Path Dependence and Path Plasticity: Textile Cities in the Netherlands Geert Vissers / Ben Dankbaar: Textile Cities in the Netherlands

Geert Vissers / Ben Dankbaar: Textile cities in the Netherlands 83 Zeitschrift für Wirtschaftsgeographie Jg. 57 (2013) Heft 1-2, S. 83–95 Geert Vissers, Enschede / Ben Dankbaar, Nijmegen Path dependence and path plasticity: textile cities in the Netherlands Geert Vissers / Ben Dankbaar: Textile cities in the Netherlands Abstract: Concentrating on three Dutch cities that once had an important textile industry, this study discusses the reasons for the decline of the industry and the responses by firms and other relevant actors. Reasons and responses differed between cities. Therefore, general explanations of the decline of the Dutch textile industry must be supplemented with city-specific accounts. We do not deny that the industry had to deal with path dependence, and lock-in was looming large, but we argue that the demise of the textile industry was not inevitable. The notion of path plasticity helps to direct attention to options that could have been chosen. Keywords: path dependence, path plasticity, textile industry, urban economy, industrial decline Introduction knowledged, little or no attention has been given to the circumstances leading to it. Lock-in is not This paper explores the concepts path depen- caused by outside influences. Actors follow a dence (and its corollary lock-in) and path plas- trajectory that reduces their freedom of action. ticity in an investigation of the decline of the This becomes only apparent when outside cir- textile industry in three Dutch cities that had a cumstances (new competitors, new technolo- leading position in this industry by the middle gies) call for new, untried responses. Our paper of the 20th century. For many years, these cities contributes to the literature by focusing on this and their economies appeared to be following a process by which actors locked themselves up beneficial path of economic and technological and continue to do so in the face of an urgent specialization, but at some point the trajectory need for change. When and why does this hap- turned into a disadvantageous one. We concen- pen? trate on the processes and circumstances that gave rise to an inability-to-change syndrome, In the next section we discuss the relevant litera- and examine firms’ and other actors’ responses ture in more detail. Following a brief description to perceived decline until the point at which of our methods of data collection and we review they had run out of options. A few companies the development and decline of the textile indus- survived, which shows that lock-in is probably tries in Enschede, Tilburg, and Helmond consec- never complete. The concept of path plasticity utively. Our focus is at the level of the individual has been coined to indicate that the path being actors, but includes the political and social en- followed is seldom a dead-end street and indeed vironment affecting their decisions. Then we is being shaped by the actors themselves as they compare the three cases in order to identify and go along. explain processes of choice narrow ing. We then return to the broader theoretical question of local The notion of path dependence was originally or regional path dependence and path plasticity. developed in economics, but came in use in va- In a final section, we look at the present situa- rious other fields, among them economic geo- tion in the three cities and the development of graphy. In his influential study of the Ruhr Area, their economies after the demise of the textile GRABHER (1993) argued that cities and regions industry. can become locked-in after following a path of successful economic development. Companies as well as public authorities are increasingly un- Path dependence and path plasticity able to deal with changing circumstances and, as a consequence, economic decline sets in. While The constraining effects of history have always the possibility of a state of lock-in is widely ac- been known, but they became a major subject of 84 Zeitschrift für Wirtschaftsgeographie Heft 1-2 / 2013 study as a result of the work of economists Brian PERROW (2009, 219) shows the significance of Arthur and Paul David, and especially their no- this distinction, noting that “loosely coupled tion of path dependence. Arthur and David saw systems tolerate processing delays, changes in path dependence as a means to show that equi- the order of sequences, and alternative methods; librium models fail to explain the dynamics of there is slack in resources, and buffers, redun- the economy (ARROW 2000). They focused on dancies, and substitutions are available. Tightly technological development, studying cases as coupled systems are not tolerant in these ways.” diverse as the diffusion of reapers in agriculture, His emphasis on the order of sequences is note- keyboard layout, and video recording systems. worthy. Path dependence means that “future What they found was that initial conditions, events are not independent from past events and which may be the result of historical accidents, the