David Terkla

Business Strategy and Cross-Industry Clusters

Although industry clusters are becoming the focus of state economic development policies, most states continue to define clusters in ad hoc ways, often focusing only on clusters of firms in single industries. Such policies run the risk of wasting development resources by neglecting important linkages among firms that cut across industries. Exploiting the dynamic nature of the competitive advantages associated with the clustering process requires an understanding of strategic business decisions made at the firm level. This article draws on previous field research to identify several external economies that contribute to the clustering of firms across industries-collaboration economies, transfers of knowledge, local specialized labor pools, and relationships with nonbusiness institutions. The article concludes by suggesting specific development policies that can identify and use these external economies to attract industry clusters.

Hybrids or Hodgepodges? Workplace Practices of Japanese and Domestic Startups in the United States

This study examines the adoption of high-performance workplace management practices in Japanese and domestic manufacturing plants, spanning a broad range of products and technologies, that began operations in the United States between 1978 and 1988. Japanese transplants, the authors find, were likely to adopt “hybrid” systems of high-performance practices melding Japanese principles of workplace management with the American industrial relations system. Domestic startups incorporated many of these same techniques, but they tended to take a more limited and piecemeal approach. The managers of domestic startups also paid less attention to how individual high-performance practices fit into an overall system of efficient workplace management than did managers at Japanese transplants.

Capitalism and Kinship: Do Institutions Matter in the Labor Market?

This study examines the determination of employment and pay on “capitalist” and “kinship” vessels in the New England fishing industry. Capitalist vessels resemble standard competitive firms in the way that employment and pay respond to changing market conditions; kinship vessels operate under work guarantees and income sharing rules. These differences in institutional rules lead to different patterns of income, employment, growth, and labor adjustment. The study shows how an understanding of the institutional structure of labor markets can contribute to the design of public policies to facilitate adjustment to change and to promote industrial growth.

The Rise of Hollywood East: Regional Film Offices as Intermediaries in Film and Television Production Clusters

Foster P., Manning S. and Terkla D. The rise of Hollywood East: regional film offices as intermediaries in film and television production clusters, Regional Studies. Prior research on project-based organizing in creative industries has emphasized the importance of regionally embedded institutions, creative networks and intermediaries in the development of regional project ecologies. Recently, film and television production in the United States has expanded beyond traditional clusters in Hollywood and New York to new locations in the United States, Canada and overseas, raising important questions about the dynamics of increasingly mobile creative project networks. Using data on the Massachusetts film and television industry between 1998 and 2010, it is argued that regional film offices play an increasingly important role as network intermediaries in connecting mobile creative professionals and project entrepreneurs from outside a cluster with labour pools, service providers and production locations inside a cluster on a project-by-project basis.

An analysis of the allocation of Yakima River water in terms of sustainability and economic efficiency

Decades of agricultural growth has led to the over appropriation of Yakima water and the ecological integrity of the Basin has been compromised. We evaluate the impact of current water allocation on the natural flow regime of the Yakima River using the Indicators of Hydrologic Alteration/Range of Variability Analysis and by quantifying indicators of ecosurplus and ecodeficit. We analyze the sustainability of the current water allocation scheme based on a range of sustainability criteria, from weak to strong to environmentally sustainable. Economic efficiency is assessed by describing the current allocation framework and suggesting ways to make it more efficient. Our IHA/RVA analysis suggests that the allocation of water in the Yakima River has resulted in a highly altered flow regime. Ecodeficit is far in excess of ecosurplus. We conclude that this allocation scheme is weakly sustainable, if sustainable at all, in its current framework. The allocation of water is also not economically efficient and we suggest that a reallocation of water rights may be necessary in order to achieve this objective. The creation of water markets to stimulate voluntary water rights transactions is the best way to approach economic efficiency. The first step would be to extend beneficial use requirements to include instream flows, which would essentially allow individuals to convert offstream rights into instream rights. The Washington trust water rights program was implemented as a means of creating a water market, which has contributed to the protection of instream flows, however more needs to be done to create an ideal water rights market so that rights migrate to higher valued uses, many of which are met instream. However, water markets will likely not solve the Yakimas water allocation problems alone; some degree of regulation may still be necessary.

