Items related to Technopolis – High–Technology Industry...

Technopolis – High–Technology Industry & Regional Development in Southern California - Hardcover

Scott, Allen J.

 
9780520081895: Technopolis – High–Technology Industry & Regional Development in Southern California

Synopsis

Technopolis is a timely theoretical and empirical investigation of the world's largest high-technology industrial complex―Southern California. Allen Scott provides a new conceptual framework for understanding urban and regional growth processes based on a combination of inter-industrial, labor market, and geographical factors. He presents case studies and original data on three major industries that have become synonymous with Southern California: aircraft and parts, missiles and space equipment, and electronics. The business community will be particularly interested in Scott's diagnosis of post-Cold War economic ills and his suggestions for possible remedies.

In good times or bad, knowledge of how Southern California's high-tech industry and regional development have interacted in the past and might interact in the future will be invaluable for regional and economic planners everywhere.

"synopsis" may belong to another edition of this title.

About the Author

Allen J. Scott is Director of the Lewis Center for Regional Policy Studies and Professor of Geography at the University of California, Los Angeles. His Metropolis (California, 1988) has been called "a classic achievement of industrial and urban geography in the 1980s."

From the Back Cover

"By far the most sophisticated treatment of industrial structure and spatial organization in the Southern California manufacturing system. The analysis powerfully combines cogent historical narratives, revealing statistical profiles, and incisive empirical and theoretical discussion. . . . Long overdue given the region's obvious importance to the American and world economies."—Richard Gordon, University of California, Santa Cruz

From the Inside Flap

"By far the most sophisticated treatment of industrial structure and spatial organization in the Southern California manufacturing system. The analysis powerfully combines cogent historical narratives, revealing statistical profiles, and incisive empirical and theoretical discussion. . . . Long overdue given the region's obvious importance to the American and world economies."Richard Gordon, University of California, Santa Cruz

Excerpt. © Reprinted by permission. All rights reserved.

Technopolis: High-Technology Industry and Regional Development in Southern California

By Allen J. Scott

University of California Press

Copyright 1994 Allen J. Scott
All right reserved.

ISBN: 0520081897
Chapter 1
The Southern Californian Technopolis in Context

Introduction

Southern California is today one of the world's largest and most dynamic manufacturing regions. Over much of this century, and especially since the end of the World War II, the region has grown at an extraordinary pace, and it now comprises an enormous sprawling conurbation in which some 17 million people make their home.

Southern California began to grow in earnest at the beginning of the twentieth century as irrigated agriculture developed and as rich local petroleum resources were brought into production (Starr 1990). The motion picture industry also contributed to early expansion, and it remains today, along with a constellation of television, recording, and video production activities, one of the mainstays of the region's economy. In the interwar years, a small aircraft industry took root in Los Angeles and to a lesser extent in San Diego, and it soon came to be an important focus of employment. After World War II, the aircraft industry blossomed into a great aerospace-electronics manufacturing complex whose growth was fueled by large-scale federal defense spending over the postwar decades. By the early 1960s the complex had become the dominant element of the entire local production system. In addition, since the 1970s, the region has emerged as a major center of low-technology labor-intensive forms of manufacturing such as clothing, furniture, jewelry, and printing, just as it has also grown to be one of the major financial and commercial centers of the Pacific Rim.



This saga of regional growth and development poses innumerable puzzles to the theorist and the historian alike. On the one hand, the available conceptual frameworks of urban and regional analysis seem quite inadequate when faced with the sheer breadth, intensity, and durability of Southern California's rise to industrial preeminence. On the other hand, the narrative sorting out of the detailed empirical events that collectively define the region's trajectory over space and time is a task of daunting complexity. In particular, the circumstances surrounding the birth and subsequent expansion of the many individual industries in the region are frequently quite obscure, as are the ways in which different industries evolved in relationship to one another. I cannot hope, in this book, to achieve much more than a preliminary sketch of some approaches to these questions. Moreover, the focus of the book is on just one ensemble of industrial activities, namely, the high-technology manufacturing complex, and most of the other forms of economic production in the region will be considered only in passing. That said, the great advantage of this concentrated focus is that it allows us to pursue one or two major theoretical and substantive themes with some degree of detail.

