Volume 3 Issue 1 Fall 2005

Edited by N. Reid & J. Gatrell

Editors Special Advisor to the Editorial Board Neil Reid, Articles Section Michael Somers, Director of Libraries Department of Geography & Planning Bridgewater State University The University of Toledo Toledo, OH 43606 Technical Advisor Steve Hardin Jay D. Gatrell, Research Notes & Discussion Section ISU Cunningham Memorial Library Department of Geography, Geology, & Anthropology Indiana State University Editorial Assistant Terre Haute, IN 47809 Shirley Griffey Indiana State University Editorial Board S. Bagchi-Sen Roger Hayter SUNY-Buffalo Simon Fraser

J. Bodenman T. Klier Bloomsburg University of PA Federal Reserve of Chicago

F. Calzonetti Dan Knudsen The University of Toledo Indiana University

Christopher Cusack R. Larson Keene State College Indiana State University

A. Glasmeier K. Oshiro Pennsylvania State University Wright State University

R. Hanham C. Pavlik West Virginia University University of Iowa

J.W. Harrington J. Wheeler University of Washington University of Georgia

Mission Publication Information The Industrial Geographer (ISSN 1540-1669) publishes The Industrial Geographer (ISSN 1540-1669) is published bi- articles and research notes that focus on a broad range of annually in the Fall (September-October) and Spring (April-May). economic issues across all economic sectors and explore Additionally, special issues may occasionally be published on an issues at all scales from the firm to the globe. The journal irregular basis. The journal is a collaborative effort between the ISU Cunningham Memorial Library and the Department of encourages submissions that are theoretically driven Geography, Geology, & Anthropology. The IG is also affiliated empirical research, papers with an applied and planning with the Regional Development & Planning Specialty Group of the thrust, and papers that explore directions for future AAG. The journal is also affiliated with the IGU Commission on research. Individuals interested in organizing a special the Dynamics of Economic Spaces. issue should contact the editors or a member of the editorial board. The journal is available free of charge via the internet [http://igeographer.lib.indstate.edu] or vis-à-vis one of many on- line content aggregator services. To contact the publishers, write to The Industrial Geographer, 159 Science, GGA, Indiana State University, Terre Haute, IN 47809. (812)237-2256.

© 2005 Indiana State University, Cunningham Memorial Library. All rights reserved. Where specified, individual articles are the property of the authors.

Table of Contents

Estimating the cost and benefit of hosting Olympic Games 1 J. Owen

Information accelerated radical innovation 19 J. Dismukes

Continuing Business as usual. 43 S. Alvarez & Impink

Select papers in industrial geography 50 E. LaFary

Guidelines for Contributors

Estimating the Cost and Benefit of Hosting Olympic Games: What Can Beijing Expect from Its 2008 Games?

Jeffrey G. Owen Department of Economics Indiana State University Terre Haute, IN 47809 [email protected]

ABSTRACT

Cities who host the Olympic Games must commit to significant investments in sports venues and other infrastructure. It is commonly assumed that the scale of such and event and the scale of the preparation for it will create large and lasting economic benefits to the host city. Economic impact studies confirm these expectations by forecasting economic benefits in the billions of dollars. Unfortunately these studies are filled with misapplications of economic theory that virtually guarantee their projections will be large. Ex-post studies have consistently found no evidence of positive economic impacts from mega-sporting events even remotely approaching the estimates in economic impact studies. For the 2008 Summer Olympic Games in Beijing, it appears China will take these massive investments in venues and infrastructure to a new level. If organizers of the Beijing Games base their expectations on economic impact studies from previous Olympics, they are sure to be disappointed. The potential for long term economic benefits from the Beijing Games will depend critically on how well Olympics related investments in venues and infrastructure can be incorporated into the overall economy in the years following the Games.

INTRODUCTION

“Mega-events” such as the Olympic Games require large Ex-post studies, however, have sums of public money to be spent consistently found no evidence of on venues and infrastructure positive economic impacts from improvements. In order to justify mega-sporting events even the use of public funds, economic remotely approaching the impact studies are often estimates in economic impact commissioned which invariably studies. In a study of the impact project large inflows of money that of Super Bowls on local economies, will have a long-term positive Philip Porter (1999) found “no effect on the economy by such measurable impact on spending means as job creation and visitor associated with the event. The spending. Events of the scale of projected spending and spillover the Olympic Games, which attract benefits of regional impact models large amounts of money from ever materialize” (Porter 1999, p. outside a local economy, are 61). Porter’s explanation is that forecasted to have economic capacity constraints in the hotel impacts in the billions of dollars. industry cause room prices to

The Industrial Geographer, Volume 3, Issue 1, p. 1-18 ©2005 Owen The Industrial Geographer increase with no change in of the economic conditions in occupancy rates. Higher rates China to previous hosts. It seems contribute to the crowding out of logical that a less developed regular traffic and net spending in country will have more to gain areas other than hotel rooms from long term growth changes little or not at all. opportunities. Matheson and Baade (2003) argue, however, that Longer term sports programs, the prospects of mega-sporting usually involving stadium events are even worse for subsidies to attract or keep developing countries. The professional teams, have also opportunity costs of providing failed to deliver on projected state of the art facilities are much economic benefits. Even for cities higher and lack of modern that usually are considered infrastructure requires significant success stories for sports additional investment. development strategy, such as Baltimore (Hamilton and Kahn In what follows, misconceptions 1997) and Indianapolis that lead to the overly optimistic (Rosentraub 1994), empirical forecasts of economic impact research does not find evidence of studies will be explained, with a statistically or economically closer look at impact studies from significant positive impacts. recent Olympic Games. Finally, the plan for the Beijing Olympics In July of 2001, Beijing was will be examined to see how awarded the 2008 Summer China’s experience may compare Olympic Games. Most people to other Games. assume that such an event will bring enormous economic benefits THE FALLACY OF ECONOMC to the host city not just during the IMPACT STUDIES event, but for years afterward. “The scale of the organisation, Economic impact studies have facilities and infrastructure become standard operating required for such a huge procedure for supporters of public undertaking are such that the funding for sports teams or events. Games cannot but have Their prevalence has led to substantial economic effects” acceptance of their findings by the (Sydney 2000 Games, p. 2). But public, media, and even academic what exactly are these economic circles with little or no critical effects, and how do they affect the evaluation. Because of the high quality of life of local residents? profile of such events, large (and positive) economic effects are The relevance of studies such as taken as given; the studies these to the Beijing games confirm what is already believed. depends in part on the similarity Short et al (2000) provides an

