Donald A. Hicks

Evolving complexity and cost dynamics in the semiconductor industry

The evolving complexity of the relationship between cost and technical capacity is illustrated within the context of the industrial linkage between equipment suppliers and device producers. Extending previous work that demonstrated looming equipment affordability problems facing semiconductor manufacturers, the evidence presented here suggests that the same affordability pressures can afflict semiconductor equipment suppliers, perhaps even more severely. These circumstances have the potential to set in motion a series of adjustment responses so vigorous that they may well substantially rework long-familiar industry fundamentals.

Geo-Industrial Shifts in Advanced Metropolitan Economies

The United States never has developed an explicit national urban-regional development policy and doubtless never will. In spite of this, however, a complex and multifaceted policy debate flared for over a quarter century beginning in the mid-1950s (Committee on National Urban Policy, 1982). The proximate spark for this debate was the growing awareness of the inability of older industrial cities to compensate through in-migration and incubation for the quickening pace of city-leaving and cityavoidance behavior by industry (especially manufacturing) and mobile middle-class households. This debate, for the most part, has subsided in recent years, even though the dynamics that originally triggered it have neither slowed nor reversed. At the heart of the US urban policy debate have always been issues derivative from the continuing processes of technology evolution and shifting demographics and the industrial adjustments made necessary or possible by them being registered as urban and regional growth and development. The dominant dynamic during recent decades has involved the deconcentration of people, capital and employment at several spatial scales. The suburbanization process has inflicted dramatic impacts on older industrial central cities, and recently an extension of this dynamic has caused much growth to filter beyond entire metropolitan areas. At the level of multistate regions, a process of regional convergence has slowly narrowed the historical gaps between the South and West and the more heavily industrialized Northeast and Midwest. Industrial Dynamics in A Global Context: The immediate past decade, by contrast, has been dominated by concerns related to the presumed deterioration of our nations industrial base. Do our lead industries retain the ability to generate the technological foundations they need for the future? Do we have the industrial base sufficient to serve our national defense objectives as well as permit us to compete in international civilian markets? How can we improve the commercial return on our substantial investments in research and development? These and related concerns have engendered a national debate more anxiously focused on whether our national economy retains its capacity to meet foreign competition and sustain high and rising living standards than on where across the economic landscape those assets are amassed or for whom the industrial adjustments are the most difficult.

Global Credentials, Immigration, and Metro- Regional Economic Performance.

This paper places urban regions, rather than nations or transnational firms (TNFs), at the center of global economic organization. Using the Dallas/Fort Worth Metroplex as an illustration, it explains the economic reach of a metro region in terms of the quality and diversity of local resources and global investments assembled there. Human capital flows in the form of foreign immigration are likewise viewed as integral to the global economic model. Their effects on the economic performances of the largest U.S. metro regions during the 1980s are analyzed. The findings suggest that although foreign immigration generally depressed both metro-regional growth and development during the decade, these effects were mediated by business-cycle shifts. Therefore, rather than being regarded as either an unalloyed boon or burden to an economy, foreign immigration effects are discovered to be complex and contingent on background economic circumstances.

Can the telecom equipment industry afford accelerating technical advance

While established producers throughout the telecom industry--and especially upstream equipment manufacturers--have been steadily shifting their investment mixes to support product innovation, new cash returns on those investment shifts often have been steadily declining. Are these trends linked causally, and if so, what are the implications for the industry and beyond? Our centerpiece analyses draw on the conceptual apparata of nonlinear dynamics to illustrate the evolving complexity of the relationship between escalating cost and technical advance throughout the industry since the mid-1970s. We conclude by considering the broader implications of these trends for the industry at large.

The financial undertow of rapid technical advance in new product development

Abstract The logic of time-based competition (TBC) has unleashed a broadside of industrial dynamics whereby the accelerating pace of technical advance may well challenge the financial health of industry-leading producers. Through a series of comparative case studies and subsequent analyses of entire populations of major producers in selected industries, this paper demonstrates that the financial justification for aggressive internal investment in product innovation has been deteriorating over the past decade or two. The results also indicate that TBC-induced financial pressures can flow downstream through industrial linkages from producers of technology-intensive intermediate inputs to end-product producers. Ultimately, in their quest to be time-based competitors, as firms which use rapid technical advance to establish competitive advantage, they can set in motion deeper and broader endogenous influences capable of reworking substantially long-established industry forms and fundamentals.

Affordability concerns in advanced semiconductor manufacturing: the nature of industrial linkage

Does an affordability problem loom in the semiconductor industry? If so, the frantic pace of technical advance may threaten to become the bane of-rather than a boon to-the continuing development of the semiconductor industry. For this reason, semiconductor manufacturing may not be far from a kind of industrial divide that could set in motion a series of paradigm shifts capable of powerfully restructuring industry fundamentals. This paper presents the results of data developed for a case study pair in order to detect any evidence of such an affordability barrier to technical advance. A sequence of analyses that follows seeks to illustrate how the competitive performances of semiconductor manufacturers can be influenced by the performances of their suppliers as financial exigencies are passed forward and backward.

Deep industrial dynamics shaping next-generation semiconductor manufacturing

This paper explores dynamics and sequences by which the semiconductor industry has been transformed during the past decade. It demonstrates that strategic and fab-focused cost-reduction initiatives of lead producers tell only part of the story. Equally important are the more spontaneous developments triggered by shifting cost structures throughout the industry. These developments include (a) the emergence of entirely new producer segments which have redefined the ecology of the industry and (b) the increased vertical disintegration of major producers. Viewing the industry as a complex adaptive system, rather than a collection of producers following a technology roadmap, this paper illustrates the many new and unorchestrated ways the industry now creates value and brings innovative products to market competitively. In so doing, it underscores the significance of the innovation potential embedded deep within the industry.

Redressing Metropolitan Imbalances in Service Delivery: A Time-Series Intervention Analysis of a User Charge Policy*

While a quarter of a century of contributions to the literature on central city-suburb relationships indicates that within a metropolitan context suburban exploitation of central cities may not exist, there is no lessening of the desire to reduce imbalances within a particular urban service delivery sector. This paper assesses the impact of an urban administrative policy intervention aimed at shifting the burden of supporting a municipal service to those who actually use and benefit from it. An interrupted time-series quasi-experimental design is merged with a data analysis strategy employing integrated moving average models. The evidence endorses the adoption of user charges for certain urban services as an effective strategy open to urban bureaucracies for redressing urban public finance imbalances.