lME TRANSITION TO FLEXIBILITY THE TRANSITION TO FLEXIBILITY Edited by Daniel C. Knudsen Department ofG eography & Institute for Development Strategies School ofP ublic and Environmental Affairs Indiana University at Bloomington Bloomington, Indiana 4740] ~. " Kluwer Academic Publishers BostonlLondonIDordrecht Distributors for North America: Kluwer Academic Publishers 10 1 Philip Drive Assinippi Park Norwell, Massachusetts 02061 USA Distributors for all other countries: Kluwer Academic Publishers Group Distribution Centre Post Office Box 322 3300 AH Dordrecht, THE NETHERLANDS Library of Congress Cataloging-in-Publication Data The transition to flexibility / edited by Daniel C. Knudsen. p. cm. Includes bibliographical references. ISBN-13: 978-1-4612-8619-6 e-ISBN-13: 978-1-4613-1425-7 DOl: 10.1007/978-1-4613-1425-7 1. Industrial organization. 2. Production management. 3. Market segmentation. 4. Technological innovations. 5. Organizational change. I. Knudsen, Daniel C., 1955- HD31.T676 1996 658.5--dc20 96-9476 CIP Copyright © 1996 by Kluwer Academic Publishers Softcover reprint of the hardcover 1s t edition 1996 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, mechanical, photo copying, recording, or otherwise, without the prior written permission of the publisher, Kluwer Academic Publishers, 101 Philip Drive, Assinippi Park, Norwell, Massachusetts 02061 Printed on acid-free paper. CONTENTS 1 The Current Transition in Industrial Capitalism Daniel C. Knudsen and Jeffrey S. Boggs Introduction Transitions in Industrial Capitalism: A Regulationist Approach 2 Mode of Production 2 Mode of Social Regulation 3 Regime of Accumulation 3 Geography 4 Misregulation and Crisis 5 Fordism 6 A New Method of Production? 7 In the Sequel 10 References 12 2 Technology, Competitiveness, and Flexibility: Constantly Evolving Concepts Edward 1. Malecki Introduction 15 Technology 16 Competitiveness 17 Flexibility 19 Flexibility in Production 20 Flexibility in Inter-Firm Relations 21 Flexible Labor 22 Flexible Places 23 Conclusion 26 References 26 vi Contents 3 Labor and Capitalist Accumulation in the Late Twentieth Century: What and Who is Flexible? Martin Kenney and James Curry Introduction 33 u.s. Traditional Labor Relations 35 The Japanese Production System 36 The New Knowledge Worker in America 39 The Non-Think Workers 40 The Concept of Flexible Accumulation Reconsidered 42 Endnotes 44 References 44 4 Preparing Workers and Students for the New Workplace Larry Mikulecky Basic Skills Demands ofthe New Workplace 49 Basic Skills Levels of Current Employees 54 Current School Practices and Student Abilities 56 School Practices 56 Student Abilities 57 Y ound Adult Abilities 58 Promising Developments in School and Workplace Education 59 Cooperative Learning 59 Tech Prep 60 Career Academies 61 Workplace Basic Skills Education 62 Summary 63 References 63 5 Large Firm Strategies: Spatial Patterns of Production Claire Ellen Pavlik Introduction 67 Views of National Economic Development 68 Views of Firm Evolution 71 Geographes of Production in Large Firms 77 Regional Reagglomeration 77 Two Models of International Production 79 Global Sourcing and "Hollow" Corporations 82 Conclusion 84 References 84 The Transition to Flexibility vii 6 Services and Flexible Production: Contingent But Mutually Reinforcing Systems Barney Waif Introduction 87 What Are Services? 89 Forces Driving the Growth of Services 91 Flexibility and the Externalization of Services 93 The Digital Revolution and the Changing Geography of Producer Services 97 Concluding Thoughts 105 References 106 7 Inter-Firm Collaboration and Industrial Competitiveness Brian Bosworth Introduction III Basic Changes in the World Eocnomy 112 Changes in Markets: Segmentation, Globalization, and Volatility 112 Changes in Products: From Standard-Made in Tailor-Made 113 Changes in Industrial Technology: From Automated Single Purpose to Reprogrammable Flexibility 114 Changes in the Structure of Industrial Enterprise: The Rise of Agile Enterprise 114 The Importance of Adding Value 115 The Dimensions of Modernization 116 Technology 116 Advanced Business Management Practices 118 Markets 118 Work Organization 118 Skills Enhancement 119 Finance 119 Inter-Firm Cooperation 119 Modernization and Public Policy 120 8 Government Response to Structural Change and the Implementation of More Flexible Management and Production Systems 1.W Wheeler Introduction 125 Background 126 The Policy Context 128 viii Contents Global and International Forces 129 National Forces 129 Regional and Local Forces 131 Specific Policy Challenges 132 Conclusions 134 Endnotes 135 References 135 9 Fixed Structures in Transition: The Changing Demand for Office and Industrial Infrastructure Nancey Green Leigh Introduction 137 Milwaukee: A Traditional Industrial City 139 The Schlitz Brewery 140 Allis Chalmers 141 Redevelopment Implications 142 Office Infrastructure 143 Industrial Infrastructure 145 Redevelopment Challenges 148 Fixed Structures in Transition: Summary and Prognosis 150 Endnotes 152 References 152 10 Period and Place, Capitalist Development, and the Flexible Specialization Debate Kevin R. Cox Introduction 155 Period and Place 156 Time and Space 157 The Nature of Capitalist Development in Time and Space 158 Critiquing Concepts of Period and Place 158 Place-dependence and Path-dependence 161 Place- and Path-dependence in Context 165 The Contemporary Conjuncture Concluding Comments 175 References 176 The Transition to Flexibility ix 11 The Current Transition Reconsidered Daniel C. Knudsen and Raymond L. Martin Introduction 179 Summary of the Essays Contained in the Book 179 Conclusions 183 References 184 LISTS OF TABLES AND FIGURES Tables Table 5.1 Stages of the Product Cycle 73 Table 5.2 International Distribution of Activities in NIDL 75 Table 6.1 Establishment Population and Mean Size for U.S. Producer Services 97 Table 9.1 The State of CBD and Suburban Office Markets, 1993 144 Table 9.2 New and Expanded Manufacturing Facilities, 1991-1993 146 Table 9.3 The State ofCBD and Suburban Industrial Markets, 1993 146 Figures Figure 5.1 Hub and Spoke Configuration 78 Figure 5.2 Prototypes ofInternational Production 81 Figure 5.3 The "Hollowing Out" Process 83 Figure 6.1 Value-Added per Employee in Services and Manufacturing, 1986 94 Figure 6.2 Trading Hours of Major World Financial Centers 102 Figure 6.3 Mechanics of Back Office Relocation to Ireland 015 ACKNOWLEDGEMENTS The essays in this volume originated as series of papers presented at a conference on flexible accumulation held in Bloomington, Indiana in June of 1994. The conference would not have been possible without the support of Ameritech Professor for Economic Development Charles F. Bonser. I would also like to thank Ray Martin, Betty Fiscus, and Nancy Croker for valuable support. Special thanks are due Cynthia Mahigian Moorhead for making the manuscript camera-ready. Finally, my thanks to two anonymous referees and to the staff at Kluwer Academic for suggestions and guidance in bringing this project to completion. Naturally any remaining mistakes and oversights are the responsibility of the authors.