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“Footloose” or Hi-Tech Industry. Returning to Manufacturing Industry Orientation: (1) resource - tr. costs - product < inputs (2) market - tr. Costs - product > inputs (3) “footloose” - two situations: (a) transport costs are a small share of value
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“Footloose” or Hi-Tech Industry Returning to Manufacturing Industry Orientation: (1) resource - tr. costs - product < inputs (2) market - tr. Costs - product > inputs (3) “footloose” - two situations: (a) transport costs are a small share of value (b) they are balanced in product & inputs Footloose at startup vs. later in firm life-cycle High-tech as footloose industry Alternative definitions of high-tech (coming)
“Industry” as a set of equivalent products versus similar products Examples - Product - Location Boeing aerospace Seattle area PACCAR trucks Seattle area Intermec bar-code equipment Mt. Terrace Fluke Corp. measuring instr. Everett Quinton Instru. Medical eq. Seattle Micron chips/computers Boise Physio Control medical electronics Redmond Tektronix electronic eq. Portland area Microsoft diversified CS Redmond Columbia Machine concrete block eq. Vancouver
Attributes Product Diversity Most are small firms Many are indigenous, but in Oregon there is a significant FDI presence Role of incubators - existing firms & formal institutions (e.g. Fluke Hall on campus- UW Center for Commercialization’s New Ventures Facility & Washington Nanofabrication Facility) Locational determinants - founders & employee preferences University linkages
Rapidly Changing Product Cycles Frequently rapid changes in product and process technology One result - mergers, acquisitions, deaths, and new startups Quintessential examples - Microsoft Office Suite, WWW strategy, Alliances Boeing Airline models, acquisitions & divestitures over time. A tendency towards continuous “reinvention” of enterprises.
Boeing : An Atypical Case Study • Early History • Product Innovation in the 1920’s and 1930’s • Catapulting the corporation in WW-II • Jet-liner technology: waves of development • Cycles in demand and structural shifts in procurement patterns, and in manufacturing technology • Role of Boeing in the regional economy
1916 1950 1970 1940 1960 1980 1990 1929 1934 Source: The Boeing Logbook
Source: The Boeing Logbook
Boeing’s Long-Run Outsourcing Trend Regional Purchases are about 7% of total, mostly services Source: Washington State Input-Output Tables
Boeing Employment Impact as a Share of Total State Employment
Does Boeing Spin Out New High Tech Firms? Source on High - Tech Startups: Gary Schweikhardt
The Waning Influence of Boeing? Boeing downturn vs. other tech? Much weaker impact of downturn Big Aerospace Drop in Jobs Source: Puget Sound Regional Council Step 2030 Database