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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 - PowerPoint PPT Presentation
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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 productsExamples - Product - LocationBoeing 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.
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
19161929 1934
1940 1950 1960 1970 1980 1990
Source: The Boeing Logbook
Source:The BoeingLogbook
Source: The Boeing Logbook
Boeing Employment
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,00019
16
1918
1920
1922
1924
1926
1928
1930
1932
1934
1936
1938
1940
1942
1944
1946
1948
1950
1952
1954
Boeing Employment FluctuationsBoeing 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
2013
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
% o
f Tot
al P
urch
ases
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
400000600000
800000
1000000
1200000
14000001600000
1800000
2000000
19
58
19
63
19
68
19
73
19
78
19
83
19
88
19
93
19
98
Aerospace
Total PugetSound Jobs
Source: Puget Sound Regional Council Step 2030 Database
Much weakerimpact of downturn
Big AerospaceDrop in Jobs
Boeing downturnvs. other tech?
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