The decentralization of manufacturing industry: Recent American experience in perspective

Geofown.Voi. PrintedinGreat

14.No.Z.pp. Britain.

0(116-71X5/X3 $3.(Kl+Wi~ @ lY~3Perg~m~n Press Ltd.

133-147.1983

The Decentralization of Manufacturing Industry: Recent American Experience in Perspective

R. C. ESTALL,*

London, U. K.

Abstract:Studies of economic development in the USA in the 1970s emphasized the strong growth of manufacturing in non-metropolitan areas and stressed the break implied with historical patterns of spatial concentration. Much of this growth took place, however, either in counties adjacent to existing metropolitan areas or in counties where existing urban centres were, as a consequence, raised to metropolitan size. Thus when new job growth is assessed on the basis of current definitions of SMSAs, the share of national manufacturing employment contained in metropolitan centres has increased. There has been no marked break with the historical pattern which has chiefly been one of growth of manufacturing employment at the metropolitan periphery. Important variations of experience occur, however: at the regional level and also according to the size of metropolitan areas. A study of the kinds of industry concerned in both metropolitan and non-metropolitan growth and in differential regional growth helps to explain the processes involved. The increasing role of ‘non-production’ workers in manufacturing also becomes a key feature here.

Introduction

the major regional trends, considerable weight was attached to the apparent shift of economic activity away from metropolitan centres. Such a change of ran sharply counter to historical direction experience. Continuous metropolitan growth had been a basic feature of American development this century, embracing the cutting edges of new ‘inter-metropolitan while the development, peripheries’ tended, by and large, to lag behind. Now all this was changing. A Department of Agriculture report on ‘The Revival of Population Growth in Non-metropolitan America’ (BEALE, 1975, p. 3) noted that “the vast rural to urban migrations of people that was the common pattern of U.S. population movement . . . has been halted and, on balance, even reversed. . . . (The) appeal of major urban areas has diminished and the attractiveness of rural and small town communities has increased, economically and otherwise”. Later, in a specific reference to the subject matter of interest here, the report concludes that “the decentralis-

Major shifts in the distribution of population and economic activity have occurred in the U.S.A. in recent decades. These became more visible in the 1970s against a background of slow and faltering national economic growth. Long-established patterns of inter-regional population flows, the historic trek from farm to city and the seemingly inexorable shift in the locus of economic life to metropolitan areas were all halted or reversed. Such changes were associated with strong economic expansion of the southern and western peripheries and with an increasing weakness of the once-dominant northern core (the ‘manufacturing belt’). Understandably, major regional adjustments of these kinds excited much interest and debate, and not a little controversy and political conflict. Further, and within *Department of Geography, London School of Economics, Houghton Street, London WC2A 2AE, U.K. 133

134 ation of manufacturing has been a major feature in transforming the rural and small town economy” (Ibid. p. 9). This present study is concerned with an examination of the decentralizing experience of manufacturing industry at both the regional and the metropolitannon-metropolitan levels, but with emphasis on the metropolitan trends within the different regional contexts. The inter-regional decentralization process has roots traceable at least as far back as the Second World War, but it gathered momentum in the later 1960s and achieved its greatest strength, so far, in the ’70s. While there are different views as to the identity of the prime causes of the trends and the weight to be allocated to each of the numerous variables concerned, the facts of the flow of people, capital and economic activity from the ‘old core’ to the ‘peripheries’ (especially the southern periphery) are indisputable (SALE, 1975; STERNLIEB and HUGHES, 1975; NORTON and REES, 1979; ESTALL, 1980). The decentralisation process from metropolitan to non-metropolitan areas is, however, less well attested, especially insofar as it is suggested to reflect a fundamentai change in the location preferences of investment decision takers in manufacturing. One 1979 study of ‘nonmetropolitan industrialisation’ argues that this process “constitutes a whole new phase in the evolving economic geography of the nation. It represents a dramatic departure from the ciassic pattern of industrial concentration in or near metropolitan centres” (LONDSDALE and SEYLER, 1979, p. 3). In this study, however, it is argued that the decentralisation process, insofar as it affects the metropolitannon-metropolitan development of manufacturing, in fact represents a continuation of pre-established trends and does not constitute a sharp break with the traditional patterns of new investment.

Historical Perspective

A feature of recent discussion that calls for comment at this stage has been a tendency to imply that industrial growth in non-metropolitan areas is a new phenomenon. SUMMERS et al. (1976), in looking for reasons for the paucity of research on industrial development outside of metropolitan areas, suggest that one reason was that “the phenomenon itself is comparatively recent . . . (and) industrial development in non-metropolitan areas did not reach even modest proportions until the 1960s” (p. 11). While

GeoforumiVolume 14 Number 211983 much depends on the definition of ‘modest’, we must note here that there has always been an industrial presence in small town and rural areas of America. Typical ‘rural’ products have supported food processing, tobacco treatment, lumber and wood product and similar manufactures since early times. Other non-metropolitan manufacturing reflects, from the late nineteenth century especially, the successful search of certain small-scale industries (e.g. clothing, textiles and shoe manufacture) for lower production costs - especially low wages and non-unionised labour. Sometimes, too, quite sizeable enterprises have been established in such locations to utilize local resources. Stone, clay and fertiliser products are examples and, occasionally, even small primary metal enterprises or minerals processing plants. A detailed statistical examination of this industrial presence for the period 1899-1966 is available in two Conference Board reports (CREAMER? 1963, 1969). Here, data for manufacturing employment are broken down into seven locational types (AG), of which the ‘G’ locations (small cities, towns and rural areas) can reasonably be taken as representing today’s non-metropolitan areas. These data show that the share of all U.S. manufacturing jobs in such locations was about 27% in 1899 and. after various small fluctuations, still about 24% in the early 1960s. Clearly, manufacturing activities have long been of significance in non-metropolitan America, and the historical presence of such enterprise has sometimes provided a foundation for more recent growth. The general direction of the locational changes charted by Creamer and his conclusions thereon are worth noting as a background for the subsequent discussion. Table 1 presents data drawn from this work for the period 1929 to 1963, one of maximum comparability. The most notable long-term changes affected Creamer’s location types ‘A’ and ‘C’ - the principal cities of industrial areas (experiencing a sharp decline in their share of manufacturing employment) and their peripheries (with a sharp increase). Suburbanisation of manufacturing was, clearly, the major trend of the period, while the share of the type ‘G’ (non-metropolitan) locations fell slightly. In Creamer’s words, “the emergence of new manufacturing centres has taken the form primarily of extension of the existing centres” (Creamer, 1969, p. 35), and it is argued here that the experience of the 1970s can be explained in similar terms rather than as a departure from the

