What it Means to Take Japan Seriously
[This paper is an interim report from a field study. It concerns the structure of industry in the former textile town of Blackburn; how, why and in what manner are textiles going downhill? What is going uphill, and why? The focus of the research is on one particular kind of adjustment problem - that arising from the dynamics of trade between the NICs (and subsequent generations of NICs), and older industrial countries (hereafter OICs). The assumptions, positive and normative on which the investigation is based are as follows:] 1. The OICs have one set of (manufacturing) industries (A) which are losing domestic markets to imports because the NICs’ potential comparative advantage from lower wage rates is being increasingly realized as they learn by doing (and by studying). These are industries well advanced in the product cycle where learning by doing and studying is easier. They also have (B) another ‘Schumpeterian’ set (mostly manufacturing, some services) at an earlier stage of the product cycle in which they retain comparative advantage, and in which productivity growth is more rapid, and hence they have most to gain in terms of growth in per capita income. Finally, they also have (C) an intermediate range of industries not clearly in either category, including, of course, poodle clipping and discos and retailing and emergency wards which provide non-internationally-traded goods and services. It is assumed that the sort of dynamic change which would take place in the OICs in the absence of any market distortions except trade-union...
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