Knowledge that Transforms

During the 1980's, the plastic-processing industry in developed countries has had to shift to knowledge-intensive production in order to remain competitive. To accomplish this, the industry was forced to reorganize in order to ensure the existence of a technological infrastructure that would permit such production to take place. In this paper a comparative study was made of this shift in New York State (U.S.), England and Israel. The main findings are: (1) most processors are small firms that cannot provide all technological services, such as research and marketing, in-house; consequently, they depend on external services. (2) The formation of adequete services may be inhibited by failure of market forces, compelling firms to cooperate to assure their development. (3) Cooperation is feasible only if firms understand that, in the new production approach, industrial activity takes place in a network composed of processors, research and development centers, materials suppliers, trade companies, and end-users. (4) In New York State, such awareness developed during the 1980s and contributed to the expansion of technological infrastructure and the upgrading of firms. (5) In England, technological services developed partly with government assistance, but most processors, lacking awareness of the developments, made few restructuring efforts. The only exceptions were those serving sophisticated end-users, such as the defense and automative industries. (6) Israeli industry failed to create adequate services until 1991. However, many kibbutz factories, with their highly educated labor force, successfully developed their own services, even though this often caused wasteful redundancy of efforts. The principal conclusion is that policies meant to stimulate restructurng should focus above all on creating awareness of developments in the industry and ensuring an educated labor force. Moreover, inter-firm cooperation should be stimulated to ensure development of technological services and industrial networking.

Institutions performing research often collaborate with each other, and firms are no exception. In recent years

This article considers the evaluation of Manufacturing Technology Centers (MTCs) and the possibilities for a new experimental federalism in public administration in the light of the emergence of collaborative learning among firms. Economic volatility is leading to decentralized decision-making authority within and among firms which entails a new understanding of performance measurement and economic coordination. The decentralization of decisions compels that goals and achievement indicators be continuously revised to reflect learning through local autonomy. To achieve this end firms adopt disciplines requiring continuous exchange of information about organizational improvements. MTCs are already encouraging firms to do just this; hence assessment of the MTCs should provide a public setting for the centers to learn why they are good or bad at helping firms monitor themselves. National comparisons are proposed of similar projects at different centers and of different combinations of services provided by centers and their respective regional partners. This makes improvement of the ‘parts’ of the system (the discrete classes of service) independent of improvement of the ‘whole’ (the architecture of the centers as development agencies). The conclusion examines the resulting form of experimental federalism as the analog in governmental organization to collaborative production in firms.

Typical descriptions of Japanese supplier management portray first-tier suppliers as partners in product development from the early concept stages of design, whereas US first-tier suppliers are provided detailed specifications and blueprints and build to print. This paper examines US/Japan differences in supplier involvement in design based on a 1993 survey of 143 Japanese and 189 US automotive component suppliers. The focus is on the relationships between Japanese component suppliers and their largest Japanese customers and between US component suppliers and their largest US customers. The data indicate US companies have levels of supplier involvement in product development rivaling Japanese companies. In both countries there is a high level of supplier involvement in product development from the early stages of design, particularly among suppliers of major subsystems. This high level of involvement in the design of competitively significant subsystems poses a challenge to the predictions of traditional transaction cost economics. Nor do theories that explain Japanese supplier involvement based on high levels of ‘trust’ provide adequate explanation. Rather, Japanese customers seem to rely on other forms of control — target prices, performance monitoring, competition, and mutual dependence to control suppliers entrusted with the design of complex subsystems. There is evidence that despite the early involvement of suppliers by US companies, they are still weak on some of the underlying business infrastructure and technical processes that contribute to the Japanese automakers' success.

The interface between industry and the universities is of key importance in the promotion of technological change in many industries. There is intense interest in the characteristics of universities that have contributed most importantly to industrial innovation in various fields, but unfortunately very little systematic study has been devoted to this important and complex topic. Also, we know little about the factors determining which universities firms will support to do R&D of various types. Based on data obtained from a carefully selected sample of major US firms in the electronic, information processing, chemical, petroleum, pharmaceutical, instruments, and metal industries, this paper sheds new light on these topics.