Geography Reference
In-Depth Information
CHAPTER 3
Industries and firms
From the previous chapters is taken the idea of concentration as something that has
happened widely in the process of development, and which has a positive value
in this process, as observed in the newly industrialized and developed countries.
Other ideas are those of the appropriate and changing industrial mix, the limiting
or helping role of the state, and the varying fate of regions in the process. Such
ideas are, however, of a process viewed in general, at a macroeconomic or
national scale, without any examination of the role of individuals, firms or
industries in it. It is necessary to examine the microeconomic level, that of
individual firms, because they are the basic units of production. Some of them
are in any case very large, and their influence may be more than that of
countries; but the collective functioning of a large assembly of small firms is also
of interest and this theme will be developed in this chapter. Economic
mechanisms operate both at the firm level, and at that of groups of firms and the
institutions that link them. Some other structures are found at a second broad
level, that of whole industries, such as car-making or steel.
In what follows, models of the spatial structuring of development at the level
of products, of firms, and groups of firms or whole industries, are introduced.
None of these models has a close fit to reality in any country, but each
contributes to the analysis of changing industrial structure.
Differentiation of production between centre and periphery
One way of viewing the changes in economic organization in recent times is in
terms of a “new international division of labour”. The term comes from work by
German writers (Fröbel et al. 1980), published originally in German in 1977.
Their research started from the alarming finding, for a West Germany that had
seen constant growth since the Second World War, that some industries, notably
textiles and clothing, were in decline in Germany, and that the whole textile
industry was being effectively “exported” to Third World countries, because of
their lower labour costs, and lower labour rigidities because of less unionization.
Other industries were retained in the advanced countries, but the export of jobs
was causing problems in the heartlands of manufacturing industry. Some