In the present chapter, I shall briefly sketch out some of the empirical background to these themes. The chapter that follows enlarges on a few general ideas about problems of industrial organization and regional development, and on this basis I hope to be able to pinpoint a number of important aspects of industrial complex formation. These ideas have been more fully adumbrated elsewhere, and I shall therefore not attempt to argue them out at length in this book. They depend in essence on an effort to capture the logic of the production system as a dynamic complex of interconnected producers articulated with a series of local labor-market activities. This logic, I shall argue, leads under specifiable conditions to geographically agglomerated economic growth and hence to the formation of densely industrialized and urbanized regions.

In the light of this conceptual apparatus I shall in subsequent chapters lay out an extended series of empirical studies of high-technology industry in Southern California. Special attention will be paid here to the genesis and growth of the region's aerospace-electronics complex, its changing technological foundations, its structure and organization, its labor force, its extraregional connections, and its evolving geographical pattern within the region. These empirical studies are important in their own right as stories about the development of high-



Figure 1.1
The seven principal counties of Southern California. The primary built-up area
 is shaded.

technology industry in Southern California. But they are also intended to be read as attempts to operationalize a specific theoretical perspective, and the entire bookdespite its profusion of empirical references to Southern Californiais meant in the last analysis to stand (or fall) as a series of wider claims about regional development processes in general.

Southern California:
A Brief Overview of Its Geography and Population

Southern California can be roughly defined as consisting of the seven counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura. These seven counties are shown cartographically in figure 1.1. The actual built-up area of the region is also indicated in figure 1.1; it forms a virtually continuous tract of urbanized land sweeping some 230 miles in an irregular band around the Pacific coastline from Santa Barbara in the north, through the central pivot of Los Angeles, to San Diego and the Mexican border in the south.

The whole seven-county area is further subdivided into 188 different independent municipalities so that despite its continuous pattern of land uses it is marked by severe fragmentation of local government and urban-planning activities. These municipalities are connected



Figure 1.2
Southern California: Freeway system and primary place-names used in
the text. Mountainous areas are shaded.

together into a regional system by an extensive network of freeways (fig. 1.2). Over the decades, this network has induced concentrated growth at the core of the region while simultaneously facilitating an enormous shift of both population and industry to peripheral suburban areas. Southern California's growth can in significant degree be traced out as a series of ever-widening ripples of lateral urban expansion and outer-city formation.

Population trends in the seven counties are presented in table 1.1, which provides data on each individual county at ten-year intervals since 1970. In terms of total population, Los Angeles County clearly dominates the whole region, with San Diego and Orange counties trailing far behind in second and third places, respectively. The most striking feature of the data presented in table 1.1 is the enormous and steady growth of population in the region in recent decades. The second striking feature is the vigorous population surges of peripheral areas as manifested in the explosion of Riverside and San Bernardino counties in the 1970s and 1980s, and now most recently of all in the incipient expansion of the population of Santa Barbara and Ventura counties. All of this growth has been fueled by the region's extraordinary economic vitality, and by its ever-enlarging pool of jobs and economic opportunities.



 

TABLE 1.1 POPULATION IN THE SEVEN COUNTIES OF SOUTHERN CALIFORNIA, 19701990

 

Population

County

1970

1980

1990

Los Angeles

7,032,075

7,477,503

8,863,164

Orange

1,420,386

1,932,709

2,410,556

Riverside

459,074

663,166

1,170,413

San Bernardino

684,072

895,016

1,418,380

San Diego

1,357,854

1,861,846

2,498,016

Santa Barbara

263,324

298,694

369,608

Ventura

376,430

529,174

669,016

Total

11,593,215

13,658,108

17,399,153

SOURCE: U.S. Department of Commerce, Bureau of the Census, Census of Population and Housing .