37.1 33.5 35.8 33.6 31.8 ..__ 31.5 27.9

A Principal cities (“ro)

9621 9623 14,382 15,462 15,184 __--._____ 15,402 16,206

D

G

22.8 23.7

Remainder (dispersal) (“/c) ---_-~ 25.2 7.9 26.6 8.7 22.5 10.9 22.1 11.0 22.4 9.9 ._-~-” .____

F Important industrial counties (%)

empI~yment by types of location,” 1929-1963

Source: CREAMER (1969, Appendix B, Tables Bl and B2). *Location types: (A) the principal city of an industrial area; (B) a satellite city in industrial area with 100,000 or more population; (C) remainder of industrial area; (D) city of 100,000 population or more outside of an industrial area; (E) remainder of county in which D is located; (F) important industrial county outside of an industrial area, with 10,~ employed in manufacturing, but no city as large as 100,000 population; (G) the remainder of U.S.A. tEmpIoyment total adjusted for comparability with earlier figures. SFigures compatible with 1963,

1929 1939 1947 1954 1958t -.-I_--.-19581 1963

Total employments (,OW

of manufacturing

B E Other cities c of 400,000 Satellite Peripheries Peripheries population of A and B cities of D (%) (%> t%) (%) __ _-~ ..-.. _I__^..._ 6.3 3.1 1.8 18.7 6.4 3.0 1.9 19.9 5.0 21.6 2.6 1.6 4.6 24.3 2.7 1.7 3.1 5.5 24.9 2.4 __._.__~. .-_ __.._ ..-... _____.-. .-. ~-,_--.^-~_-, 3.0 24.8 5.5 2.4 2.9 26.3 5.6 2.9

Table 7. Distribution

136

“classic tres”.

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. . in or near

metropolitan

cen-

A critical feature of this interpretation, however, lies in the treatment of the official Standard Metropolitan Statistical Area (SMSA) boundaries at the initial and terminal dates of the study period. The SMSA concept is one of an integrated economic and social unit with a large population nucleus. The criteria for definition, complex in detail, include basically a city of 50,000 or more population and the rest of the county in which it is located, plus contiguous counties which have reached certain levels of urbanisation or have strong commuting flows to the central area (C.B.P., 1980, Appendix A). Apart from the New England region (where city and township boundaries are used), SMSAs grow by the addition of whole counties, and the areas are regularly re-defined. Thus, if a large part of the investment taking place is in non-metropolitan counties on the fringes of existing metropolitan areas, or in a county of sub-metropolitan size that experiences sufficient growth, the new capacity is likely to be caught up in boundary adjustments as the true ‘integrated economic and social unit’ of the metropolitan ‘nonarea is re-defined. Arguably, such metropolitan’ growth was from the first affected in some way by the proximity of the existing urban or metropolitan centre, and the entrepreneurs in question were not, in the main, seeking to break with traditional patterns and were not truly being attracted to dispersed locations in small towns and rural areas. Thus whether or not the statistical assessment of change over a given period takes into account the realities of extending metropolitan spheres of influence becomes a critical issue. Creamer constantly adjusted his data as the characteristics of his county areas changed. Thus his list of ‘G’ counties in 1929 embraced some 25% of U.S. manufacturing employment, and these same counties contained 34% by 1963. However, when the due adjustments to area boundaries are made the picture changed remarkably, and ‘G’ counties as defined in 1963 contained only 23% of manufacturing jobs. A background concern of Creamer’s reports was the problem of economically depressed areas, which was receiving considerable attention at the time. The possible role of manufacturing in providing new employment opportunities in such areas was much discussed. Not surprisingly, by far the largest number of the distressed counties designated as eligible for aid under the 1961 Area Redevelopment Act

14 Number 211983

were type ‘G’ counties, the non-metropolitan locations. Creamer’s investigation of the growth of industrial employment in these counties shows that between 1929 and 1963 only 128 of them (out of 2885 ‘G’ counties in 1929) experienced ‘intensive industrial development’, and all of these had to be re-classified. In sum, experience showed that “Small towns, villages and open country remote from the larger urban centres have not succeeded in attracting a larger share of manufacturing employment” (CREAMER, 1969, p. 20). There were sound reasons for this and, while various studies example, U.S. and reports (see, for DEPARTMENT OF AGRICULTURE, 1967; PRESIDENT’S NATIONAL ADVISORY COMMISSION ON RURAL POVERTY, 1967) recommended increased public support for new industrial enterprise in distressed non-metropolitan areas, it was clear that with notable exceptions (embracing the types of industry traditionally found in such not areas) non-metropolitan America was considered to offer attractive conditions for competitive production. The generally accepted view in the 1960s was well expressed by HANSEN (1970, p. 232) and is worth quoting at length: “Whatever advantages rural areas may have in terms of a stable labour force that is relatively cheap and plentiful, of adequate and relatively cheap land, and of easy access to work and recreation areas, they still have a host of disadvantages to overcome. The cheap land and low tax rates may be more than offset by low levels of services. There are relatively few business contacts with other producers or auxiliary business services. Labour may be plentiful, but it may prove costly to adapt the relatively untrained labour force to the firm’s needs. The local market will probably not be significant, and frequently firms find it advantageous to locate near competitors rather than at a distance. Bad connections with long distance traffic may mean higher transport costs and more time in transit, though these problems have become less important than in the past. Rural areas also tend to be lacking in cultural and educational facilities. Finally, there is often a great deal of mistrust of industrialisation in rural areas, including the mistrust felt by local “leaders” who do not wish to alter the status quo.”

Hansen’s broad conclusion from the evidence of the 1960s was that “there is no convincing evidence that central government programmes can attract enough industry to the countryside to provide people everywhere with jobs in proximity to their place of residence, even if this were desirable on grounds of value rather than efficiency” (HANSEN, 1970, p. 238). The extent to which such widely held views have been shaken by recent developments in nonmetropolitan America is taken up below.