Owen 2 The Industrial Geographer example of a typical statement: benefits, ignoring opportunity “The promise of worldwide costs, using gross spending exposure and economic gain has instead of net changes, and using made hosting these major and multipliers that are too large. regularly scheduled sporting affairs a lucrative goal for aspiring In many cases the cost of cities around the world” (Short constructing stadiums, which to a 2000, p. 320). large degree is spent on hiring construction workers and Sports economists, on the other purchasing materials from local hand, have found economic impact suppliers, is counted as a benefit studies lacking both in theory and to the local economy. This is practice. Ex-post studies have arguably the most egregious error consistently failed to find evidence in economic impact studies. It is of any economic benefits related to backward-looking in that it looks sports teams and facilities. In at the production aspect of the examining recent retrospective project and ignores the effect of studies, Coates and Humphreys the actual consumption of the (2003, p. 6) concluded “building product. The following quote new sports facilities and exemplifies the bizarre logic of attracting new professional sports this type of accounting: teams did not raise income per capita or total employment in any The initial construction of a $10 US city.” A closer look at the million sports facility provides methodology of such studies an initial impact of $10 million reveals an appealing but on the local economy. This is the fundamentally flawed line of direct impact. Clearly, the economic reasoning that virtually construction of the facility will guarantees a forecast of large require concrete, steel, economic benefits. construction workers, and so forth. The money spent on these The simple elegance of economic materials and services comprises impact studies, injections of the indirect expenditures, or the money circulating over and over in indirect impacts. (Hefner 1990, an economy to create a multiplier pp. 4-5) effect, has an alluring “something- for-nothing” quality that is hard to refute. The mistakes made in economic impact studies are so Clearly, the initial cost of the numerous that making a lucid project has now been counted as a counter-argument can be difficult. benefit not once, but twice; Critics have focused primarily on directly and indirectly. If the the following areas of economy is at full employment, misapplication: treating costs as the workers needed for the

Owen 3 The Industrial Geographer stadium would have been doing redistributive, putting money into something else: public investment the construction sector, and taking crowds out private investment. it away from other sectors, with During a period of high the fairly safe assumption that unemployment it could be argued expenditures by the general that the project gives jobs to population would be more broad- people who would otherwise be based and thus less obvious. idle, in which case the expense of the stadium is at best a transfer Obtaining a value for the initial from one group to another; still impact of a team or event is the not a benefit. And because this first step in any economic impact method ignores the function of the study. The initial impact is then project, the same employment magnified through the use of a effects could be accomplished if multiplier, based on the idea that the government would “simply money brought into a local give the money to the workers as economy will be respent over and unemployment insurance, or over, becoming income for others employ half the workers to dig a in the economy. hole and the other half to fill it up” (Noll and Zimbalist 1997a, pp. 61- In this way a multiplier also 62). magnifies the errors made in calculating initial impact, Counting construction costs as a especially by once again failing to benefit is also an example of a recognize opportunity costs. The more general error of economic multiplier is applied to any new impact studies: failure to spending in the economy recognize opportunity costs. regardless of the source. If the Alternative uses of local dollars multiplier does not depend on the such as a hospital, education spending source, then it is useless funding, or even letting taxpayers in the comparison of alternative keep their money and spend it on projects—the multiplier cancels what they want are not out. considered. Instead, dollars for the initial investment are Critics of economic impact studies assumed to have come out of thin have used proper application of air. Will the economic impact of basic economic principles to show the expenditure on the project be that the methodology of impact fundamentally different from the studies greatly overestimates the impact that would have occurred if impact of sports teams, stadiums, local residents had spent an equal and events, but they have amount in the economy? The accepted the mercantilist premise answer is yes, but not necessarily of economic impact studies that in the way the economic impact the path toward wealth is through model suggests. The effect will be increasing exports. Mercantilist

Owen 4 The Industrial Geographer thought denies the existence of project, which they refer to as mutually beneficial exchanges. “local growth coalitions,” use these Trade becomes a zero-sum game studies as one tool in promoting where the winner is the seller and events. While the economic impact the loser is the buyer. All that studies “do not destroy the matters is the money trail. Since legitimacy of academic research, local spending does not bring they rationalize continuing to money into the economy, spending pursue questionable social by local consumers is meaningless: policies” (p. 37). The air of “Their expenditure associated authority with which the findings with the sports events is merely of the study are presented create likely to be switched spending, enough confusion in the public to which offers no net economic deflect the criticisms of stimulus to the community, and it economists. should not be counted as economic impact” (Crompton 1995, p. 26). In addition to the standard By elevating the importance of projections of economic impact, exports over the local consumption Olympic studies also include critics have embraced the notion longer term benefits sometimes that only projects that generate referred to as the “Olympic exports are valuable. Legacy.” These legacy effects, derived from positive publicity If increasing net exports is the from the Games, include increased way sporting events benefit a local tourism after the Games, economy, then the Olympic Games attraction of business, and should be an event that makes a infrastructure investments that noticeable contribution to an improve the urban environment. economy. Perhaps no other Legacy impacts are generally not sporting event draws more visitors incorporated into the economic so geographically dispersed or impact numbers, but rather showcases the host city as visibly offered as an additional, as the Olympics. Economic impact unquantifiable benefit. The lack studies prepared for recent of any ex post study that finds Olympic Games contain many of improvements in economic growth the mistakes listed above. Not or living standards due to mega- surprisingly the projected impacts events should cast some suspicion have not come to fruition. on the legacy effects of Olympics, or at least the ability of such Why does the use of economic effects to be transformed into real impact studies persist even in the economic benefits to the local presence of harsh criticism from economy. Baade and Matheson the economics field? Delaney and (2002) found “the evidence Eckstein (2003) propose powerful suggests that the economic impact groups who will benefit from the of the Olympics is transitory, one-

Owen 5 The Industrial Geographer time changes rather than a study predicted significant ‘steady-state’ change” (p. 28). economic benefits to the host city and state. The Games in Atlanta It has also been argued that the did have a definite impact on net Olympic Games can advance a city exports in Georgia, but there is in the hierarchy of “world cities.” precious little evidence of According to Short et al (2000), extraordinary economic “some of the most important performance in Atlanta due to the global spectacles are sports mega- Games, bringing into question events such as the Olympics which who actually benefits from reach a worldwide television increased exports and how this audience and offer perhaps the affects the local economy. best stage upon which a city can make the claim to global status” In an ex post study, Baade and (p. 320). The world cities concept Matheson (2002) found a modest is closely related to the Olympic boost in employment that was legacy, especially regarding short-lived. Even according to tourism, which is seen as a their most positive estimates, “the modern arena of economic City of Atlanta and the State of competition among cities. “During Georgia spent $1.58 billion to this latest phase of globalization, create 24,742 full- or part-time when tourist attractions are jobs which averages out to $63,860 highly prized, many cities are per job created (pp. 28-29). A repackaging the old with new recent study by the Upjohn accommodations or accessibilities Institute estimates that a new job to re-present themselves as living adds about fifty cents in economic history and to take advantage of benefit to a local economy for the global tourism economy” every dollar of wages, so job (Short 2000, p. 319). It is easy to creation alone certainly cannot see how a city such as Beijing justify the public expense for the would find the Olympics appealing Atlanta Games (Persky 2004, p. in this context. 1).

A BRIEF EXAMINATION OF Table 1 summarizes the economic ECONOMIC IMPACT impact projections of the Atlanta STUDIES FROM RECENT study. The impact of the Atlanta OLYMPICS Games was projected to be $5.1 billion. The source of the impact Atlanta (Summer 1996) was nearly equally divided between direct spending by the For the 1996 Summer Games in Atlanta Committee for the Atlanta an economic impact study Olympic Games (ACOG) for was prepared for the state of staging the games and spending Georgia. As one might expect, the by out-of-state visitors.

