Geography Reference
In-Depth Information
inevitable because the government required massive resources on the part of any
firm accepting their contracts. After 1945, research on a grand scale was
commissioned through MIT, the Massachusetts Institute of Technology, in
areas such as radar, missile guidance systems, and navigational systems in
general. While such research saw a downturn after the end of the Vietnam War in
the 1970s, minicomputers became a success story to replace military contracts,
and the industries along Route 128 employed nearly 100,000 workers in the
1970s. But the earlier source of strength in large contracts feeding large firms
proved to be a weakness in dealing with the changing markets of the 1980s.
Minicomputers were no longer the leading edge of technology, and in the late
1980s, over 50,000 jobs were lost, mostly in the big firms such as Wang, DEC/
DG and Honeywell. The competition that defeated this region was not from
Japan so much as from Silicon Valley, and the personal computer which had
become the main technological solution. By 1990, Silicon Valley boasted 3231 hi-
tech firms, as opposed to the 2168 firms of Route 128. In computing and office
equipment, the central focus, the contrast was still greater: 294 firms in Silicon
Valley compared with 120 firms around Route 128.
This is not the end of the story for the big companies such as IBM and Apple.
These have learnt, at great expense, ways to find the extra flexibility and
dynamism of the smaller firms. Apple, for example, has moved towards a multi-
local strategy, with design centres in Europe and Asia, linked in locally to
product development (prior to mass manufacture), mainline manufacturing, and
the provision of services, all through local and independent firms. The
comparison of the two regions does, however, demonstrate a fundamental feature
of the flexible manufacturing system. It is not enough to have a clustering in one
geographical region of the industry in question. There is an additional need for
the right kind of firms, with the ability to network their information, staff and
products through alliances, especially in industries subject to rapid change in the
nature of the product.
Poor country applications
Flexibility of this kind has been studied mostly in Europe, and it is uncertain to
what extent it is transferable to other parts of the world. On the other hand,
flexibility is much applauded and small firms are being particularly encouraged
by some of the national governments and international agencies in Third World
countries. A case can be made that flexible industry is most appropriate for some
of the poorer countries, on several grounds. First, the size of firms involved
means that little in the way of capital investment is needed to start up. This
favours capital-poor countries. Secondly, the technology involved is or can be of
intermediate level, and not particularly demanding for the new industrialist.
Dependency on rich countries is often because they own the latest technology,
and will not give this away to poor countries. Another feature is that the
industries involved, and the style of manufacturing, are heavily labour-intensive,
