Download North-east

Something is changing.
Spatial shift in USA employment
(Changes
in % between 1968-1978)
North-east
19,7
North-centre
East
North-west
18.8
15.4
27.4
South
Atlantic Regions
Central south-east
Central south-west
32.6
31.7
25.8
40.2
West
Internal States
Pacific Regions
39.7
57.9
34.5
The Golden Age (1940s-1970s)
By most conventional measures, the U.S. economy performed better during
the “Golden Age” than during comparable periods in U.S. history, combining
high rates of economic growth along with low rates of unemployment and
inflation.
From the late 1940s to the early 1970s, the U.S. economy grew at an average
annual rate of nearly 4%.
The annual unemployment rate only exceeded 6% twice in the 25 years
between 1949 and 1973. The annual inflation rate, too, only topped 6% twice,
and was actually under 2% for 14 of the 25 years in this period. The real
average hourly earnings of production workers increased at an average rate of
over 2% per year.
During this period, there was a strong intervention of government to stabilize
the overall economy, prevent recessions, and maintain full employment.
Government spending on consumption and investment (which excludes
transfers) was somewhat higher (generally 21-23% of GDP) from the late 1950s
to the early 1970s than it has been since. Several major business sectors,
including transportation, communications, utilities, and, most importantly,
banking and insurance, were highly regulated.
http://www.dollarsandsense.org/archives/2009/1109reuss.html
The 1970s and world economic crisis.
Consequences for USA
In the 1970s, the United States’ economy was suddenly threatened from multiple
directions: rising international competition, increasing energy prices, declining
productivity and profitability, and high inflation and unemployment.
The United States’ trade deficit increased during the 1960s, and government
deficits emerged late in the decade and persisted through the 1970s. Declining
international confidence in the dollar led to the diminution of U.S. government
gold reserves, as international holders of dollars demanded redemption of their
dollars for gold.
(The Nixon administration responded by ending the fixed-rate convertibility of the
dollar for gold.)
Inflation jump from about 3% in 1966 to nearly 6% in 1971.
In 1973-1974, the first of two major “oil shocks” increased the price of petroleum
four-fold, dramatically raising energy costs for both consumers and businesses.
Workers’ wage demands outpaced the rate of productivity growth, driving up unit
labor costs for businesses.
The annual inflation rate spiked to over 10% in 1974 and again in each of the three
years from 1979 to 1981. The annual unemployment rate topped 8% in 1975 and
would reach nearly 10% in 1982.
http://www.dollarsandsense.org/archives/2009/1109reuss.html
Sunbelt and frostbelt
In the mid-1970s, several articles in newspapers and magazines (NewYork Times,
Time, and Business Week) the "Sunbelt phenomenon“: the growth in the
economies of southern and south western states during the 1960s and early 1970s
and the economic retrenchment
in the states of the Northeast and Midwest-or Frostbelt.
The Sunbelt's share of the nation's non agricultural employment rose from less
than 23 percent in1950 to about 27 percent in 1970 to nearly 31 percent in 1980.
In absolute terms, non agricultural employment in the Sunbelt-and inVirginia in
particular-doubled between 1960 and 1980.
Similarly, the region's proportion of manufacturing employment increased from 18
percent in 1950 to over 25 percent in 1970 and to 29 percent in 1980.
From 1950 to 1970 the Sunbelt's share of the nation's population hovered around
30 percent, but by 1980 it had approached 33 percent. Net migration alone added
over 4.8 million people to the population of the Sunbelt from 1970 to 1979.
O’Rourke, Newsletter, 1981
The Frostbelt's share of the nation's non agricultural employment declined from more than 57
percent in 1950 to less than 44 percent in 1980. Manufacturing employment in the Frostbelt,
as a proportion of the national total, dropped from 68 percent in 1950 to less than 50 percent
in 1980. In addition, the number of manufacturing jobs in the Frostbelt actually declined by
more than 960,000 during the 1970s. The Frostbelt's share of the nation's population fell from
49 percent in 1950 to less than 43 percent in 1980; net migration out of the region amounted
to nearly 3.5 million from 1970 to 1979. (O’Rourke, Newsletter, 1981)
City and industry – the divorce…..
Detroit’s images.
The Packard Plant used to be the largest employer on the East Side of Detroit. Today it is Detroit’s
largest ruin (Doucet B., http://belgeo.revues.org/10835)
Detroit’s Images.
Many downtown skyscrapers built in the early part of the Twentieth Century are now vacant.
The tallest of these is the Book Tower; its last tenant left in 2009 (Doucet B., http://belgeo.revues.org/10835)
Main interpretations:
Berry (1976) and Fielding (1982 - Counterurbanization
Urban phenomenon looks quite different from the past.
According to Fielding, counterurbanization is an empirical generalization:
the negative statistical relationship between the demographic change
and the demographic size in the national urban system.
Berry B.J.L., The counterurbanization process: urban America since 1970, in Berry B.J.L. (a cura di), Urbanization and counterurbanization, B. Hills,
Sage, 1976, pp.17-30.