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Table 1: Projected Output Impact of 1996 Olympics on Georgia’s Economy ($1994) Expenditure Category Total Spending Direct and Indirect Induced Output Total Output Expenditures Impact Impact Direct Spending by ACOG 1,529,758,000 1,141,903,000 1,444,322,740 2,586,225,740 Other Spending 20,000,000 20,000,000 23,944,000 43,944,000 Spending by Out-of-State Visitors 1,265,363,037 1,145,994,764 1,364,364,452 2,511,359,220 Grand Total 2,815,121,037 2,307,897,764 2,832,631,192 5,141,528,960 Source: Atlanta Committee for the Olympic Games and The Selig Center for Economic Growth, (1995).

Direct impact was primarily Olympics will have on other through spending by ACOG, whose tourism; for the rest of the economy budget was comprised of private it is business as usual. funds. While expenditures were adjusted downward to account for In reality, data and anecdotal money that flowed directly out of evidence strongly suggest the Georgia, the study made no Olympics had a significant attempt to determine what crowding out effect on the rest of percentage of the funding came the tourism industry. Table 3 from sources in Georgia. From a shows convention attendance in net inflow standpoint, this led to Atlanta, which had been increasing overestimation of economic impact. steadily over the previous ten Ticket sales comprised 25% of years, fell ten percent from 1995 to ACOG revenues and are the largest 1996. Hotel occupancy rates fell single source of measurement error from 72.9% in 1995 to 68% in 1996 (see Table 2). Tickets purchased by despite the Olympics. Georgia residents should not be Macroeconomic indicators in included in impact calculations Georgia and Fulton County show based on net exports. no discernible break in the pattern of per capita income growth or Fiscal impacts were not reported. unemployment rates (State of Utah This may be because state and 2000). Due to the disruption local tax revenue projections of caused by the Olympics, hotels and $200 million by ACOG did not restaurants that would be expected cover the $353.9 million in to benefit from increased tourist government spending for the traffic were actually hurt. “In games ($92.2 million was federal other parts of town, many hotels expenditure). and restaurants reported significantly lower than normal Spending by out-of-state visitors sales volume during the Games. before, during, and after the Even shops and resorts in areas up Olympics was estimated at $1.265 to 150 miles away reported slower billion and only slightly adjusted than normal downward for leakages to $1.146 billion. The estimates make no attempt to assess the impact the

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Table 2: Sources of Budget for Atlanta Olympics

Source Percent of Budget Broadcast Rights Fees 33.0 Cash Paid by Sponsors 29.5 Ticket Sales 24.7 Licensed Merchandise 1.9 Other Revenues 11.0 Source: Atlanta Committee for the Olympic Games (1996)

Table 3: Atlanta Tourism Indicators

Number of Convention Number of Hotel Year Conventions Attendance Visitors Occupancy 1988 1,623 1,737,800 N/A N/A 1989 1,662 1,800,792 N/A 61.80% 1990 1,721 1,883,546 N/A 62.20% 1991 1,854 2,152,386 N/A 60.40% 1992 2,105 2,503,522 N/A 63.10% 1993 2,321 2,753,412 6,058,000 67.40% 1994 2,410 2,985,641 7,009,900 71.90% 1995 2,560 3,102,455 7,342,000 72.90% 1996 2,280 2,780,000 6,695,000 68.00% Source: State of Utah, Governor's Office of Planning and Budget who sponsored the Games. To business during the summer of some extent the Olympics in 1996” (French and Disher 1997, p. Atlanta were self-contained. Entry 390). of corporations and workers from outside the Atlanta area made the Along with crowding out on the Olympics an economy unto demand side, local businesses and themselves. Much of the income workers must also deal with would go to firms and workers who temporary entry on the supply are not permanent residents of the side. Although the Atlanta local economy. economic impact report makes no mention of entry by either workers Many local businesses that did not or firms, the Atlanta experience have prime access to Olympic serves as an example of how entry venues were caught in a vice can bring into question if area between a reduction in regular residents actually benefit from growth in the tourism sector. The business on the one hand and Centennial Olympic Park in increased competition from entry of downtown Atlanta served as the firms on the other. The lofty focal point for entry of corporations projections of the impact of the Games on the Atlanta economy gave local businesses unrealistic expectations about how they would

Owen 8 The Industrial Geographer be affected. The reality was so spending, convention sites, the much below expectations that some location of major sporting events, vendors who leased vending space and vacation plans will likely be for the Olympics from the city sued among the most enduring, yet Atlanta, claiming they were misled statistically untraceable, legacies about business prospects. Entry of the Games” (Humphreys and drove out above normal profits and Plummer 1995, p. 6). those who paid in anticipation of them were greatly disappointed The study also claims, “world-class (Lubbock Avalanche Journal 1997). facilities will be among the most enduring legacies of hosting the Atlanta’s Olympic experience is 1996 Olympics” (Humphreys and consistent with Porter’s argument Plummer 1995, p. 4). The facilities concerning hotel capacity noted by the study include the constraints discussed earlier. Horse Park, Shooting Range Hotel revenues during the Games Complex, and Rowing Center; none nearly doubled while occupancy of which are likely to be heavily rates stayed about the same (State used after the Games. The primary of Utah 2000, p. 17). In this way, facility, Olympic Stadium, became sectors that have fixed costs high the new home stadium for Atlanta enough to discourage entry for a Braves baseball. Instead of temporary event are able to providing a venue of high quality capture short-term monopoly rents and instant historical significance through higher prices. Just like for future track athletes, the real estate, hotels become a scarce stadium now serves as yet another resource that captures rents. chapter in the story of public Industries with lower entry costs, subsidies for professional sports such as restaurants or teams. Overall, Baade and merchandise sales, have monopoly Matheson (2002) found “only 31 profits competed away. Even when percent of the ACOG expenditures there is a net increase in visitors, were in areas that could reasonable impacts are focused on the lodging be expected to provide a industry while other sectors have measurable economic legacy” (p. any impact from visitors countered 30). by reductions in regular business. Atlanta’s media exposure from the Legacy effects listed in the Atlanta Olympics was not all positive. study emphasized three categories: Traffic problems were oft-cited facilities, media exposure for during the first week, but then Atlanta and the state of Georgia, overshadowed by the Centennial and community benefits. “The long- Park bombing. “As a result of the term beneficial effects on decisions traffic congestion, administrative regarding investment, trade, problems, security breaches and corporate relocation, government over-commercialization, Atlanta