The growth in population has been accompanied by a number of important changes in the racial and ethnic complexion of Southern California (see table 1.2). The African-American population of the region currently stands at close to 1.4 million, and it has increased steadily in absolute terms in recent decades. Over the 1980s, however, it actually showed a slight proportional decrease, and it now constitutes 7.7 percent of the total (as opposed to 8.6 percent in 1980). By contrast, the immigrant population has grown enormously since the 1960s, and Southern California has recently become a region of great ethnic and cultural diversity. Two main ethnic groups constitute the major part of this population. First, there is a rapidly growing Asian group consisting variously of Koreans, Vietnamese, Chinese, Japanese, Thais, Filipinos, and Cambodians. Second, there is an exceptionally large Hispanic population originating principally in Central America (Mexico, El Salvador, and Guatemala in particular), with a further admixture of people from South America and the Caribbean. Asians and Pacific Islanders (to use the official census designation) now account for 8.9 percent of the total population, and Hispanics account for 31.0 percent. Los Angeles is today the major port of entry for immigrants into the United States, a position formerly held for most of this century by New York. A large but unspecified proportion of the



 

TABLE 1.2 RACIAL AND ETHNIC CHARACTERISTICS OF THE POPULATION OF THE SEVEN COUNTIES OF SOUTHERN CALIFORNIA, 19701990

 

1970

1980

1990

African-American

897,512

1,171,343

1,399,517

Asian & Pacific Islander

n.a.

697,060

1,553,788

Hispanica

1,932,111

3,086,447

5,388,098

SOURCE: U.S. Department of Commerce, Bureau of the Census, Census of Population and Housing .

(n.a. = not available)

a The specific definition of Hispanic in the 1970 Census was "persons of Spanish language or surname"; the number of Hispanics in 1970 therefore cannot be directly compared with the numbers given for 1980 or 1990.

immigrant population consists of undocumented workers, especially in the case of Hispanics, many of whom enter the country by illegally crossing over the land boundary between Mexico and the United States.

These immigrant populations play a vital part in the economy of Southern California, and they have been absorbed on a massive scale into unskilled low-wage jobs throughout the region. They play an especially important role as a source of cheap and pliable labor in the underbelly of sweatshops that forms an integral part of the region's economy, both in low- and in high-technology manufacturing sectors. African-Americans, by contrast, have not been incorporated to the same extent into either of these sectors (Scott and Paul 1990), and this no doubt helps to account in part for the contrasts in growth between the African-American population and the Asian and Hispanic populations. Several commentators have remarked that with the huge influx of Third World immigrants into the region, social structures and labor markets have tended more and more to become dichotomized between an upper- and a lower-income group. The former group is composed of managers, professionals, scientists, engineers, and other highly qualified workers; the latter is made up to a large degree of unskilled, immigrant workers, a high proportion of whom are women. Between these two strata, there is a middle group comprising the traditional skilled and semiskilled blue-collar working class, but now so small and



shrinking with such rapidity that it is commonly referred to as the "disappearing middle" (Ong 1989; Soja 1989).

A Sketch of the Regional Economy of Southern California

Since the end of the 1960s, economic development in the United States has shifted to a significant extent away from the old Manufacturing Belt in the northeast of the country and toward the Sunbelt, where many new forms of industrialization and urbanization have made their historical appearance. Southern California is in many ways paradigmatic of this change, so the study presented here is not just an isolated investigation of a unique region, but is also in several respects representative of a wider pattern of geographic and economic transformation. Southern California is particularly important as an advanced case of postfordist flexible economic growth.

Over the decade from 1980 to 1990, total nonagricultural employment in Southern California grew by a robust 31.2 percent, as compared to 21.8 percent for the United States as a whole. From the data laid out in table 1.3, it is apparent that most of this growth was concentrated in various service and white-collar sectors. Manufacturing employment in Southern California grew by a modest 3.1 percent during the decade, but this contrasts with a decline of 6.1 percent for the entire country, and several manufacturing sectors in the region grew at a very rapid pace indeed. At the present time, the nearly 1.4 million workers in manufacturing in the region account for 18.2 percent of total nonagricultural employmenta percentage that is just slightly more than the 17.3 percent for the United States as a whole.

