Geography Reference
In-Depth Information
success of the American firms led to much imitation on the part of Britain,
as well as the other rapidly industrializing economies in Europe and else-
where (e.g., Japan). The three American firm innovations of standardized
production, managerial hierarchy and flow-line principles, which eventu-
ally culminated in mass production techniques, were widely copied. These
technological and organizational developments were also reflected in
terms of the global rise of British, US and other large European manu-
facturing firms, most of which for the first time began expanding outside
of their own national and colonial systems during the first three decades
of the twentieth century (Dunning 1988c; Jones 2005), thereby emerg-
ing as genuinely global corporations and becoming truly multinational
enterprises.
As we have seen above, British imitation of American industrial inno-
vations had started from a small scale in the mid-nineteenth century, and
increased during the following decades, resulting in a bilateral process
of technology transfer. By the inter-war years of the twentieth century,
however, the emergence of the United States as the world's technological
leader implied that the flow of technology transfer had reversed and had
become largely unidirectional. British industry's imitation of US innova-
tions also took place via two distinct means. The first was the copying
by British firms wherever possible of the characteristic features of the
American model of industrial organization, as had been the case for small
arms manufacturing in the previous century. The second and more direct
method of technology transfer was the introduction of American indus-
trial characteristics into Britain by the immigrant US firms, which adopted
a variety of FDI strategies, from mergers and acquisitions to direct
greenfield investments. The relative importance of greenfield FDI as the
primary mode of US-UK technology transfer increased enormously with
the huge expansion of US-owned subsidiaries into the United Kingdom
during the inter-war years. This expansion was initially spearheaded by
the US automobile firms, but was also closely followed by US consumer
goods producers in many manufacturing, food processing, and phar-
maceuticals sectors (Dunning 1988c). As well as linguistic, cultural and
institutional ties, the laissez-faire attitude of the UK government towards
investment and labour relations was a key attraction of Britain as a base
for US investment in Europe, as many American firms sought to establish
facilities in Britain as a first step in becoming genuinely multinational in
nature (Dunning 1988c). The scale and technological superiority of US
inward manufacturing investment in the UK, which slowly extended to
other countries of Western Europe, meant that the developments in inter-
national business and multinational operations up until the Second World
War were largely associated with US manufacturing industries.
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