Geography Reference
In-Depth Information
and this also suits countries and regions with a large labour force. Because
automation cannot be high in these industries, and constant human attention to the
product is needed, much of the cost of production is labour cost.
An example of flexible manufacturing established in a poor country comes
from Mexico (Morris & Lowder 1992). Over a third of the Mexican national
shoe industry is located at Leon, a highly diversified industry with thousands of
separate products and probably 5000 firms, including those of the informal
sector. In addition there are over 600 firms providing leather from tanneries and
components of shoes such as soles. In this industry there is a rapid turnover of
small firms, mostly with under ten employees, but with an intermediate and
large-firm sector providing further employment and more stability. Operation is
of two main kinds. Some large firms are relatively integrated, with their own
tanneries and plants for intermediate goods, and even their own retail lines. Most
firms operate as flexible specialists, with small batch output that varies from
week to week and requires considerable manual skills from its workers, who are
usually trained in more than one department. Simple machinery allows for
different ways of handling the leather. Labour is flexible in the jobs done, as
well as in the hours worked; workers exhibit considerable firm loyalty so that lay-
offs and extra time are possible. Further flexibility is endowed by a considerable
infrastructure, with a national research and training agency for the industry in the
town, and specialist chambers of commerce that seek to help in promoting and
marketing the finished goods. Flexibility is also given by the way firms operate,
combining readily for the handling of large batches, either subcontracting or
sharing an order. The advantage of the Leon type of arrangement is that it may
provide a learning environment for labour and for new entrepreneurs to build up
skills and knowhow in a selected industry. New industrial nodes can thus be
created, separately from the global MNC structuring of manufacturing industry.
It must be admitted at once that this kind of organization of production cannot be
enacted for all types of industry. Highly standardized products, and those that
require massive capital investment, are not easily moulded to flexible
specialization. This comment would apply, for example, to the petrochemicals
industry, which requires large capital investments to set up, and which produces
a highly standardized set of products over a long life-time without any change.
In the best circumstances, structural flexibilities in manufacturing are
combined with good access to the old centres of industry. This is the case for
another LDC, Brazil, as elaborated by Storper (1991). In the outer ring of towns
around São Paulo, smaller industries have sprouted up in new or expanding sectors
such as electronics, and combine labour and product flexibility with good access
to product information. Such a geographical location, on the edge of older
industry, corresponds in a way to that described for the American automobile
industry by Rubenstein (1986).