The aggregate manufacturing data for Southern California mask a number of important internal differences in this category of employment. We need to note first of all that at the end of the 1960s, once-thriving elements of the region's economy like car assembly, rubber tire manufacture, and steel entered a period of severe crisis. These traditional smokestack and mass-production industries in the region (as in the country as a whole) were subject to an epidemic of plant closures and job losses in the 1970s and 1980s, and they have now virtually disappeared from Southern California. By contrast, two other major industrial ensembles have held their own to a significant degree. These are represented by a group of low-technology labor-intensive craft in-



 

TABLE 1.3 EMPLOYMENT IN MAJOR NONAGRICULTURAL SECTORS IN THE SEVEN COUNTIES OF SOUTHERN CALIFORNIA AND THE UNITED STATES, 1980 AND 1990

 

Southern California

United States

 

1980 ('000)

1990 ('000)

Change (%)

1980 ('000)

1990 ('000)

Change (%)

Mining

23

15

34.8

1,020

735

27.9

Construction

245

384

56.7

4,399

5,205

18.3

Manufacturing

1,351

1,393

3.1

20,300

19,064

6.1

Transportation & public utilities

293

350

19.5

5,143

5,838

13.5

Wholesale & retail trade

1,339

1,790

33.7

20,386

26,151

28.3

Finance, insurance, & real estate

362

517

42.8

5,168

6,833

32.2

Services

1,306

2,127

62.9

17,901

28,209

57.6

Government

903

1,064

17.8

16,249

18,295

12.6

Total

5,822

7,640

31.2

90,566

110,330

21.8

SOURCES: Data for Southern California from Employment Development Department, State of California, Annual Planning Information (published for individual counties); data for United States from Department of Labor, Bureau of Labor Statistics, Employment and Earnings .

dustries on the one hand, and high-technology industries on the other. Both ensembles of industrial activity employ large numbers of workers, and both have expanded at a fast pace over the postwar decades. Let us look briefly at each.

Employment in low-technology labor-intensive craft industries in Southern California in 1988 is shown in table 1.4. This table is based on data provided by County Business Patterns , in contrast to table 1.3, which is based on data in Annual Planning Information . The two sets of data are not strictly comparable because of the different ways in which they are collected. In particular, County Business Patterns does not ensure a 100 percent enumeration of all business activity. However, County Business Patterns gives more complete sectoral breakdowns of employment than does Annual Planning Information , and is



 

TABLE 1.4 EMPLOYMENT AND NUMBER OF ESTABLISHMENTS IN LOW-TECHNOLOGY LABOR-INTENSIVE CRAFT-MANUFACTURING INDUSTRIES IN THE SEVEN COUNTIES OF SOUTHERN CALIFORNIA, 1988

 

Standard industrial category

Employment

Establishments

23

Apparel & other textile products

107,765

3,215

25

Furniture & fixtures

54,552

887

27

Printing & publishing

101,112

2,620

31

Leather & leather goods

5,644

108

391

Jewelry, silverware, & plated ware

2,950

207

394

Toys & sporting goods

8,473

148

781

Motion picture production & services

96,367

3,864

Total

376,863

11,049

SOURCE: U.S. Department of Commerce, Bureau of the Census, County Business Patterns .

thus used here (as well as in subsequent chapters) as a source of data for detailed intersectoral comparisons. Table 1.4 is based on a mix of two- and three-digit SIC categories defined in terms of the 1987 Standard Industrial Classification. Note that SIC 781 (motion picture production and services) is listed in the Standard Industrial Classification as a service, but given its mode of organization it is probably more appropriately viewed as a low-technology labor-intensive industry (cf. Storper and Christopherson 1987), and hence is included in table 1.4. The major sectors in table 1.4 are apparel, furniture, printing and publishing, and motion pictures, with leather, jewelry, and toys at a much lower level of development (but poised for major expansion). Southern California has now actually edged ahead of New York as the nation's major center of the garment industry. All of these low-technology labor-intensive sectors tend to form specialized industrial districts scattered around the central area of Los Angeles (Scott 1988a). In these districts, they are organized into networks of many interconnected producers and subcontractors, and except for the motion picture industry (much of which is dominated by craft labor unions and subject to closed-shop rules) they also employ large numbers of immigrant workers. The data on number of establishments given in