Owen 9 The Industrial Geographer did not receive the kind of media attention it would ideally have The Utah study cites many of the liked” (Essex and Chalkey 1998, p. same Olympic legacy effects as in 194). the Atlanta study with one interesting difference. The Utah Salt Lake City (Winter 2002) study surprisingly predicts population growth from the The State of Utah included Olympics will be temporary, expected migration in its economics despite the transformational effect impact study of the 2002 Winter they will have on the economy. Games in Salt Lake City. The Instead, Olympics related relationship between jobs and migration into Utah “declines to population growth was not lost on zero within a year of the Games” those who prepared Utah’s (p. 2). Urban growth was already economic impact report. In fact the putting a strain on infrastructure job growth projections were used to and resources before the Games. estimate the population growth Evidently the Olympic legacy that “based on the historical showcases your city to the world relationship between job growth only attracts people when you want and population growth” (p. 15). them to be there. What was lost is that job creation is not necessarily a net benefit to Sydney (Summer 2000) the current residents of Utah if population growth absorbs the jobs. The Economic Impact Study of the Sydney Olympic Games by the Table 4 shows population and University of Tasmania along with employment impacts from 1996 to Arthur Andersen (1999) purports March of 2002. There are roughly to have been prepared “using the three new jobs available for every most up-to-date modelling four migrants into Utah during techniques . . . and detailed this period, and about eleven jobs financial information available” (p. for every ten migrants between the 1). Unfortunately, it was also ages of 18 and 65. Migrants of prepared using the most working age are projected to be fundamental flaws in economic slightly less than the number of impact analysis, just like all of the new jobs created. If the majority of studies that came before. migrants between the ages of 18 and 65 plan to work, then most of the job creation due to the Olympics is countered by an increase in the labor force. The employment prospects of current residents of Utah improve only slightly.

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Table 4: Expected Job Creation and Migration due to the Utah Olympics

Change In: 1996 1997 1998 1999 2000 2001 2002 2003 Jan-02 Feb-02 Mar-02 Total Pop. 103 1,572 3,231 7,038 9,781 16,661 3,802 337 24,034 31,695 12,017 18-65 71 1,042 2,127 4,464 6,404 10,925 2,424 233 15,322 22,983 7,661 Jobs 78 1,148 2,383 5,243 7,317 12,590 6,409 256 15,415 25,070 9,655 Jobs/Pop 0.76 0.73 0.74 0.74 0.75 0.76 1.69 0.76 0.64 0.79 0.80 Jobs/18-65 1.10 1.10 1.12 1.17 1.14 1.15 2.64 1.10 1.01 1.09 1.26 Source: State of Utah, Governor's Office of Planning and Budget

The report identifies three sources higher. of direct expenditure: infrastructure construction, Some legacy effects from the operation of the Games, and visits Sydney Games are incorporated by spectators and participants; into the economic impact along with an induced impact: calculations. Specifically, visits due to publicity and international tourism after the awareness of the Games. All four Games is considered the third of these expenditure sources then phase of Olympic impact. Other contributed to the indirect impact legacy effects are barely mentioned (p. 4). (The Sydney and Atlanta in the study. studies reverse the use of the terms “indirect” and “induced.”) Revenues The facilities legacy appears to be from ticket sales and visitor one of expense. Sydney had plans spending, and expenses from for the long-term use of many of its construction and Games operation venues, but four years later the are treated exactly the same. arena that housed gymnastics and There is no recognition of the basketball is in receivership and opportunity costs of devoting “the State Government has been capital and labor resources to the propping up other uneconomic Games. venues since the Olympics to the amount of about $46 million a The study projected an increase in year” (Sydney Morning Herald). the Gross State Product of New South Wales of $5.1 billion, which Beijing coincidentally is the same as the total output impact projected for The Beijing Organizing Committee Georgia from the Atlanta Games. of the Olympic Games (BOCOG) is Two fifths of the impact is charged with the planning and projected to go towards household administration of the 2008 Games. income (about $2 billion). Detailed information on Olympic Corresponding estimates for financing and predicted economic Australia as a whole are about 25% impact are not available for two

Owen 11 The Industrial Geographer reasons— the games are still four Tokyo, Singapore, and Hong Kong. years away, and it is not necessary for Chinese officials and Olympic According to December 2001 organizers to use the overstated budget forecasts (see Table 5), findings of an economic impact capital investments on venues and study as a public relations tool. non-sports infrastructure will be US$14.257 billion. Of this only Still, there are some indications of about 13% (US$1.872 billion) will the objectives and the scope of the be spent on sports venues and the Beijing Olympics. Essex and Olympic Village, which is three Chalkey examined each of the times larger than spending on modern Olympic Games (begun in venues for Atlanta. Table 6 shows 1896) in terms of their impact on the planned investment on urban change. They divided the Olympic venues. Of the 37 Games into three categories: low facilities listed, 16 are new and impact (minimal infrastructure almost all but three require some investment, such as Mexico in 1968 type of upgrade. The biggest and Los Angeles in 1984), Games projects are Wukesong Indoor focusing mainly on additional Stadium (US$282.65 billion) for sports facilities (such as Atlanta in basketball and National Stadium 1996), and Games stimulating (US$246.71 billion) for athletics transformations of the built and ceremonies. environment (such as Tokyo in 1964 and Montreal in 1976). As Surprisingly, 60% of the Non the Games have grown in stature, BOCOG budget is for so have the ambitions of host cities, environmental protection. It so more recent games are more appears that Beijing intends to use likely to be in the third category. the Olympics as a catalyst for This certainly appears to be the environmental improvements in case for Beijing. the areas of air quality, water conservation, waste disposal, clean Beijing’s hopes of the energy development, and “greening transformational power of the up” of the landscape. Olympics point to China’s Transportation improvements are ambitions on the world stage. In a part of the environmental classification of world cities, improvements. Plans include Derudder et al (2003) classify expansion of public transportation Beijing in their second tier as a systems and conversion of city “major regional world city” along buses to clean energy. The with cities such as Washington, transportation plan addresses a Hamburg, and Cairo. China may wide range of topics, everything see the Games as an opportunity from highway construction and for Beijing to join or even surpass pollution control to teaching the three Asian first tier cities: English to cab drivers and improve

Owen 12 The Industrial Geographer the driving habits of the general impacts, net increases in tax population. revenue, in their evaluation of economic benefits. For Beijing, Every host of the Olympic games fiscal impacts will only exist for sees it as an opportunity to indirect spending. This could be showcase their country to the world considered a more direct form of with the hope of encouraging long tax-increment financing. run tourism or investment increases. For Beijing, emphasis in Of course the capital investments this area appears to be on the outlined in the Non BOCOG environment and technology, budget dwarf the revenues and especially communications. The expenditures of BOCOG. The Beijing Olympic Action Plan is question is: how much of the more reminiscent of a Worlds’ Fair capital investment should be than a sporting event. “We shall considered a cost of the Olympic energetically develop science and Games? Ideally, many of these technology and be determined to investments will have long term make the Beijing Olympic Games value, but assessing that value, be a window and stage of showing and more importantly how that Chinese new/high-technology and value compares to the opportunity innovative strength simultaneously cost of foregoing alternative capital (p. 2)”. investment opportunities, is no easy task. The BOCOG budget (Table 5) actually projects a small surplus, Often events such as the Olympics but this does not mean the are given credit for governments Olympics will pay for themselves. making investments in Included with revenue are infrastructure that would have subsidies from the national and been done much later or not at all. municipal government (US$50 However, the economic conditions million from each) and a lottery that led to these projects not being expected to generate US$180 pursued prior to the Olympics are million. In addition BOCOG not likely to have changed greatly. receives an indirect subsidy by being granted tax-exempt status. It may well be the case that The exemption includes revenues Olympics cause investments to be from foreign sources such as made too soon, instead of broadcast rights and sponsorships. preventing them from being made The IOC has also been granted tax- too late. For example, according to exempt status, which among other BOCOG there are currently 458 things will exempt athletes who hotels with 84,812 rooms in win prize money from income tax. Beijing, which is, “so many hotel This is unusual in that rooms that tourists visiting the city governments often include fiscal will have no trouble finding a place