sequence of events makes a difference for the can have strong and lasting effects. These effects outcome” (GLÜCKLER 2007, 620). can be detrimental. Arthur and David stressed the possibility of suboptimal, inefficient out- The distinction between tightly and loosely comes, arguing that economic explanation must coupled systems provides a theoretical basis for take historical events into account. observing changes in the nature of systems over time. A loosely coupled urban economy may Perhaps the best-known example of path depen- develop into a tightly coupled one, or the other dence is the QWERTY keyboard (DAVID 1985). It way round. In addition, the distinction directs would become the canonical example of path attention to the difference between endogenous dependence (MARTIN/SUNLEY 2006). It is an in- and exogenous sources of change. Especially structive example, demonstrating the working in a loosely coupled urban economy it can be of positive feedbacks, but it has also given path difficult to tell the difference between endo- dependence its connotation of wrong choice. In genous and exogenous sources, which is impor- his discussion of QWERTY, DAVID (1985, 336) tant because the literature on path dependence stated that “competition in the absence of per- emphasizes that path changes must be explained fect futures markets drove the industry prema- in terms of endogenous factors, i. e. factors inter- turely into standardization on the wrong system nal to the system (BOSCHMA/MARTIN 2010). – where decentralized decision making subse- quently has sufficed to hold it.” Here the claim As a rule, technological systems will be more is that markets may function in such a way that tightly coupled than urban economies. They an inefficient technology gains dominance, and consist of components that interact with one an- that this unfavorable state of affairs is persis- other under a larger system architecture ( GARUD/ tent because decentralized decision making (the KUMARASWAMY 1995). Typical of technological market) means that no actor is capable of repair. systems is the presence of a single reference Equilibrium-based economics does not account object with a life cycle of restricted duration for such a suboptimal outcome (ARTHUR 1990). (ADNER/LEVINTHAL 2001). Urban and regional economies, in contrast, have many reference The assertion that the present state of an object points (MARTIN 2010) and the life cycle meta- of study – a technology or an urban economy – is phor is of limited use. They usually contain influenced by its previous states requires that an several industries, which is why “a model of object can be specified, and the systems concept regional development paths must allow for tech- is often used for the purpose. But it is not the nologically unrelated regional actors” (BATHELT/ object itself that is path dependent. The QWERTY BOGGS 2003, 269). Moreover they involve pub- keyboard is not reproducing itself but continues lic and private institutes dedicated to learning, to be produced by manufacturers whose deci sion housing, governance, health, or leisure. Not all to do so is sensible as long as a market for such these industries and institutes fit into a single keyboards exists. The systems concept refers to system architecture. Therefore the mechanisms the interrelated sets of actors involved in con- that may explain path dependence in technologi- tinued production, but no distinction is made cal systems cannot be supposed to apply fully, between objects of study that are well-defined without adjustment, to urban economies. and objects of study that are hard to delineate. This difference can be phrased in terms of tightly Path dependence is not necessarily disadvanta- versus loosely coupled systems, with degree of geous. The concept refers to economic activities interdependence and degree of indeterminacy as that are self-reinforcing. The phrase “positive defining characteristics (ORTON/WEICK 1990). lock-in” is sometimes used for self-reinforcing Geert Vissers / Ben Dankbaar: Textile cities in the Netherlands 85 growth processes (MARTIN/SUNLEY 2006; SY- aged to recover, which raises the question what DOW/LERCH/STABER 2010). In the absence of exactly is meant by urban or regional lock-in. such processes, dominant designs would not be possible and de facto standards would not GRABHER (1993), in an early study of regional emerge. These examples relate to technologi- lock-in, distinguishes three different forms. cal systems but geographical examples can be Functional lock-in indicates the efforts of large given as well, most notably spatial agglomera- firms to keep their environment predictable by tion. While often advantageous, self-reinforcing maintaining stable interfirm relations. These processes may also discourage the search for efforts include exchange relations that require alternative lines of activity, as actors are more specific investments and thus lock firms into a or less forced to devote all their efforts to sustain system of mutual dependence. Cognitive lock-in the current path.

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