 

TABLE 1.5 EMPLOYMENT AND NUMBER OF ESTABLISHMENTS IN HIGH-TECHNOLOGY MANUFACTURING INDUSTRIES IN THE SEVEN COUNTIES OF SOUTHERN CALIFORNIA, 1988

 

Standard industrial category

Employment

Establishments

357

Computer & office equipment

33,682

340

366

Communications equipment

19,458

172

367

Electronic components & accessories

65,390

959

372

Aircraft & parts

124,938

347

376

Guided missiles, space vehicles, & parts

88,910

47

381

Search & navigation equipment

81,382

147

382

Measuring & controlling devices

27,194

523

384

Medical instruments & supplies

28,943

421

Total

468,897

2,956

SOURCE: U.S. Department of Commerce, Bureau of the Census, County Business Patterns .

table 1.4 also indicate that these low-technology labor-intensive sectors are dominated by small production units, averaging 34.1 employees each.

The high-technology manufacturing ensemble in Southern California is made up for the most part of aerospace-electronics industries together with sectors producing various kinds of instruments including medical instruments and supplies (table 1.5). There is also a flourishing biotechnology industry in the region (concentrated in San Diego), but employment data are not readily available for this sector. The high-technology ensemble, defined in table 1.5, accounts for very roughly a third of all manufacturing employment in Southern California. Indeed, Southern California is unquestionably the largest high-technology industrial region in the United States, if not the entire world. The industry is organized in the form of a stratified network of establishments consisting of (a) large systems houses (i.e., small-batch assemblers of extremely complex technology- and design-intensive artifacts such as aircraft or communication satellites), (b) medium-sized producers of components and subassemblers, and (c) many small manufacturers and subcontractors offering specialized services such as



Figure 1.3
The primary high-technology industrial districts of Southern California.

printed-circuit board fabrication, electronics assembly, plastics molding, aluminum foundry work, tool-and-die making, and so on. These establishments, like their low-technology counterparts, also tend to cluster together within specialized industrial districts (see fig. 1.3). The original high-technology industrial districts of the region date from the 1930s and are located in Burbank and the El Segundo area (both of them on the periphery of Los Angeles as it was at that time), and in San Diego. These three districts developed as the region's aircraft industry and associated parts-producing sectors grew. In the postwar decades, new and more diverse high-technology industrial districts have emerged at a series of increasingly peripheralized locations. The collective set of these districts in the region constitutes the Southern Californian technopolis, which is the main object of investigation in this book.

The robust growth of high-technology industry in Southern California since the 1950s has been largely driven forward by the copious spending of the federal Department of Defense over the entire Cold War period. Table 1.6 traces out defense prime contract awards in



 

TABLE 1.6 DEPARTMENT OF DEFENSE PRIME CONTRACT AWARDS, U.S. AND CALIFORNIA, 19701990

 

Total awards

 

Curent dollars
(millions)

Constant 1990 dollars
(millions)

California
as %
of U.S.

 

