Edited by Jean L. Pyle and Robert Forrant
Chapter 12: ‘Grow Your Own’ in the New Economy? Skill-formation Challenges in the New England Optical Networking Industry
1 William Lazonick, Michael Fiddy and Steven Quimby I. THE NORTHEAST MASSACHUSETTS REGIONAL ECONOMY For an industrial regional economy engaged in global competition, the growth, distribution and stability of income are dependent on changes in technology and markets that typically occur far beyond the region’s boundaries. When major changes occur, structures of business organization and systems of skill formation that have served the region well may no longer generate competitive outcomes. For a region, the problems of economic change may be exacerbated when the strategic decisions concerning the new forms of business organization and skill formation that will be put in place are made, as is typically the case in a globalized economy, in corporate oﬃces that are also located outside the region. Under these circumstances, those who are concerned with stable and equitable regional economic growth require a sound understanding of the processes of change that lie beyond those that are subject to the region’s control (see Lazonick, 1993). This chapter provides a case study of such a process of change as it has occurred over the past four years in the optical networking industry of the Merrimack Valley region of northeastern Massachusetts – a region that is part of the Massachusetts high-technology industrial district, known generally as ‘Route 128.’ In the early 1990s Route 128 was in a sorry state (Saxenian, 1994). First the minicomputer industry, dominated by companies such as Wang, Digital Equipment Corporation and Data General, went into precipitous decline. Then drastic cuts in defense spending...
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