacturing within the urban system– Large cities as magnets for manufacturing– Not mentioned: they are also centers of
markets for market-oriented categories of industry (milk processing, bread baking, newspaper printing, ready-mix concrete)
• Diffusion of Manufacturing– Driven by technological innovations, in market
oriented industry, in resource-oriented industry
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Manufacturing Regions of the United States
• Figure 11.1: The American Manufacturing Belt (Rustbelt)– Bos-Wash: Megalopolis anchored by New York– Montreal-Toronto-Buffalo-Rochester– Pittsburg – Cleveland – Detroit– Chicago – Gary - Milwaukee– Minneapolis – St. Louis
• Rise of the Sunbelt: Figure 11.2
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Rise of Manufacturing Outside the Rustbelt
• Fueled by:– Multinationals entering U.S. markets (e.g.
Japanese automobile manufacturers– Advent of flexible production systems– Demise of Fordist production systems in some
sectors– Development of just-in-time production
systems
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Manufaturers' Ratio of Inventories to Shipments
0
0.5
1
1.5
2
2.5
1965 1970 1975 1980 1985 1990 1995 2000
Evidence of long-term reductions in capital tied up in inventoriesdue to better logistics in the product delivery system
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The End of Fordism? The Flexibility Debate
• Are we not only entering a new long-wave, where IT is the driving force, but also a new long-wave in which the basic structure of productive relations is in massive shift?
• The Fordist paradigm - implicit in the oligoplistic model - but also linked to consumption and the regulation of society/consumption
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A new regime of accumulation?
(1) The emergence of clusters of small firms, including co-ops
(2) Flexibility related to new machines
(3) Labor’s new position
- functional flexibility (multiskilling)
- numeric flexibility
- financial flexibility
- more part-time, flex time, telecommuting
(4) Changes in market place conditions
- mass markets break down
- rise of niche (craft) markets
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Fordism Post-FordismLow technological innovation Accelerated innovationFixed product lines, long runs High variety of product, short runsMass marketing Market diversification & nichingSteep hierarchy, vertical chains of command Flat hierarchy, more lateral communicationMechanistic organization Organismic organizationVertical and horizontal integration Autonomous profit centers; networkCentral planning Systems; internal markets within firm;
outsourcingbureaucracy Professionalism, entrepreneurialismMass unions, centralized wage-bargaining Localized bargaining, core and periphery;
workforce divided; no corporatismUnified class formations, dualistic politicalsystems
Pluralistic class formations; multi-partysystems
Institutionalized class compromises Fragmented political marketsStandardized forms of welfare Consumer choice in welfarePrescribed courses in education Credit transfer, modularity, self-guided
instruction, independent studyStandardized assessment (O level) Teacher-based assessment (GCSE) or self-
assessmentClass parties, nationwide Social Movements; multi-parties; regional
diversification
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Emergence of Flexible Specialization
• Fragmentation of the Fordist firm - vertical disintegration (shedding non-central functions; outsourcing) and Market fragmentation (niche)• Adoption of new technologies, especially those dependent upon computers and telecommunications (CAD/CAM/FMS)• Labor force adjustments
– functional flexibility (multiskilling)– numeric flexibility (adjusting quantities by task)– financial flexibility (wage rate adjustment)– more part time, short-term, temporary work
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Flexible specialization & new industrial spaces
• Piore & Sabel - The Second Industrial Divide - craft-based districts in Italy, Germany, Denmark• Clusters of high tech industry - Silicon Valley; Route 128; Austin• Wooden boats in Pt. Townsend WA; Log
homes in Bitterroot Valley MT• The movie industry
Debates over aspects of the flexibility thesis
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Flexible Specialization and Regional Industrial
Agglomerations: The Case of the U.S. Motion Picture Industry
by Michael Storper & Susan Christopherson• Historically, an oligopoly of
– theaters– studio production facilities– actors/production specialists– spatially clustered in Southern California
• Vertical disintegration: 1950’s - 1970’s, with consequences in the 1980’s
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Productions by Organization Type
0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%
1960 1965 1970 1975 1980
Independent
Major
Mini-major
151 190 207 243 222 Number ofproductionsper year
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The Proliferation of Establishments
1966 1974 1981Production Companies 563 709 1473Rental Studios 13 24 67Properties 66 33 184Editing 4 31 113Lighting 2 16 23Recording/Sound 20 33 187Film Processing 43 76 55Film effects 10 27 42Market Research 3 5 24Artist representatives/talent agencies 242 359 344Total 966 1313 2512
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Establishments in the Entertainment Industry 1968-
1997
1968 1974 1981Motion pictures except TV 666 1279 1023Motion picture & tape for TV 490 978 1420Services allied to motion picture production NA 716 1077Total 1156 2973 3520
1997
8916634315259
1997 data from U.S. County Business Patterns; in the 1987revision of the SIC code motion pictures was combined intoa single industry
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The Decreasing Size Per Establishment
1969 1974 1981 1997Motion Pictures 23.2 11.2 25Television 21.2 20.8 24.1 7.4Allied Services NA 21.3 16.9 10.7
CombinedMotion Picturesand TV
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California’s domination of the industry - measured by jobs
Jobs 1968 1974 1981 1997California-pictures 15449 20329 40433 31791New York-pictures 6687 4596 8625 8169Others-pictures 3713 9753 10779 25578
California-allied services NA 9663 12205 125935New York-allied services NA 3110 3135 7897Others-allied services NA 2501 2829 41089
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Structural Trends• Retention of core activities: TV & Major
films & channels of distribution• Forced divestiture of theater chains• Development of generic specialists
subcontracting with specific producers for a given film & narrow scope; linked to major studios; many part-time workers; “project orientation,” FLEXIBILITY
• Product diversification: TV, Video, Film• Establishments clustered in California,
while filming locations have dispersed
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Manufacturing Regions of the United States, continued
• Location of Corporate Headquarters (Figure 11.4 – Borchert)
• Government Influence on Regional Manufacturing Patterns– Rise of the “Gunbelt”– Regional Development Programs to Alleviate
Poverty (ARDC; EDA– State government programs– Current fad: cluster studies