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Evidence

Creamer’s detailed data terminate in 1963 but, using more restricted sources, he comments briefly on shifts up to 1966. He finds the major long-term trends shown in Table 1 to have persisted but, interestingly, discovers that the “largest shift, but still modest (one percentage point) occurred in the continued rising share in the areas of dispersion, the ‘G’ counties ” (CREAMER, 1969, p. 76). This finding compares well with other studies of the 1960s experience, but it is important to bear in mind that a large part of this non-metropolitan growth might, as formerly, have been on the fringes of existing industrial centres. The extent to which truly small towns in remoter areas were attracting investment remains a vital question. A detailed compilation of data for employment change in manufacturing over the period 1962-1978 for metropolitan and nonmetropolitan areas has been presented by Haren and Hollins (LONSDALE AND SEYLER, 1979, Ch. 2). The data suggest a rapid relative growth of non-metropolitan manufacturing in the 1960s. Between 1962 and 1970 metropolitan manufacturing jobs grew by 15%, compared with a 31% increase in non-metropolitan areas. (In absolute terms, 62% of the new jobs were in the metropolitan areas.) Without pursuing the area definition question for this period, we may note that strong economic growth was a feature of the times. Manufacturing employment grew from 16.6 to 19.8 million between 1962 and 1970. i.e. by almost 20% in 8 years. It would have been remarkable if most types of location had not benefited from this experience. The 197Os, however, proved to be far less ebullient economically. Indeed, for manufacturing the decade brought considerable difficulty, and it is for the 1970-1978 period that Haren and Hollins’ data appear to demonstrate the new weakness of metropolitan centres most clearly. By their calculations, metropolitan manufacturing showed an absolute decline of 3.5% (-513,000 jobs) while nonmetropolitan areas experienced an increase of 12.1% (+619,000 jobs). Such data indicate a far superior attraction of non-metropolitan areas for such new job-creating investment as was taking place, and the share of U.S. manufacturing jobs held by metropolitan areas fell from 74 to 71%. But Haren and Hollins’ data are based on constant (1977) metropolitan area boundaries, while 53 (chiefly small) metropolitan centres were omitted altogether from their calculations (LONSDALE and SEYLER, 1979, Ch. 2, footnotes to tables).

137

While there is no doubting the recent strength of non-metropolitan growth when the areas concerned are held constant over time, a quite different perspective is gained once boundary adjustments are made. Such adjustment is the basis of the discussion that follows, while additional insights are sought from the examination of experience according to different sizes of metropolitan areas, different patterns of growth by region and the different types of industry and employment concerned. County Business Patterns data for 1969 and 1978 are used as offering a reasonable time span of available data for assessing the major trends of the 1970s. The year 1969 was a good one economically, marking the peak of manufacturing employment (20.2 million) that followed the strong surge of national growth through the 1960s. Subsequently, the economy slipped into recession but, after several fluctuating years, recovered sufficiently to raise manufacturing employment to about 20.6 million in 1978, offering a useful opportunity for comparison with the similar total for 1969.’ County Business Pattern sources also provide data in a form suitable for making adjustments according to changing metropolitan area definitions, since SMSAs are chiefly defined using whole counties as building blocks. The pattern of change as between metropolitan and non-metropolitan areas overall is indicated in Figure 1 (see also Table 2). Employment data for 1969 use the current (i.e. 1969) boundaries of SMSAs. For 1978, however, the data reflect two sets of calculations, one for metropolitan areas as they were defined in 1969 (i.e. ‘constant’ boundaries) and the other for metropolitan areas under the 1978 (i.e. ‘current’) boundaries.2 The significance of boundary changes is immediately appar-

1969 1978 A

__I

*

“sing SMSA

constant (1969) bo”ndarleS

B

IJwlg SMSA

curren, 11978) boundarIes

Figure 1. Distribution of manufacturing employment (%) 1969 and 1978. Metropolitan and non-metropolitan areas.

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ent. Using constant boundaries, manufacturing employment in metropolitan America fell by almost half a million jobs (-3.3%), while nonmetropolitan areas experienced a growth of more than 900,000 jobs (+17.3%). On such data, the non-metropolitan share of U.S. manufacturing rose from 26 to almost 30%. But, as historically, by far the larger part of non-metropolitan growth in the 1970s occurred either in counties adjacent to established metropolises, or in counties that themselves grew to metropolitan size over the period. By 1978 the boundaries of numerous SMSAs had been adjusted - and, normally, extended - to take into account new spheres of influence, while 50 new SMSAs had been created. Using current boundaries, therefore, the position is greatly changed. raised their manuMetropolitan areas, overall, facturing employment by some 750,000 (+5%), while non-metropolitan employment actually fell by some 327,000 (-6%), so that the non-metropolitan share of total U.S. manufacturing jobs fell to about 24%. Handling the data in this way suggests, therefore, that most new industrial investment in non-metropolitan areas was, in fact, near to metropolitan centres, and that truly small towns in remoter areas did not experience anything like an ‘industrial invasion’ (SUMMERS et al 1976).

Experience by Size of Area and by Region While the share of U.S. manufacturing embraced by the evolving metropolitan system is rising, important variations occur in centres of different size and in different regions of the country. Taking up first the matter of size, we note that the range of size within the U.S. metropolitan system is enormous. In 1978 the smallest SMSA, Enid, OK, had a population of only 63,000, while at the other extreme stood New York, with 9.2 million. While a concept of ‘metropolitan’ that can embrace such widely different patterns and forms of urban life may well be criticized as of limited usefulness, we must take such facts as given. What is important for our purposes is that it has been the smaller centres that have had the most powerful appeal in recent years - and in this respect, at least, it may be suggested that the traditional pattern has been reversed. The great appeal of centres at the lower end of the spectrum is illustrated in the fact that 50 new SMSAs were created between 1969 and 1978. Areas with modestsized urban centres in 1969 were pushed to metropolitan size, while numerous existing small SMSAs also showed powerful growth.