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Table 5 BOCOG BUDGET Revenues US$ m % Expenditure US$ m % Television Rights 709 43.63% Capital Investment 190 11.69% TOP sponsorship 130 8.00% Sports Facilities 102 6.28% Local sponsorship 130 8.00% Olympic Village 40 2.46% Licensing 50 3.08% MPC and IBC 45 2.77% Official Suppliers 20 1.23% MV 3 0.18% Olympic Coins Program 8 0.49% Operations 1419 87.32% Philately 12 0.74% Sports Events 275 16.92% Lotteries 180 11.08% Olympic Village 65 4.00% Ticket Sales 140 8.62% MPC and IBC 360 22.15% Donations 20 1.23% MV 10 0.62% Disposal of Assets 80 4.92% Ceremonies and Programs 100 6.15% Subsidies 100 6.15% Medical Services 30 1.85% Others 46 2.83% Catering 51 3.14% Transport 70 4.31% Security 50 3.08% Paralympic Games 82 5.05% Advertising and Promotion 60 3.69% Administration 125 7.69% Pre-Olympic events and coordination 40 2.46% Other 101 6.22% Surplus 16 0.98% Total 1625 1625 Source: BOCOG, www.beijing-2008.org

BOCOG NON BUDGET (City, Regional, or State Authorities and Private Sector) Capital Investments Construction Cost (US$ m) 2001 2002 2003 2004 2005 2006 2007 2008 Total Planned Non Olympic Expenditure Environment Protection 1000 1000 1500 1500 1500 1300 827 0 8627 Roads & railways 547 592 636 636 636 313 313 0 3673 Airport 12 30 31 12 0 0 0 0 85 Olympic Related Expenditure Sports Venues 213 425 496 283 12 0 1429 Olympic Village 111 159 135 38 442 Total 1559 1622 2380 2573 2743 2055 1287 38 14257

Owen 14 The Industrial Geographer that suits their specific needs” Instead of being a catalyst for (www.Beijing-2008.org). BOCOG beneficial long-term investment also projects that by 2008 there projects, the Olympic Games are will be 800 hotels with 130,000 more likely to divert attention and rooms. Will there be too many resources away from such projects. hotels or will tourism growth make The extent to which infrastructure up the difference? investments can be utilized after the Games will be the primary Capital infrastructure expend- determinant of their economic itures are nearly nine times larger success. than the revenue and operating expenses of the Games; they will CONCLUSION not pay for themselves during those two weeks. After the Games To date there has not been a study the sports venues (see Table 6) will of an Olympics or other large-scale for the most part be turned over to sporting event that has found organizations that can utilize the empirical evidence of significant facility for their sports. Was economic impacts such as increases Beijing so lacking in sports and in household income. For the recreational facilities that nearly reasons stated above, it is unlikely $2 billion can be productively that anyone ever will. Is there invested, or could those resources anything unique about the Beijing be put to a more effective use? For Olympics that may make their these organizations having state- effect different from previous of-the-art facilities is surely a Olympics, either positively or wonderful thing, but probably not a negatively? wise investment from a social welfare standpoint, as shown by One possible difference is the due the Sydney experience. to the opportunity cost of labor in China. If surplus or misallocated In short the degree to which capital labor resources exist in China, job infrastructure investments are creation from the construction and worthwhile depends on how useful operation of the Games could be they can be after the Games. Many considered a transfer with zero net projects, such as transportation, social cost instead of an communication, and environmental opportunity cost. Of course this improvements certainly provide would be true of any project, so the social benefits. But if the benefits question of whether alternative of such projects outweigh the costs, infrastructure investments would why would an Olympic Games be be more valuable remains. necessary for spur the project China may have more to gain in forward, especially in China, where the areas of tourism and public affirmation in a political investment if they are able to marketplace is not necessary? project a positive image to the rest

Owen 15 The Industrial Geographer of the world. Certainly more ambitious plans for infrastructure potential exists for tourism growth investment in the areas of in China than in more established environment and technology. destinations in Europe or North America. This could explain the

Table 6 Total Investment in Facilities (US $ M)

Sports Facilities BOCOG Budget Non BOCOG Budget Total New Upgrade Subtotal New Upgrade Subtotal National Stadium 246.71 246.71 246.71 National Indoor Stadium 45.67 45.67 45.67 National Swimming Center 107.51 107.51 107.51 CIEC Hall A 6.00 6.00 6.00 CIEC Hall B 4.00 4.00 4.00 CIEC Hall C 3.00 3.00 3.00 CIEC Hall D 7.00 7.00 7.00 Olympic Green Archery Ground 0.00 National Tennis Center 43.92 43.92 43.92 National Hockey Stadium 68.02 68.02 68.02 Olympic Sports Centre Stadium 12.00 12.00 12.99 12.99 24.99 Olympic Sports Centre Gymnasium 7.00 7.00 27.69 27.69 34.69 Olympic Sports Centre Softball Field 8.00 8.00 20.16 20.16 28.16 Ying Tung Natatorium 8.00 8.00 8.00 Beijing Shooting Range 3.50 3.50 3.50 Beijing Shooting Hall 37.51 37.51 37.51 Laoshan Velodrome 42.68 3.31 45.99 45.99 Laoshan Mountain Bike Course 4.00 4.00 4.00 Road Cycling Course 0.00 Wukesong Indoor Stadium 282.65 282.65 282.65 Wukesong Baseball Field 31.77 31.77 31.77 Fengtai Baseball Field 28.48 28.48 28.48 Forbidden City Triathlon Venue 3.50 3.50 3.50 Shunyi Olympic Aquatic Park 74.85 74.85 74.85 Beijing Country Equestrian Park 15.00 15.00 101.01 101.01 116.01 Shoutiyuan Sports Hall 34.22 34.22 34.22 Beihang Gymnasium 1.75 1.75 1.75 Beitida Sports Hall 13.03 13.03 13.03 Capital Indoor Stadium 7.00 7.00 7.00 Workers' Stadium 3.50 3.50 3.50 Workers' Indoor Arena 3.50 3.50 3.50 Tiananmen Beach Volleyball Ground 0.00 Qingdao International Marina 87.59 87.59 87.59 Tianjin Stadium 83.21 83.21 83.21 Qinhuangdao Stadium 36.14 36.14 36.14 Shenyang Wulihe Stadium 1.75 1.75 1.75 Shenyang Stadium 3.50 3.50 3.50

Owen 16 The Industrial Geographer

Olympic Village 40.00 40.00 442.48 442.48 482.48 MPC 30.00 30.00 30.00 IBC 15.00 15.00 15.00 Media Village 3.00 3.00 3.00 Total 40.00 150.00 190.00 1820.44 51.16 1871.60 2061.60 Source: BOCOG, www.beijing-2008.org

A potential negative that may be Baade, Robert A. & Allen R. Sanderson. particularly acute for Beijing is 1997b. The Employment Effect of Teams displacement of local residents. and Sports Facilities. In Sports, Jobs, and Taxes, edited by Noll and Zimbalist. The The Olympic Village is slated to be Brookings Institute. converted to housing, but the number of new venues and the Baade, Robert A. & Victor Matheson. environmental program to “green 2002. Bidding for the Olympics: Fool’s up” the city are certain to decrease Gold? In Transatlantic Sport, edited by Barros, Ibrahim, and Szymanski. Edward the livable space in a city of 13 Elgar Publishing. million. Will Beijing’s Olympic lead to temporary inconvenience or Beijing Organizing Committee of the even permanent displacement for Olympic Games. 2001. Beijing Olympic its poorest residents? Action Plan.