United States

California

United States

California

1970

33,570

5,824

106,747.4

18,519.4

17.3

1971

32,444

5,203

98,015.7

15,718.6

16.0

1972

36,283

6,016

103,902.0

17,227.8

16.6

1973

34,741

6,215

94,774.3

16,954.7

17.9

1974

37,760

6,917

95,485.9

17,491.4

18.3

1975

43,355

7,908

99,418.0

18,134.0

18.2

1976

44,679

8,949

94,928.5

19,013.7

20.0

1977

52,752

10,078

103,804.1

19,831.2

19.1

1978

61,174

10,517

112,504.9

19,341.8

17.2

1979

65,481

11,675

110,872.2

19,768.1

17.8

1980

76,430

13,853

118,965.3

21,562.6

18.1

1981

96,653

16,630

136,772.1

23,532.9

17.2

1982

115,280

22,578

152,054.3

29,780.4

19.6

1983

118,744

26,387

150,267.0

33,392.0

22.2

1984

124,015

28,520

151,193.1

34,770.2

23.0

1985

140,096

29,115

165,683.3

33,432.6

20.8

1986

136,026

27,738

156,683.5

31,950.4

20.4

1987

156,508

24,515

174,899.6

27,395.8

15.7

1988

151,352

23,458

164,145.1

25,440.8

15.5

1989

139,343

23,125

145,016.1

24,066.5

16.6

SOURCE: Department of Defense, Office of the Secretary, Prime Contract Awards by States .

both the United States and in California between 1970 and 1990. Unfortunately, information on prime contract awards for Southern California as such is not readily available over extended time periods, but since Southern California receives from 70 percent to 80 percent of all awards made to the state, the data for California as a whole laid out in table 1.6 can be taken to be reasonably representative of overall trends



 

TABLE 1.7 HIGH-TECHNOLOGY INDUSTRY (AEROSPACE-ELECTRONICS) IN SOUTHERN CALIFORNIA AS DEFINED BY THE EMPLOYMENT DEVELOPMENT DEPARTMENT OF THE STATE OF CALIFORNIA: DEFINITIONS IN TERMS OF 1972 AND 1987 STANDARD INDUSTRIAL CLASSIFICATIONS

 

1972

1987

SIC code

Description

SIC code

Description

357

Office & computing machines

357

Office & computing machines

365

Radio & TV receiving equipment

 

Radio & TV receiving equipment

366

Communications equipment

366

Communications equipment

367

Electronic components

367

Electronic components

372

Aircraft & parts

372

Aircraft & parts

376

Guided missiles, space vehicles, & parts

376

Guided missiles, space vehicles, & parts

 

381

Search & navigation equipment

382

Measuring & controlling devices

382

Measuring & controlling devices

in the region. For both the United States and the state, prime contract awards, in constant dollar terms, grew erratically but continually over most of the period from the 1950s to the 1980s. They reached a peak in 1987, and have declined steadily since then. In view of the prospect of a durable international dtente throughout the 1990s, this pattern of decline seems likely to persist. Moreover, while Southern California still takes a much greater share than any other state of total money expended on prime contract awards, the share, too, has tended to decline over the late 1980s from a maximum of 23.0 percent in 1984 to 16.6 percent in 1989.

If we look at aggregate annual employment in the core aerospace-electronics complex of the region (i.e., high-technology industry as defined above less medical instruments and supplies), we see that it runs more or less parallel to the course of defense spending. Here, the complex is identified (not entirely satisfactorily) in the terms established by the Employment Development Department of the state of California



Figure 1.4
Total employment in the aerospace industry of Los Angeles,
Orange, and San Diego counties. Note change of definition of
 industry after 1987. (Data from State of California, Employment
Development Department,  Annual Planning Information .)

(see table 1.7). After 1987, SIC 365 was dropped from this definition, and SIC 381 was added. Fortunately-, the discrepancies in the aggregate data series before and after 1987 are probably slight. Figure 1.4 shows absolute levels of employment in the complex from 1972 to 1990 for the three leading counties of Los Angeles, Orange, and San Diego. Over the years of the Reagan presidency, employment in the complex expanded with particular intensity, and this was a boom period for the region as a whole. Since 1987, however, in response to the declines in Department of Defense prime contract awards, significant losses of employment have been experienced. Southern California assuredly remains the world's premier high-technology manufacturing region, though it is now experiencing many difficulties, and serious questions remain as to its future course of development. We shall return to these questionsand the major policy issues that they posein the final chapter of this book.





Continues...
Excerpted from Technopolis: High-Technology Industry and Regional Development in Southern California by Allen J. Scott Copyright 1994 by Allen J. Scott. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

"About this title" may belong to another edition of this title.