139

~~oforum/Volume 14 Number 211983 A brief examination of the position here will be based on a division of SMSAs into Large and Other (or Small) categories. This simpfe division will obviously conceal important variations across the field. Nonetheless, the broad objectives of this study are satisfied by a classification under which ‘Large Metropolitan’ areas are identified simply as the top 50 SMSAs by population at the 1970 census and ‘Small Metropolitan’ as the remainder.” fn 1970 the Large Metropolitan areas accounted for 47% of U.S. population, Smail metropolitan for 22% and Non-metropolitan for 31%. The use of the biggest 50 SMSAs to provide a Large Metropolitan category also offers a very reasonabie regional distribution of such centres, with 13 in the North East {in&ding Baltimore), 14 in the North Centrai, 12 in the South and 11 in the West.”

1969 housed a similar share of both population and manufacturing jobs (22-23%), while nonmetropolitan America, with 31% of the population, contained 26% of industrial jobs. Since 1969, however, the Large areas have declined quite sharply overall, in both absolute and relative terms. Moreover. such adjustment of boundaries as has taken place makes little difference to the position. Some ~00,000 jobs were lost between 1969 and 1978 (some 5-6% of the 3969 total). For the Small Metropolitan areas, however (and for the Nonmetropolitan, as seen above), the record depends very much on the area boundaries used. If, as is maintained here. it is the current area definitions that provide the most appropriate guide to real location preferences, it was the Small Metropolitan centres that were perceived as having most to offer. On the current area data (Figure 1. 1978 B) these centres increased their jobs by about 1.3 million (-+-290/o), and raised their share of national manufacturing employment very substantially.

Table 3 presents some details of the record of manufacturing employment in 1969 and 1978 for Large and Small Metropolitan and Non-metropolitan areas respectively using, as before, both current and constant definitions of SMSAs. The position for the U.S.A. as a whole is summarised d~agrammaticaIIy in Figure 1, showing that the historical attractions of the largest metropolitan centres remained evident in 1969. More than half of the total manufacturing employment was concentrated in these metropolises, several percentage points ahead of their share of population. The Small Metropotitan areas in

Table 3. Manufacturing

employment

by size

of area, 1969 and

Large ~ctropolitan I969

Region

-.

North East North Central South West --

--.-

1978”

.-. .-

USA (conterminous)

3858$ (61) 3658 (55) 1034 (22) 1896 (781 -. __. __ - -

10,446 (52)

(constant)

So far, however, the discussion has been concerned with developments and trends at the national level. It is important to place them in a regional context. The metropolitan-non-metropolitan balance of manufacturing activity differs considerably, while the fortunes of Large and Small Metropolitan areas also show interesting regional variations. Tables 2 and 3 present data on these matters for the four 1978 (with constant and current SMSA boundaries)

Small Metropolitan 1978t

1969

(current)

1YW

(constant)

Non-metropolitan 1978f

1969

(current)

1978”

(constant)

197w

(current)

3149 f57) 3397 (521 2156 (21) 2135 (74)

3103 (56) 3452 (531 1203 (21) 2135 (74)

1480 (23) 1535 (33) 1224 (26) 224 (9)

1324 (24) 1548 (24) 1395 (25) 319 (11)

1674 (30) 1811 (28) 1x71 (33) 409 (14)

1030 (16) 1418 (22) 24X7 (52) 314 (13)

1035 i 191 1634 (25) 3061 (SS) 42x (15)

732 (13) 131s (70) 2537 (45) 337 (12)

QX36 (48)

9892 (48)

4462 (221

4586 (22)

5766 (28)

5248 (261

6157 (303

4Q21 (241

Source: Based un County Business Patterns, 1969and 1978 *1978employment using constant 1969SMSA boundaries. t1978 employment using current (1978) boundaries. ~thousands (5%of region) Totals may not add because of rounding.

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Small Metropolitan

Large Metropolitan

Figure 2. Metropolitan

and non-metropolitan manufacturing employment, region, 1969 and 1978 (current SMSA boundaries).

‘Great Regions’, using both constant and current definitions of SMSAs, while Figure 2 portrays the changes diagrammatically, using only the current boundary data. For total manufacturing employment the 1970s saw major regional changes (Table 2). Against a national increase in manufacturing employment of about 2% between 1969 and 1978, the number of jobs fell very sharply indeed in the North East (-13.5%) and declined marginally in the North Central region. By contrast, in the South and West quite vigorous expansion occurred, above 18% in both cases. It is clear from the data in Table 2 that within this context location preferences have been changing everywhere, but whether the changes are seen as increasing the significance of nonmetropolitan or of metropolitan centres depends fundamentally upon the choice of constant or current SMSA boundary definitions. The position in the base year, 1969, is most remarkable in respect of the South, with its heavy preference for non-metropolitan locations. In the historical growth of manufacturing in both the North East and the North Central regions most investment took place in cities, promoting their increase in size, which served in turn to attract more manufacturing investment and led to a further increase in size. The flavour remains today in the continuing dominance

by

of metropolitan manufacturing in those regions. In the West, for its part, an extraordinarily heavy concentration of industry in metropolitan areas grew out of the physical character of the region, its geography of population and the types of industries concerned (on which more is said below). In the South, by contrast, an entirely different pattern evolved, so that in 1969 more than half of the region’s industrial employment was in nonmetropolitan areas. Manufacturing investment in the South historically favoured such locations, a fact that again had much to do with types of industry and the geography of labour force availability. The interpretation of recent experience offered here, however, suggests an important departure from the historical pattern. Were constant 1969 SMSA boundaries to be used, of course, the nonmetropolitan South would be shown to have experienced a further remarkable growth of manufacturing capacity (see Table 2). By 1978, on this reckonthe non-metropolitan share of southern ing, industrial employment would have risen to almost 55%. Again, however, the strong attraction of locations on the peripheries of 1969 metropolitan areas must be recognized, together with the pull of counties possessing substantial urban centres that would be quickly raised to metropolitan size. When area boundaries are adjusted they embrace most of the new jobs in southern industry, and the metropolitan share of manufacturing rises considerably (Figure