Beijing Organizing Committee of the Long term affects such as these Olympic Games. www.beijing-2008.org involve a great deal of speculation (website). and may be difficult to evaluate even after the fact. What Coates, Dennis & Brad R. Humphreys. 2003. Professional Sports Facilities, experience does teach us, however, Franchises and Urban Economic is that China should not expect the Development. University of Maryland types of effects predicted by Baltimore County, Working Paper No. 03- economic impact studies. Theory 103. and reality show they simply do Crompton, John L. 1995. Economic Impact not exist. Analysis of Sports Facilities and Events: Eleven Sources of Misapplication. Journal BIBLIOGRAPHY of Sport Management. 9: 14-35.

Baade, Robert A. & Richard Dye. 1988a. Delaney, Kevin J. & Rick Eckstein. 2003. An Analysis of the Economic Rationale for Public Dollars, Private Stadiums. Rutgers Public Subsidization of Sports Stadiums. University Press. The Annals of Regional Science Vol. 23, pp. 37-42. Derudder, B., P.J. Taylor, F. Witlox, & G. Catalano. 2003. Hierarchical Tendencies Baade, Robert A. & Richard Dye. 1988b. and Regional Patterns in the World Cities Sports Stadiums and Area Development: Network: A Global Urban Analysis of 234 A Critical Review. Economic Development Cities. Regional Studies. 37: 875-886. Quarterly 2:265-275. Essex, Stephen & Brian Chalkley. 1998. Olympic Games: Catalyst of Urban Change. Leisure Studies 17: 187-206.

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Fizel, John, Elizabeth Gustafson, & Noll, Roger G. & Andrew Zimbalist. Lawrence Hadley, eds. 1999. Sports 1997b. Sports, Jobs, and Taxes. The Economics:Current Research. Praeger Brookings Institute. Publishers. Persky, Joseph, Daniel Felsentein, & Fort, Rodney. 1997. Direct Democracy and Virginia Carlson. What Are Jobs Worth? the Stadium Mess. In Sports, Jobs, and Employment Research. Upjohn Institute, Taxes, edited by Noll and Zimbalist. The July 2004. Brookings Institute. Porter, Philip K. 1999. Mega-Sports French, Steven P. & Mike E. Disher. 1997. Events as Municipal Investments: A “Atlanta and the Olympics: A One-Year Critique of Impact Analysis. In Sports Retrospective. Journal of the American Economics: Current Research, edited by Planning Association 63:379-392. John Fizel, Elizabeth Gustafson, and Lawrence Hadley. Praeger Press. Hamilton, Bruce W. & Peter Kahn. 1997. Baltimore’s Camden Yards Ballparks. In Rosentraub, Mark S. 1997b. Stadiums and Sports, Jobs, and Taxes, edited by Noll Urban Space. In Sports, Jobs, and Taxes, and Zimbalist. The Brookings Institute. edited by Noll and Zimbalist. The Brookings Institute. Hefner, Frank L. 1990. Using Economic Models to Measure the Impact of Sports Rosentraub, Mark S., David Swindell, on Local Economies. Journal of Sport and Michael Przybylski, & Daniel Mullins. Social Issues 14:1-13. 1994. Sport and Downtown Development Strategy: If You Build It, Will Jobs Come? Hendricks, Wallace, ed. 1997. Advances in Journal of Urban Affairs. 16:221-239. the Economics of Sport, Vol. 2. JAI Press, Inc. Short, J.R., C. Breitbach, S. Buckman, & J. Essex. 2000. From World Cities to Humphreys, Jeffrey M. and Michael K. Gateway Cities: Extending the Boundaries Plummer. 1995. The Economic Impact of of Globalization Theory. City 4:317-337. Hosting the 1996 Summer Olympics. Atlanta Committee for the Olympic State of Utah, Governor’s Office of Games, Inc. Planning and Budget. 2000. 2002 Olympic Winter Games: Economic, Demographic Lubbock Avalanche-Journal. 1997. and Fiscal Impacts. Olympic Vendors Could Cost Atlanta. 24- May. Swindell, David & Mark S. Rosentraub. 1998. Who Benefits from the Presence of Matheson, Victor & Robert A. Baade. Professional Sports Teams? The 2003. Mega-Sporting Events in Developing Implications for Public Funding of Nations: Playing the Way to Prosperity? Stadiums and Arenas. Public Unpublished manuscript. Administration Review 58:11-20.

Mills, Edwin S. 1993. The Misuse of The University of Tasmania Centre for Regional Economic Models. CATO Regional Economic Analysis and Arthur Journal. 13:29-39. Andersen 1999. Economic Impact Study of the Sydney 2000 Olympic Games. Noll, Roger G. & Andrew Zimbalist. 1997a. The Economic Impact of Sports Zimmerman, Dennis. 1997. Subsidizing Teams and Facilities. In Sports, Jobs, and Stadiums: Who Benefits, Who Pays? In Taxes, edited by Noll and Zimbalist. The Sports, Jobs, and Taxes, edited by Noll Brookings Institute. and Zimbalist. The Brookings Institute.

Owen 18 Information Accelerated Radical Innovation From Principles to an Operational Methodology

John P. Dismukes Chemical and Environmental Engineering Department Manufacturing Value Chain Innovation Center The University of Toledo Toledo, Ohio 43606

ABSTRACT

Recognition since the mid 20th Century that scientific technology is the key driver of economic development and job growth, has sparked increasing collaboration of government, industry and academia in commercial areas outside the historical focus areas of defense, public health and transportation. Notwithstanding, theories and tools to anticipate innovation with certainty are limited primarily to those instances of incremental innovation, for which historical project analysis provides a sound basis for planning. The capability for real time computation and telecommunication makes rapid development and commercialization of breakthrough innovations imperative for competitive success in the globally connected 21st Century environment.

This paper assesses the course of technology from its empirical base in antiquity through the initial scientific technology stage of the 19th and 20th Centuries, to the 21st Century environment governed increasingly by technologies of thinking. It examines the need for and benefits from a new information technology enabled paradigm of Accelerated Radical Innovation (ARI). By combining advanced information and telecommunications technology tools and innovation management techniques in a real-time decision-making environment, the ARI paradigm has the potential to overcome technological, organizational and societal challenges and hurdles, thereby achieving a factor of 10X improvement in radical innovation effectiveness.

