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Technology Life Cycles and Economic Development: Implications for New England and Ireland

Technology Life Cycles and Economic Development: Implications for New England and Ireland. Patricia M. Flynn, Dean (PFlynn@Bentley.edu) McCallum Graduate School of Business Bentley College, Waltham, MA, USA Smurfit Graduate School/UCD, Dublin May 23, 2002. Overview.

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Technology Life Cycles and Economic Development: Implications for New England and Ireland

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  1. Technology Life Cycles and Economic Development: Implications for New England and Ireland Patricia M. Flynn, Dean (PFlynn@Bentley.edu) McCallum Graduate School of Business Bentley College, Waltham, MA, USA Smurfit Graduate School/UCD, Dublin May 23, 2002

  2. Overview • Technology Life Cycles (TLCs) and Economic Development • Implications for New England • Implications for Ireland

  3. A. TLCs and Economic Development Strategies I. Recruitment of Firms II. “Create Your Own,” High-Tech Job Creation III. Business Revitalization

  4. I. Recruitment of Firms • Strategies: • Tax & Financial Incentives • Custom-designed Workforces • Elaborate & Expensive Recruitment Packages • Scope: Regional, National, International

  5. “Successful” Recruitment Proposals • 1980s & 1990s (U.S.) • Nissan/TN • GM-Saturn/TN • Toyota/KY • Mazda/MI • Mitsubishi-Chrysler/IL • BMW/SC • Mercedes-Benz/AL

  6. Recruitment Strategies • Results Differ by Stage of Development • Branch plants • Assembly plants • R&D sites • Headquarters

  7. Recruitment Strategies: Conclusions • A relatively small number of regions are likely to succeed in “recruiting” a significant number of good jobs into the area. • The bulk of jobs that respond to cost-based incentives have been relatively standardized, requiring relatively low-skilled workers.

  8. II. High-Tech Job Development • “High-tech” – Is a stage of development within industries, not a list of industries • Success Factors • R&D • Scientific & Technical Workforce • Venture Capital • Entrepreneurial Network • Established Base of High-Tech Employment

  9. High-Tech Development: Conclusion Relatively few regions will be successful with high-tech job creation strategies, and even those will find that high-tech jobs will represent a relatively small share of employment.

  10. III. Business Revitalization • Niches/Specialization • Integration of New Technologies • Reorganization

  11. Business Revitalization: Conclusions • The FAILURE to remain technologically competitive contributes more to worker displacement and job loss than does the adoption of new technologies. • Revitalization strategies for established businesses hold significant potential for long-term economic development for most regions. • Revitalization policies do not win elections!

  12. B. Implications for New England

  13. Historical Competitive Advantage of New England • Innovation & “high-tech” development • Key factors • University R&D • Federal research funding • Venture capital • Well-education, highly skilled workforce • Established base of high-tech employment

  14. The “New Economy” • Transformation of business practice in every sector of the economy • Globalization of industries and firms • Innovation and speed are the key sources of competitive advantage • Greater demand for “brainpower” and knowledge workers in all industries

  15. NE’s Traditional Strengths Should Prove Beneficial in the New Economy • Established “high-tech” employment base • University infrastructure contributing to • Highly skilled workforce • R & D • Venture Capital

  16. Potential Constraints in New England • Relatively slow population and labor force growth • Labor and skill shortages • Dependence on in-migration • Declining market share of college degrees awarded (including engineering and CS) • Lack of affordable housing , especially in eastern Massachusetts • Infrastructure (airports, roads, broadband)

  17. Conclusions for New England • Focus on good jobs, requiring a highly skilled and well-educated workforce • Focus on making the best use of its scarce human resources • Strategies to pursue: • High-Tech job development • Recruitment – focus on headquarters and R&D sites, not low-cost production • Business revitalization

  18. C. Implications for Ireland Class Discussion

  19. Historical Competitive Advantage of Ireland

  20. Irish Economy Strengths

  21. Potential Constraints for Long-Term Economic Growth in Ireland

  22. Conclusions (for Ireland)

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