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2). Truly rural and remoter small town locations did not, in the overall analysis, do well and, even in this region with its traditional pattern of small town manufacturing, the non-metropolitan areas as currently defined gained only 50,cfOO new manufacturing jobs. Existing, expanding and new metropolitan areas gained 816,000. For the other regions detailed comment on the broad metropolitan-non-metropolitan balance will not be undertaken here. The data given in Table 2 show that the theme is much the same, if less dramatic. tJsing constant SMSA boundaries, nonmetropolitan employment expanded in every region, raising its share of jobs. But when current boundaries are used the picture changes and it is the metropolitan share that rises, even in the North East where overall job losses in manufacturing have been particularly severe. Indeed, using current boundary data the period saw an absolute decrease of manufacturing jobs in non-metropolitan locations in both the North East and North Central regions. Within the metropolitan system, however, other important regional trends are displayed when the centres concerned are divided into the Large and Small classes discussed above and current boundaries are used. The performance of Small Metropolitan areas was strong in every region with absolute and relative growth in each (Table 3 and Figure 2). For the North East the record is remarkable, with Small Metropolitan areas expanding strongly (+130/c) while massive losses were experienced in both Large Metropolitan and Nonmetropolitan locations. Also notable is the surge of growth in Small Metropolitan areas of the South. Employment in these areas grew by no less than 53% over the period, so that by 1978 one-third of all southern manufacturing was located therein. While the attractions of Non-metropolitan locations remain usually strong in the South, much recent investment has been in or close to existing Small Metropolitan areas, or in areas that since 1969 have expanded to metropolitan size. At this stage in its development it appears that new manufacturing investment in the South is often seeking the advantages of a location near an urban centre of moderate size, where existing manufacturing development is on a modest scale. A count of the number of metropolitan areas in which manufacturing employment remained at under 10,000 in 1978 reveals a remarkable regional contrast. In the North East only one out of 45 metropolitan centres fell into this class,

whereas in the South 28 out of 96 SMSAs had manufacturing employment totals below 10,000 persons.5 Yet, while such data tend to support the suggested preference for Small Metropolitan locations in the South, the record of the Large SMSAs in that region also calls for comment. Contrary to experience in the North East and North Central regions, new industrial growth in the South has not been areas. the Small Metropolitan confined to Together, the twelve Large SMSAs in the South made employment gains amounting to 168,000 (+16%) over the period. This was a much larger than occurred in southern Nonincrease metropolitan areas, and the share of southern manufacturing in Large centres remained virtually the same in 1969 and 197Kh In the West, too, employment in Large SMSAs grew, and at almost twice the rate for Non-metropolitan areas there. Generalizations about the poor potential of Large SMSAs for manufacturing also, therefore, need qualification. The one clear generalization that is possible from the data for current areas given in Table 3 is that Small Metropolitan areas everywhere have shown the greatest attraction for manufacturing investment in times of difficulty and change.

Types of Manufacturing In part, at least, the experiences outlined above will reflect the types of industries and the production processes concerned, with their evolving locational needs or preferences. The preference of different types of industry for metropolitan or nonmetropolitan locations is indicated in Figure 3, which shows the relevant shares of employment for each major industry group in 1978. By 1978 76% of all manufacturing jobs were in metropolitan areas, a slight increase on the share so located in 1969 (74%). However, eleven industry groups exceed the average, nine of them having more than 80% of their jobs in the SMSAs. From the types of industry concerned instruments manufacture, transport equipment, electrical and electronic products and so forth - it appears that metropolitan areas still support most of the advanced and sophisticated kinds of activity. These have been characterized (ESTALL, 1976, Ch. 9) as ‘A-type’ industries, tending to have a common interest in innovation and research and development activity (often substantially supported by federal government funds), while their products appeal to sophisticated and

142

Figure 3. Share of manufacturing employment in metropolitan and non-metropolitan locations; by industry group, 1978.

affluent national and international markets. They pay high wages on the shop floor and offer many opportunities for non-production employment (white collar) workers. Their location requirements are unlikely to be a matter of indifference, and their strong attachment to metropolitan centres seems reasonable in the light, for example, of their specialised input requirements and their need for close contact with other manufacturing and service enterprise. At the other end of the scale, with less than 70% of their jobs in SMSAs, are industry groups like lumber and wood products, textile mills, leather products (chiefly footwear) and apparel manufacture. These have been characterized as ‘Xtype’ industries, mainly long-established and catering to sections of market demand that have been expanding slowly. Competition from substitutes or imports is often severe and, as a group, they show low levels of research and development activity. They benefit little from the flow of federal government contracts, pay low wages on the production floor and offer relatively few white collar job opportunities. The greater affinity of such activities for non-metropolitan locations is clear from Figure 3.

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These patterns of location preference may be applied to the experiences of manufacturing decentralization, and are of clearest relevance to the developments in the South. The relative strength of X-type industries in that region is part of any explanation of the unusual historical pattern of location there. But the strong growth of southern manufacturing in recent times has not been due only to further expansion of these often nationally declining industries, but rather to impressive strength in attracting the A-type groups. The growing preference for location in. or on the fringes of, southern metropolitan areas has been accompanied by a shift in the industrial structure beyond the rather simple industries and processes (normally low-wage and labour-intensive) that characterized the region historically, toward the more ‘advanced’ industries of the kinds traditionally concentrated in metropolitan areas. If this locational characteristic of such industries is more than simply a feature of inertia and still reflects something of the special business opportunities and the cost and management advantages historically associated with larger urban centres, then the recent record of southern metropolitan expansion may be readily understood. Similarly, the continued expansion of manufacturing in the metropolitan West seems reasonable in the light of the types of industry most prominent there. The process by which modern and high technology industries have been dispersing from the ‘old core’ (the Manufacturing Belt of the North East and North Central regions) to the ‘peripheries’ has been explained by reference to the product cycle of manufacturing and the dispersal of innovative capacity from the ‘core’ (NORTON and REES, 1979). The mature phase of the product cycle. marked by long runs of standardized products in competitive market conditions, calls for low production costs especially low labour costs. Such requirements can be best met (if they can be met at all within the United States) in the South. Low wage levels for production line workers persist in that region, not only in small towns and rural areas but also in metropolitan centres, where conditions of labour supply may also be more satisfactory than in truly rural environments. Data permitting a full examination and comparison of hourly wages in given industries in given metropolitan areas are not readily available, but where they are they show a marked advantage for the South.’ This direct wage advantage is reinforced everywhere by relatively low levels of fringe benefits and is made, appar-

