Competing in mature manufacturing

Tuesday, May 08, 2007

This is an article out of Pennsylvania which illustrates the danger of generalizing in economic development.

Despite decline of U.S. textile industry, several county businesses keep thriving

Total manufacturing employment has been declining. At the same time, manufacturing productivity has been increasing. Even in mature sectors of manufacturing, there are companies capable of producing high value added per worker.

I learned this lesson some years ago while doing and detailed analysis of the manufacturing sector in Rhode Island. During the 1950s and 1960s, the textile industry move out of New England and headed south. The companies that remained could compete in relatively high cost environment, primarily because they had developed a specialized niche with high value production.

One example I remember vividly was a lace manufacturer. Lace manufacturing machines required complex set ups and skilled operators. The company survived by combining production expertise with fast turnaround times.

posted by Ed Morrison |

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