Chapter 11 Manufacturing: Regional Patterns and Problems

1. 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

2. 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

3. Changing Composition of Employment in the U.S.

4. So, while employment may have declined, real output continues to rise

5. Employment Trend - Technology Based Industries- Washington State 1974-2000 300,000 250,000 200,000 150,000 Other Technology Based Industries 100,000 50,000 Aerospace - 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

7. Relationship Between Regional Growth Rates and Intensity of R&D WA Index of R&D Effort Correlation: -.282, sig. .045 Index of Employment Growth 1990-2000

8. Job Multipliers by Industry

9. 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

10. 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

11. 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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13. 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

14. Evidence of long-term reductions in capital tied up in inventories due to better logistics in the product delivery system

15. 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

16. 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

18. 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

19. 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

20. 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

21. Productions by Organization Type Number of productions per year 151 190 207 243 222

22. The Proliferation of Establishments

23. Establishments in the Entertainment Industry 1968-1997 1997 8916 6343 15259 1997 data from U.S. County Business Patterns; in the 1987 revision of the SIC code motion pictures was combined into a single industry

24. The Decreasing Size Per Establishment Combined Motion Pictures and TV

25. California’s domination of the industry - measured by jobs

26. 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

27. 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