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ently, yet more attractive by low trade union membership. The South thus offers, generally, comparatively low production costs that favour the mature stage of an industry’s cycle, and this has been reflected in the location of relevant sections of modern industries in both the metropolitan and non-metropolitan areas of the region, but especially the former in recent times. The South is also expanding its interests in the more technologically advanced operations, however, and is building up its own capacity to invent and innovate. NORTON and REES (1979, pp. 142, 149) note that “in a reversal of the historical pattern, the periphery states now tend to specialize in the economy’s ‘rapid growth’ industries, and the core states in slow growing ones”; and again, “it is the high technology growth sectors . . that are manifesting themselves in the growing peripheral states of the American South and West”. Now these same sectors have traditionally thrived best in locations in or near metropolitan centres, often the largest such centres. It is reasonable to suppose that they will carry with them as they grow in the South their needs to be able to call upon the supporting suppliers and services, the body of skilled labour and so forth, that only an established centre of some size can provide. Hence the strong performance of large southern metropolises like Houston, Dallas-Fort Worth and Miami (and western centres like San Diego, San Jose and Anaheim-Santa AnnaGarden Grove). These offer the “agglomeration economies which form the corner stone of any industrial seed bed” (NORTON and REES, 1979, p. 150). A detailed study of this process is the subject of further research, but preliminary findings confirm that the major impulse to manufacturing growth in many large metropolitan areas in the ‘periphery’ has indeed been from the expansion of national ‘Atype’ industries. Much in evidence are the advanced ‘metal-using’ activities embraced in the machinery, electrical/electronic equipment, instruments, transport equipment and fabricated metal products group. The records for Houston, Dallas-Fort Worth, San Diego, San Jose and other centres appear quite conclusive on this point, and in all such centres the industrial structures are today heavily dominated by that ‘metal-using’ group. But the same large centres seem also to have been able to hold on to, or even expand somewhat, their employment in the more traditional ‘periphery’ low-

143 wage and labour-intensive industries. Thus these metropolises seem in recent times to have been enjoying the best of both worlds. Whether this can endure is an interesting question, but at the present time it does appear that the opportunities offered by existing and potential metropolitan areas have been part of the attraction of the ‘periphery’ regions, and of the southern rim in particular. Industrial growth therein has not been propelled chiefly by motives of escape from the northern metropolises as metropolises, but by the general economic and other advantages now perceived to exist in the periphery regions, as opposed to the northern core (ESTALL, 1980). These advantages can be seized upon while the important links with metropolitan centres can be maintained. To return to the broad metropolitan-nonmetropolitan distinctions, however, we should stress the contrast that remains between the kinds of activity found in the two types of locations. This is indicated in Figure 3, but is worth pursuing briefly in order to examine yet another theme of the decentralization process. For U.S. metropolitan areas in 1978 the five major, high-wage, ‘metalusing’ groups (machinery, electrical/electronic equipment, transport equipment, instruments and fabricated metal products) provided above 43% of all manufacturing jobs, while the low-wage, labourintensive groups (textiles, apparel, leather products, lumber and wood products) provided under 11%. In non-metropolitan America, by contrast, the low-wage, labour-intensive groups accounted for 31% of jobs and the five ‘metal-using’ groups accounted for 28%. Nonetheless, the latter share is a marked increase on previous levels, and it appears that the structure of non-metropolitan manufacturing may be changing in favour of certain more capital-intensive, high-wage activities. A recent report for the U.S. Department of Agriculture (MILLER, 1980) indicates a strong or quite strong growth in such areas of the instruments, printing and publishing, fabricated metal products and transport equipment industries. The data used in this report refer to 1969 and 1975, the former a boom and the latter a recession year, and this may have affected the findings. Moreover, it again appears that no adjustments were made to allow for the extension of metropolitan area boundaries over the period. Even so, some growth of these more advanced types of manufacturing seems certainly to have taken place in non-metropolitan areas, even while the dominance of metropolitan centres remains.

144

An explanation of this development is probably linked in some way with a changing division of labour in the manufacturing sector, especially that affecting the balance of production (shop floor) and non-production (white collar) workers. A key feature of the development of the manufacturing sector in recent decades has been the increasing role of non-production labour (ESTALL. 1976, Ch. 9). From 1954 to 1978 national employment in manufacturing increased by 4.4 million, but 2.6 million of that increase came in non-production jobs, which raised their share of total employment from 23 to 31B.s Increasingly, moreover, nonthese production jobs have been divorced from the location of the manufacturing process itself, many of them remaining in metropolitan areas (often in the Central City) while production line functions have moved to the peripheries or beyond. The very heavy concentration of white collar work in manufacturing in the metropolitan areas is illustrated from the separate data available for ‘Administrative and Auxiliary’ workers (Figure 3). This group, which expanded its employment from 1.05 million to 1.26 million over the 1969-1978 period (+20%), has more than 92% of its jobs in metropolitan areas. Where such employment is not separately identified it is unlikely that SMSAs retain such a monopoly, but these jobs, too, are often located separately from the production floor and tend to be concentrated in metropolitan areas. The apparent paradox of the growth of A-type industries in non-metropolitan locations yet their continuing concentration in SMSAs may, therefore. be explained in this way. The major part of white collar job creation in manufacturing enterprise has come in the A-type industries, and these jobs have continued to be concentrated in the SMSAs. Meanwhile some production line work, often perhaps the less technically advanced or the more mature processes of the cycle. has sought lower production costs in non-metropolitan areas. Scott’s recent work offers support for this view (SCOTT. 1982, p. 196) when he concludes that “the core areas of major metropolitan regions become more and more specialized centres of labour-intensive management while capital-intensive and control functions, branch plants disperse across the landscape of North America, and indeed, the world”. The future may well bring some erosion of the present great concentration of non-production functions of manufacturing in metropolitan areas. as communications systems become more and more sophisticated and efficient. At present, however, the enduring

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strength of metropolitan locations for ing employment is clearly linked to with the changed structure of the requirement in modern manufacturing

manufactursome degree labour force enterprise.