Devolution of Employment and Training Policy: The Case of Older Workers

Summary The case for the devolution of employment and training programs has traditionally been based on the supply side argument that state and local governments are in the best position to assess the training needs of their disadvantaged workers. We provide a different perspective by focusing on the demand side of the labor market and the link between aiding older workers and fostering economic growth. We illustrate the importance of this focus by examining the labor market in Massachusetts, where the full employment economy of the late 1990s resulted in serious labor supply bottlenecks. Older workers, whose ranks are growing rapidly, provide the largest known labor reserve for meeting these labor supply deficits in the next decade. Tapping this reserve, however, means improving skills, deferring retirement, bringing older persons back into the labor market, and increasing full-time employment. Massachusetts already has the policy tools needed to train older workers to fill emerging job needs, but these policies will need to be substantially upgraded and reoriented. Too little funding, an emphasis on short-term programs, lack of coordination among programs, weak linkages to the private sector, and the limited flexibility of human resources practices in both the private and public sectors have left both government programs and employers ill-prepared to utilize fully the older worker labor reserve.

The environmental industry in massachusetts: From rapid growth to maturity

While the environmental industry has often been cited as a significant national industry, quantitative data is limited and difficult to replicate (i.e., in order to follow either national or regional industry trends in employment and sales). Since the industry covers such a wide range of industrial classifications, an analysis at the four-digit SIC level is insufficient. In order to begin to remedy this problem, this article defines the industry at the six and eight digit SIC level and analyzes trends in employment and sales in Massachusetts compared to the nation during the latter half of the 1990s. The Massachusetts environmental industry, which ranks seventh in sales and eighth in employment nationally (and second in sales in the consulting and engineering sector) is examined more closely using industry focus groups. The authors reveal that very little change has occurred in the industry as it continues to focus on pollution cleanup as opposed to prevention during the 1990s. There is also evidence of continuing industry consolidation as well as a slowing of growth in sales. As a result of these trends, the main challenges facing the industry are a) developing higher-margin niches to substitute for lower-margin, more standardized pollution cleanup services, and b) keeping the government sector from further internalizing their work in the form of technical assistance to firms engaged in environmental cleanup.

Japanese Direct Investment and Economic Development Policy

The increasing number of Japanese manufacturing plants locating in the United States presents new opportunities for state and local economic development policy. This article compares the location decisions of Japanese start-ups in manufacturing with counterpart domestic industry and concludes that there are substantial distinctions between Japanese and American firms. Except for a few industries, Japanese firms are not locating in those states that are most attractive to counterpart domestic industries, but are more often choosing average-to low-growth states. Interviews with a small sample of Japanese plants and industrial recruiters suggest that Japanese location decisions in many industries are based on a set of intangible considerations that differ from those that are important to domestic firms.

How intangible factors contribute to economic development: Lessons from a mature local economy

Abstract Building on a case study of a mature manufacturing region in Massachusetts, this paper provides new evidence on the importance of nontraditional cost factors in determining regional growth. Specialized mature manufacturing firms that have broken the product cycle are identified. We then discuss development strategies for using “intangible” factors to promote such firms.

Turning around local economies: Managerial strategies and community assets

Nontraditional “invisible” sources of growth are identified through a case study of a diversified industrial region in Massachusetts. Firm-specific managerial strategies are found to be an important element in the determination of economic growth. Customized and hybrid firms characterize major departures from the product-cycle model in which product specialization and service specialization attached to traditional products allow them to avoid productcycle maturity. The interaction of these business strategies with invisible community factors such as labor force quality and the labor-management environment significantly influences local economic growth. These findings indicate the importance of targeting development efforts at the firm as opposed to the industry level and the need to better utilize local invisible factors as a basis for boosting local economic growth.