Regional Creative Destruction: Production Organization, Globalization, and the Economic Transformation of the Midwest

Abstract

This article examines the role of new forms of production organization in the process of regional economic transformation. I argue that there is a geographic or regional element to the transformative forces which Schumpeter identified as gales of creative destruction as new forms of production organization transform older regions. I question a central theme of recent geographic theory, that new forms of production organization are the province of newly emerging regions, while older manufacturing regions remain trapped in older, outmoded forms. The research explores these issues through the lens of the Industrial Midwest, a region depicted as beset by chronic economic decline and as being locked into outmoded forms of production organization. The data are drawn from a survey of Midwest manufacturers and field research consisting of site visits and personal interviews at a sample of manufacturing plants. The main findings of the research indicate that there has been a high rate of adoption and diffusion of new forms of work and production organization in the Midwest and that this shift has been accelerated by globalization, particularly by the influx of transplant manufacturers who have transferred new production systems to the region. The research also suggests that the region's broader economic recovery is to some degree linked to the adoption and diffusion of these new forms of production organization. The key findings indicate that new forms of production organization have taken root in this older industrial region, contributing to its economic transformation.