Conclusion On the evidence presented here it seems valid to conclude that, far from there occurring some kind of explosion of manufacturing industry in small towns and rural areas throughout the nation, the employment record suggests a continuing attraction of metropolitan areas, especially those of small size, and especially in the South and West, where even Large Metropolitan areas, overall, have done comparatively well. Non-metropolitan investment. by and large, has been taking place chiefly in counties adjacent to established SMSAs, or in counties already possessing urban centres of modest size. In both instances such investment has often become ‘metropolitan’ in classification via the expansion of SMSA boundaries or the designation of new SMSAs. The reasons for such locational preference remain essentially similar to those that in the past attracted most manufacturing investment to urban centres of reasonable size. but bearing in mind today the increasing role of non-production employment and the fact that the sphere of influence of urban centres has been considerably extended by improved transport and communications. It is not yet justifiable to cast aside the traditional stress on the economies of concentration, for such economies reach out to embrace a far wider area than before. Hansen’s very cautious view of rural industrialisation in the 1960s was quoted above, but he later made a special study of non-metropolitan counties that had. between 1960 and 1970, experienced either a ‘turn-around’ from previous decline to growth or accelerating growth rates (HANSEN, 1973). He concluded that, with some notable exceptions, such improvements in fortune were associated with industrial decentralization. the major feature of which was the extension of the urban field. To a large extent manufacturing industry remained strongly influenced by the attractions of the metropolitan areas to which these counties were often peripheral. There is no sign in this work that Hansen would have wished to modify his earlier conclusion. LAMB’S (1975) major study also draws in detail on data for 1960-1970, but was written with the experi-

Geoforu~iVoiume 14 Number 21983 ence of strong non-metropolitan growth in the early 1970s well in mind. After a thorough analysis of numerous variables influencing non-metropolitan growth, he concludes that “distance to metropolis emerges as the critical variable” (LAMB, 1975, p 186). “The evidence implies that there has been a fundamental change in the pattern of growth and decline as successively more distant areas have been drawn into the urban field, i.e. as non-metropolitan counties have been drawn into metropolitan daily urban systems”. “Beyond the daily reach of the metropolis the old generalisations still hold. Population and economic activity are centralizing into larger urban centres (where) threshold levels necessary for the adoption of new technologies and are the attraction of younger industries achieved . . .” (LAMB, 1975, pp. 185, 186). Outside of such centres, in what Lamb calls the “outerlying hinterlands’, “low wage, ‘trickle down’ industries soak up excess labour supply with minimal welfare impacts”, and the higher-order centres are islands of prosperity in a sea of stagnation. The one major exception to this pattern noted by Lamb has been the growth of retirement and recreation communities in amenity-rich areas. It is difficult to believe that such findings could not be applied, with only minor adjustments, to the experience of the 1970s overall. This is not to say, of course, that industrial growth is not taking place in non-metropolitan America, or that unusual developments are not occurring in a national process of ‘de-concentration’. One problem with this kind of investigatic)n is that the discussion must be reduced to manageable proportions by the use of very broad classes of area, like ‘metropolitan’ and ‘non-metropolitan’.’ But the range of size within the metropolitan system, even when broken down into its ‘large’ and ‘small’ components, is enormous, and most generalizations will have numerous exceptions. eon-metropolitan areas, too, embrace a bewildering variety of locational types and development experience. After all, even in 1980 when 318 SMSAs were identified (75 more than in 1970) with a total population of 169 million, they still covered no more than 16% of the land area of the United States. The balance of the land area that is ‘nonmetropolitan’ is immense in size and extraordinarily varied in its character, potential and needs. Undoubtedly, too, the range of experience in manufacturing industry investment is great, and some truly rural and small town areas would have important experiences to show that are lost in the generalizing process.

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While this study has been addressed to the distribution of employment in manufacturing, the similar, and associated, experiences in the population geography of metropolitan and non-metropolitan areas in the 1970s may, in closing, be called to mind. Through the 1970s scholarly works and ‘popular’ publications alike drew attention to the magnitude of the reversal of traditional experience. Historically slow population growth, or decline, in nonmetropolitan America had been reversed. and these areas were experiencing growth rates of almost twice those for the SMSAs (for example, FUGUITT et al,, 1979; BEALE, 1975; TZME, 1976). As we have seen for manufacturing employment, however, much of this growth was in counties adjacent to established SMSAs and this, together with growth elsewhere of existing urban centres to metropolitan status, has had much the same effect when area boundaries are adjusted. Using current boundaries, 68.6% of the population lived in metropolitan areas in 1970 and 74.8% in 1980. Overall we conclude that the development of manufacturing industry in the small towns and rural areas of non-metropolitan America was always pretty selective. Creamer’s findings for such counties over the whole of this century to the early 1960s suggest the growing attraction of the periphery of existing metropolitan centres or of those counties containing an urban centre of some (but, at least temporarily, sub-metropolitan) size. The present study reinforces this finding, while also acknowledging the importance of manufacturing in many truly small town and rural locations, and the possibility of a changing structure of activity therein. One question for the 1980s is whether this historical ‘selectivity’ will remain to favour the metropolitan or ‘nearmetropolitan’ centres, or whether dispersed (even remote ?) small towns and rural areas per se will be increasingly considered suitable for industrial investment. Perhaps the largely peripheral nature of metropolitan investment in the 1970s will prove the forerunner of a yet deeper process of decentralization in the future. One’s own inclination is to believe that the process will remain a selective one. Not all kinds of manufacturing activity, nor all kinds of employment within any given industry, are suited to rural environments, while not a11 nonmetropolitan areas are, by virtue of that fact alone, suitable for manufacturing industry. Other endowments remain essential - access to some particular resource; access to the inter-state highway system and, hence, to labour and other inputs and to markets. Also, for some time to come, and while

146

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acknowledging tory location

that the requirements for satisfacmay be met over a far wider area than

before, access non-metropolitan ingredient most,

to a metropolitan area or a larger urban centre will remain a major

of profitable

manufacturing

location

for

many,

if not

enterprises.

