“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. Washington
Institute of Technology here on campus)
•
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.
Developed by Heike Mayer, Ph.D. from Portland State
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
Source: The Boeing Logbook
1916
1929
1934
1940
1950
1960
1970
1980
1990
Source: The Boeing Logbook
Source:
The Boeing
Logbook
Source: The Boeing Logbook
Boeing Employment
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
1916
1918
1920
1922
1924
1926
1928
1930
1932
1934
1936
1938
1940
1942
1944
1946
1948
1950
1952
1954
Boeing Employment Fluctuations
Boeing Employment
0
20000
40000
60000
80000
100000
120000
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
Boeing’s Long
-
Run Outsourcing Trend
Regional Purchases are about 7% of total, mostly services
Source: Washington State Input
-
Output Tables
History of Boeing Purchases in
Washington State
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
1963
1967
1972
1982
1987
1997
2002
2007
% of Total Purchases
Other WA Purchases
Intra-aerospace
Boeing Employment Impact as a
Share of Total State Employment
Washington Aerospace Job Impacts
787 Production Components
787 Production System
Modified 747 to carry 787 parts
Does Boeing Spin Out New High Tech Firms?
0
20000
40000
60000
80000
100000
120000
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
0
10
20
30
40
50
60
70
80
90
Boeing Employment
High Tech Startups
Source on High
-
Tech Startups: Gary Schweikhardt
The Waning Influence of Boeing?
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
2000000
1958
1963
1968
1973
1978
1983
1988
1993
1998
Aerospace
Total Puget
Sound Jobs
Source: Puget Sound Regional Council Step 2030 Database
Much weaker
impact of
downturn
Big Aerospace
Drop in Jobs
Boeing downturn
vs. other tech?
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