Further development of this proposed new paradigm is envisioned through a collaborative multi-university program of research and teaching, in collaboration with selected industrial partners to identify methodology variants appropriate for diverse companies and industries. Successful implementation will contribute significantly to the proposed activities required for a 21st Century innovation ecology, envisioned by the National Innovation Initiative report, “Innovate America”.

Key Words: Accelerated Radical Innovation, Paradigm, Challenges, Hurdles, Information Technology

The Industrial Geographer, Volume 3, Issue 1, pp.19-42. ©2005 Dismukes

The Industrial Geographer

Background and Introduction technology (MOT) research dedicated From antiquity tacit knowledge and to better understanding and empirical discovery provided the improving industrial innovation basis for major technology advances, through collaborative industry- and subsequent incremental university-government initiatives improvements associated with the (Kelly 1978). National Research Council workshops (NRC 1987, NRC maturing of these technologies and 1991) have further stimulated their geographical and temporal systematic study of the innovation propagation (Merrifield 1999). The process leading to the recognition of 19th Century marked the boundary many diverse individual and between the ancient world and the organizational roles important for modern world (Betz 2003) success (Fusfeld 1994, Roberts 1987 characterized increasingly by the and 1988, von Hippel 1986 and 1988). disciplinary influence of science and Nevertheless, the complexities the research university in defining inherent to innovation have hindered the underlying principles for a the development of qualitative and quantitative models for forecasting rapidly growing science and and prediction (Age 1995). High technology infrastructure that performance execution of innovation enables technological innovation projects to plan are limited to based on scientific technology. The incremental innovation projects for rise of large industrial organizations which documented, historical in the late 19th Century played a procedures provide a basis for significant role through the formation repeated success (Senhar 1995). Due of major, central research and to the unavailability of a sound, development laboratories seeking general theory for improving radical competitive advantage based on innovation effectiveness, practical guidelines for breakthrough proprietary technology (Fusfeld innovation are still based primarily th 1994). During the 20 Century the on historical best practices from case size and scope of industrial research study research (Leifer 2000 and 2001, grew both geographically and O’Connor 2001 and 2005, virtually due to the increasing Christensen 1995). capability of transportation, communication and computing Recently a consensus has emerged technologies (Gerybadze 1999). (NII 2004) that a more rapid and effective approach to radical Recognition since the mid 20th innovation is needed for future Century that technology is the key industrial and societal driver of innovation (Schumpeter competitiveness. Existing innovation 1939, Mensch 1982), has stimulated strategies for cost reduction and multidisciplinary management of continuous improvement over the

Dismukes 20 The Industrial Geographer

past 25 years are inadequate, and technology revolutions, assesses the may prove counterproductive in structure and practice of incremental creating the high growth rate and radical innovation, and further industries and sustained economic develops the vision and mission development and job creation recently proposed (Dismukes 2004; required for success in the globally Bers 2004) for the new paradigm of connected 21st Century world. Accelerated Radical Innovation (ARI). The result is a strategic In May 2004, a group of fifty leading roadmap and plan for its scholars and industrial practitioners implementation through iterative of radical innovation from around the university-industry collaboration world (Dismukes 2004, Bers 2004) funded by government and established the vision for a foundations, to validate and teach dramatically improved, global, the methodology. accelerated radical innovation methodology that could significantly Current Status and Future improve the arduous, meandering, Directions of Technological often decades-long process of radical Innovation innovation, thereby achieving a factor of 2X-10X improvement in The Phenomenon of Industrial or innovation effectiveness, as measured Technology Revolutions by reduced risk, reduced time and From antiquity technology has reduced cost. To realize this vision, played an important role in they proposed a mission to develop innovations that determined the sound theory and validate practical economic status of individuals and open-innovation approaches societies, and their geographical and (Chesbrough 2003) that would temporal propagation. Various eras integrate academic and business are often historically linked to innovation professionals and specific technologies that played a knowledge workers in a collaborative key role at that time and place environment enhanced by computer (Merrifield 1999). Hence the stone science and telecommunication tools. age, copper age, bronze age and iron age, for example, are associated with In today’s geographically and technologies based on tacit virtually connected society, the knowledge and empirical discovery, widespread availability of education before the advent of modern science. and knowledge, and access to The impact of technology on exponentially increasing power of individuals and society changed information technology for real time irreversibly (Betz 2003) from the interaction makes possible the ancient world to the modern world development of a practical based on the rise and adoption of the breakthrough innovation process paradigm of scientific technology with a sound theoretical basis. This in the late 1700’s. This new paper briefly reviews the course of paradigm emphasizes the rationality

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of nature and the possibility for remained approximately constant at human beings to successfully 50-60 years. investigate, understand and develop technological applications based on Theory and Practice of Technological the scientific laws and principles Innovation in the 20th Century governing the physical world, e.g. chemistry, physics, biology, and the Prior to 1930 the influence of various engineering disciplines. technology on innovation and economic growth was largely ignored, The industrial revolution model in favor of classical economic theory (Perez 2002) views technological and in which technological change is economic growth over the last 230 viewed outside the scope of years in the empirical context of five economics, and prices of products and technology revolutions (Table 1) each services move to reach an of approximately 50-60 years equilibrium equating supply and duration. Perez associates each demand required by Adam Smith’s revolution with a specific period or theory of the “invisible hand”. The age, a core geographical region of published work of the early pioneers origin, a nominal “big bang” or in this field (Kondratiev 1926, launch event, and a time of maturity Schumpeter 1939) provided clear of the core technologies. Each evidence that new technology exerts technological revolution comprises a “creative destruction” effect, sequential, experimentally measured whereby new products, processes and periods of discovery and markets are created and existing commercialization, followed by ones become mature or obsolete. diffusion and eventual maturation of Technology is thus a powerful and the technologies. Although the basis often dominant driver of economic is empirical, not theoretical, the rate growth, even more significant than of historical growth and diffusion of labor and capital. Indeed, studies by particular technology applications the National Science Foundation can be mathematically retrofit have confirmed that technology (Hirooka 2003) to substitution type contributed approximately 50% of plots (Fischer 1971) based on economic growth in the United States demographic saturation of end over the last 50 years of the 20th application usage. Century.