Notes 1. County Business Pattern employment coverage differs from that of the Bureau of Labor Statistics, but in respect of manufacturing the differences are small and the figures, year on year, are remarkably similar. In 1969, when C.B.P.manufacturing employment totalled 20.2 million, B.L.S. ‘Employment and Earnings’ sources put the total at 20.1 million. In 1978 the CBP total of 20.6 million also compares well with the 20.5 million of the ‘Employment and Earnings’ record. 2. The metropolitan data for 1969 cover 206 SMSAs as then defined in conterminous U.S.A. excluding New England. For New England, whole county areas known as County Metropolitan Areas (NECMAs) are used instead of the official SMSAs, which are based on city and township boundaries. There were 14 NECMAs in 1969, giving a total of 220 areas in all. The ‘constant 1969 boundary’ data given in the table for 1978 cover these same 220 areas. the smallest SMSA to be in3 Under this definition cluded in the Large Metropolitan ranks is Syracuse (1970 population, 636,000). In the 1970 SMSA ranking Syracuse is 51st. But the then two separate SMSAs of Dallas and Fort Worth (both in the top 50) were subsequently joined to form a single SMSA. DallasFort Worth is treated here as a single SMSA in both 1969 and 1978, and Syracuse is included to maintain the total of 50 Large areas. 4. In the North East the data for New England are for NECMAs (see Note 2.) The full list of the top 50 by region is as follows: North East: New York, Philadelphia, Boston, Pittsburgh, Baltimore, Newark. Patterson-Clifton-Passaic. ProvidenceBuffalo. Pawtucket-Warwick, Rochester, AlbanySchenectady-Troy, Hartford, Syracuse: North Cmtralc Chicago, St. Louis, Cleveland, Detroit, Minneapolis-St. Paul, Milwaukee, Cincinnatti, Kansas City, Indianapolis, Columbus, Dayton, Louisville, Toledo, Akron; South: Washington, DC, Dallas-Fort Worth, Houston, Atlanta, Miami, New Orleans, Tampa-St. Petersburg, San Antonio. Memphis. BirNorfolk-Portsmouth. Oklahoma City: mingham, West: Los Angeles, San Francisc@Oakland. SeattleEverett, Anaheim-Santa Anna-Garden Grove. San Diego, Denver-Boulder. San Bernadino-RiversideOntario, San Jose, Portland, Phoenix, Sacramento. 5. For the North Central region the number was 13 out of 80 SMSAs, and for the West 11 out of 41. 6. Among the 12 Large SMSAs in the South only New Orleans and Birmingham actually lost manufacturing jobs in the period. and Earnings data from the 7. For example, Employment Bureau of Labor Statistics for 1978 show that the

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average hourly earnings for production workers in the electrical and electronic equipment industry nationally were $5.82, and in the apparel and related products industry $3.94. In southern metropolitan areas for which data were also available the hourly earnings for the two industry groups respectively were as follows: Asheville, NC, $4.72, $3.52; Raleigh-Durham, NC, $4.81, $3.38; Columbia, SC, n.a., $3.28; Dallas-Fort Worth, TX, $5.65, $3.49; Little Rock, AK, $5.69, n.a., Tampa-St. Petersburg, FL, $5.48. n.a. (n.a. = not available). 8 Such national proportions conceal the situation in individual instances. Ginsburg (Scientific American, September 1982, p. 44) reports that the giant General Electric Company has no more then 40% of its work force directly engaged in production, while 60% work in “What can best be described as in-house producer services from accounting to marketing”. 9 Another problem is created by the technique of defining SMSAs by whole county areas (except in New England). This is statistically very helpful, making the gathering of data relatively easy, but counties vary greatly in size and some, especially in the west. are very large indeed. Thus the intensive development of a small area of such a county may lift it to metropolitan status either in its own right or as part of a neighbouring SMSA. Much of the county may still be quite remote from metropolitan influence, yet such economic functions as are performed in such remote parts will be counted as ‘metropolitan’. It is unlikely, however, that such considerations would undermine the general findings of this study.

References

BEALE. C. L. (1975) The Revival of Growth in Nonmetropolitan America. US Dept. of Agriculture. Economic Research Service No. 605. Washington. C.B.P. (COUNTY BUSINESS PATTERNS 1978) (1980) Standard Metropolitun Statistical Areas. C.B.P. 78-53, U.S. Dept. of Commerce, Washington. CREAMER, D. (1963) Changing Location of Manufacturing Employment. Changes, by Type of Location. 1947-1961. National Industrial Conference Board, New York. CREAMER, D. (1969) Manufacturing Employment by Type of Location; an Examination of Recent Trends. National Industrial Conference Board, New York. ESTALL, R. C. (1976) A Modern Ceogruphy of the United States. Pelican Books. ESTALL, R. C. (1980) The changing balance of the Northern and Southern regions of the United States. J. Am. Studies, 14, 365-368. FUGUITT. G. V., VOSS. P. R. and DOHERTY, J. C. (1979) Growth und Change in Rural America. Urban Land Institute, Washington. HANSEN. N. M. (1970) Rural Poverty and the Urban Crisis: a Strategy for Regional Development. Indiana University Press, Bloomington. IN. HANSEN, N. M. (1973) The Future of Nonmetropolitan America. Lexington, MA.

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R. (1975) Metropolitan Impacts on Rural Amerof Chicago, Department of Geography, Research Paper 162. LONSDALE, R. E. and SEYLER, H. L. (Eds) (1979) Nonmetropokn Industrialisation. Wiley, New York, MILLER, J. P. (1980) Nonmetro Job Growth and Locational Change in Manufacturing Firms. U.S. Department of Agriculture, Rural Development Research Report No. 24. NORTON, R. D. and REES. J. (1979) The product cycle and the spatial decentralization of american manufacturing, RegioNal Studies, 13, 141-151. PRESIDENT’S NATIONAL ADVISORY COMMISSION ON RURAL POVERTY, REPORT (1967) The People Left Behind. Washington. LAMB,

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K. (1975) Power Shift. The Rise of the Southern Rim and its Challenge to the Eastern Establishment.

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Random House, New York. SCOTT, A. J. (1982), Production system dynamics and metropolitan development, Ann. Assoc. Am. Geographer&s,72, 185-200. STERNLIEB. G. and HUGHES, J. W. (Eds.) (1975)

Post-industrial America: Metropolitan De&e and inter-~e~~o~al Job Shifts. Center for Urban Policy Research, SUMMERS,

New Brunswick, NJ. G. F., EVANS, S. D. cr al. (1976) Zndustriai Invasion of Nonmetropolitan America. Praeger. TIME (1976) Americans on the move. 15th March. U.S. DEPARTMENT OF AGRICULTURE (1967)

Communities of Tomorrow.