Fielding A.J., Counterurbanization in Western Europe, in “Progress in Planning”, n.17, 1982, pp. 5-52.
Urbanization and Counterurbanization/Fordism and Post-fordism
Paddison, Handbook of Urban Studies
Main interpretations:
The Urban city cycle (Source. Antrop M., 2004)
The phenomena in North Europe….
… and south Europe
(source: Antorp M., 2004)
US: the “manufacturing belt” (or «frost belt» «rust belt») and the «sun belt»
The shift to the new economy (post-fordism)
From the end of seventies until the end of eighties many geographers
dedicated their study to explain the dynamism of spaces that were largely
excluded by the fordist wave. The typical features of this regional
productive systems were the following:
a) Spatial concentration of firmes;
b) Strong relationship between local firms;
c) High rate of growth and innovation.
For the largest part, these productive systems were carachterized by:
a) neo-artisanal sectors, in many regions of North-america and Europe;
b) High-tech industries, e.g. Silicon Valley, Orange County, Route 128,
London-Bristol corridor;
c) Business and financial service localized in specialized spaced and in the
global-city CBD.
By the 1980s this phenomena were simply called “post-fordism”, to testify
that we knew what we did just leave but we couldn’t name the new form
of capitalism.
The Second Industrial Divide (Piore and Sabel; californian school)
Piore and Sabel (1984) introduced the idea of a historical transition that would occur in
developed countries during the 70s from the Fordist system of industrial
development to the post-Fordist system. (The idea that the historical forms of
capitalism can be divided into different 'regimes of accumulation' and 'modes of
social regulation').
The crisis of 70 years has undermined the Fordist system of regulation and production.
By studying the large companies, P & S found that those who manage to adapt to the
crisis are those that adopt systems of flexible specialization or production similar to
that craft. The same can be said about nations, where the best performing countries
(Japan and Germany) are those in which there are still the craftsman production
systems.
In this second industrial divide, flexible and skilled seems to supersede mass
production.
Briefly, their idea is that flexibility is rooted in the division of labour (between firms);
and that these two factors are linked to the agglomeration through the transaction
costs between firms.
FLEXIBLE SPECIALIZATION
In times of uncertainty, global competitiveness and the need to
adapt rapidly to changing markets lead the firms to:
vertical disintegration: out-sourcing, decentralization, inter-firm
networking
In order to:
- Reduce production costs
- Retreat from too competitive markets / segments
- Decrease firms’ size and increase specialization and differentiation
- Being prepared to the (qualitative and quantitative) changing
demand and to “technological displacement”
M. Piore e C. Sabel, The second industrial divide: possibilities for prosperity, 1984.
Out-sourcing and “diffused industrialization”
Increasing tendency towards out-sourcing and “externalizing”
those segments of the production cycle that:
- other firms may produce better (specialization) or at lower costs
- have highly competitive and unstable markets
- implies too high sunk costs (and expensive disinvestments)
In order to:
- decrease firms’ size
- increase flexibility and production adaptability
- share market risks with a plurality of (autonomous) suppliers
- increase the flexibility of labor and decrease unionization
- not having to bear the decisional, legal and social responsibility
of industrial production
Garofoli (1983), Industrializzazione diffusa in Lombardia, Franco Angeli.
Integration
Autonomy
Giant fordist
firms
Transnational
enterprises
Industrial
districts
Concentration
Transnational
production networks
Dispersion
THE PROCESS OF CLUSTERING:
Why do firms tend to concentrate in space, and why do regions tend
to specialize in a limited number of industries?
The most popular explanation in 1980s and 1990s is based on the
concept of economies of agglomeration (spatial agglomeration):
The “economies of agglomeration”: economic and non-economic
benefits that firms enjoy thanks to proximity to other firms
Italy: the “industrial triangle”, the “mezzogiorno” and the
industrial districts in the “third Italy” (Bagnasco 1977)
Spatial clusters in USA
Clusters are geographical
concentration of
interconnected companies
and institution in a particular
field.
(Porter, 1989)
(Source: Porter, in Harvard Business Review, 1998)
The main geographical explanations of post-fordism (Scott, Economic Geography: the
great half century, Cambridge Journal of Economics, 2000)
a) Becattini and the Florence school, which recover the Marshallian concept of
industrial district to explain the extraordinary growth of the neo-artisanal
production in central and north-east Italy after the 70s;
b) The LA school of Scott and Storper, with their seminal studies on agglomeration
economies; the vertical disintegration of the firms, the strong relationship between
firms, and the agglomeration economies are the main explanation keys of the new
industrial spaces in California (case studies are: by Scott, the clothing industries in LA
and the Orange County; by Storper and Christopherson, the movie industries)
c) The Groupe de Recherche Européen sur les Milieux Innovateurs (GREMI, Aydalot,
Keeble); this french regionalist tried to explain the regional growth looking at the
innovation capacities of local social and economic carachters;