A significant and as yet unexplained Published research studies of the feature of this model, warranting innovation process began in the further research, is that even though 1950s with investigation of the scientific knowledge and the number phenomenon of spatial and temporal of worldwide scientific investigators technology and product diffusion has been exponentially increasing, (Rogers 1962, Grubler 1997, Baptista the nominal duration of these 2001). Progressively, physical and innovation cycles appears to have

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Table 1. Summary of Scientific Technology Revolutions Since the Late 1700s, Representing Each as a Constant 50-60 Year Cycle

Scientific Period or Age Core Region Big Bang Launch Maturity Technology of Launch Event (approximate) Revolution (feasibility)

1st Industrial Britain Arkwight 1771 1829 Revolution Textile Mill

2nd Steam and Railways Britain Rocket 1829 1873 (Europe & USA) Steam Engine

3rd Steel, Electricity, USA & Bessemer Steel 1875 1918 Heavy Engineering Germany Plant (Britain) 4th Oil, Automobile, USA 1st Ford 1908 1974 Mass Production (Germany & Model T Europe) 5th Information, USA 1st Intel 1971 2045 (Perez (2002) Telecommunications, (Europe & Asia) Microprocessor Hirooka (2003) Biotechnology, Nanotechnology

social scientists and business launching new multidisciplinary professionals took up the study of Management of Technology (MOT) innovation, with initial focus on programs within universities. The identifying the important factors following are representative of the influencing the success of many published studies assessing technological innovation (Kelly 1978, diverse individual, organizational, Myers 1976). Recognition of the geographical and societal factors competitive threat to US important for initiation, propagation manufacturing by the Japanese and renewal of innovation during 1970s also stimulated (Abernathy, 1974 and 1977, Carlsson increased study of the innovation 2002, Chesbrough, 2003, Collins, process, as reflected by the 1994 and 2001, Drucker 1993 and exponential increase in the number of 1999 and 2002, Eidt 1995, Kocaoglu papers on innovation, Figure 1, 1994, Kodama 1995, Leifer 2000 and appearing in peer reviewed journals 2001, Mansfield 1968, McElvey 1985, between 1970 and 2000. During this Moore 1999 and 2002, Porter 1990, period two industry-university- Roberts 1987 and 1988, Rouse 1992, government workshops sponsored by Smits 2002, Utterback 1974 and the National Research Council (NRC 1993, and von Hippel 1986 and 1988). 1987, NRC 1991) recommended

Dismukes 23 The Industrial Geographer

Figure 1. Exponential Increase from 1970-2000 of Published Papers Dealing with the Technological Innovation Process

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General Strategy l a c i 400 nt g e o l m no ge h a c n a Te

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Multiple Database and Screened - Selective Strategy Compendex and ABI inform - General Strategy

As a result of these studies it also has imitative, new to the company, new become clear that interactive to the world, and others (Mueser engineering-business-social science 1985, Shenhar 1995, Garcia and approaches to technological Calantone 2002, Betz 2003). Due to innovation are required for the complexity of the phenomenon, development of a robust theory and no universally accepted typology model of innovation (Aje 1995). exists. For simplification and clarity of focus, in this paper innovations are Observed Innovation Patterns Based classified fundamentally in two on Incremental and Radical categories, as either incremental Innovation (continuous) or radical (discontinuous), with additional Literature studies have proposed descriptors providing insight into the classification of innovations in a nuances of the innovation process as number of types, including basic, indicated in Table 2. An incremental radical, disruptive, discontinuous, innovation represents a relatively next generation, incremental, small and

Dismukes 24 The Industrial Geographer

Table 2. Innovation Categories Based on Level of Innovation Uncertainty Combined With Other Differentiating Innovation Characteristics

Differentiating Incremental Innovation Radical Innovation Innovation Characteristics Low-Tech Medium-Tech High-Tech Super-High-Tech

Technology No new Some new Integration of Development and technology technology new, existing integration of new technology technology and system

Scope of Product Existing Some newness Major newness Broad newness of or Service material, of scope of scope scope component, subsystem, system, array

Time Months, Months to Several to many Many years to (months, years, estimated with several years, years, estimated decades, estimated decades) high accuracy estimated with with with extreme fair accuracy uncertainty uncertainty due to numerous re-do loops

Company or Small, medium Small, medium Venture, small, Venture, small, Organization or large or large medium, large medium, large Size

Industry Various Various Various Various product, product, product, product, process, and service process, and process, and process, and providers service service service providers providers providers

Supply Chain or Regional, Regional, Regional, Regional, national Value Chain national or national or national or or global global global global

Market Known market Known market Anticipated Anticipated product and customer and customer customer or service need

Company Age, Core Age, Core Age, Core Age, Core Values, Structure and Values, Vision Values, Vision Values, Vision Vision Culture

continuing improvement to an cumulative impact of incremental existing technology, so that the innovations can be quite large as

Dismukes 25 The Industrial Geographer

represented by an S-curve of incremental innovations. High progress. However, these tech innovations require the improvements typically approach integration of new, but known diminishing returns based on technologies into new, first of a kind reaching some fundamental limit product, process or service. Super imposed by the physical nature of the high tech innovations require the core technology (Foster, 1986). In design and integration of new, key contrast, a radical innovation technologies into a new family of represents a dramatic, major, product, process or service improvement based on a representing a quantum leap in discontinuity in the type of core performance and cost effectiveness technology and magnitude of for the user. Both high tech and application performance achieved super high tech innovations can be (Leifer 2000). Most often, radical considered as radical innovations. innovations have no clearly defined performance specification or market Even a brief inspection of Table 2 as first conceived. Thus an iterative suggests why a quantitative or even process of technology push and qualitative general theory of market pull is typically involved innovation is so elusive (Age 1995). during which product specifications Any defining theory of innovation and cost are examined and debated must deal with at least the eight by supplier and customer, and finally innovation characteristics indicated concurrently defined leading to as rows: 1) technology, 2) scope of eventual market acceptance. product, process or service, 3) time, 4) size of company or organization, 5) The classification in Table 2 follows industry, 6) supply chain or value the phenomenology of an earlier chain, 7) market and customers, 8) analysis (Shenhar 1995) proposing organizational structure and culture. that that innovations first be grouped The complexity of this tabular into columns representing four levels representation of innovation perhaps of technological uncertainty: 1) low- provides a clue why a constant period tech, 2) medium-tech, 3) high-tech of 50-60 years has been repeatedly and 4) super-high-tech. Low tech assigned to the industrial or innovations involve no new technology revolutions discussed in technology, and the company Section 2.1. This simple analysis also addressing them has a successful suggests that any significant advance track record and ample history of in methodologies and tools for successful innovation projects of this improvement of innovation type. Medium tech innovations are effectiveness must deal with this similar to low tech innovations, but complexity. require incorporation of some new technology that appears well defined. Paradigm Shift From Scientific Both low tech and medium tech Technology to Accelerated Radical innovations can be considered as Innovation Figure 2, adapted from a

Dismukes 26 The Industrial Geographer

Figure 2. Schematic Representation of the R&D Process Sequence From Concept to Commercialization.

published paper (Walton 1989) a technological revolution roadmap, reveals early recognition of the schematically shown in Figure 3, significant impact of information in depicting a fundamental postulate as enhancing the progress of R&D a guide to further advance the theory towards commercialization. This and practice of radical innovation. effort, undertaken by the author and Specifically, Figure 3 proposes that a co-workers at Exxon Research and paradigm shift has been in progress Engineering in the late 1980s to since the beginning of the 5th investigate the effect of information technological revolution (ca. 1971), retrieval and analysis on materials whereby the world is in transition science R&D, is one of the first from a period (ca. 1771- 1971) published studies documenting the dominated primarily by scientific importance of information technologies of power to a 21st assessment for enhancing the Century world that will be effectiveness of research. These increasingly dominated by scientific technologies of thinking (Betz results motivated further research 1997). leading to the recent development of

Dismukes 27 The Industrial Geographer

Figure 3. Paradigm Shift from Economic Progress Driven by Technologies of Power During The First Four Technology Revolutions, to Economic Progress in the Fifth Technology Revolution Driven By Technologies of Thinking.

TECHNOLOGICAL REVOLUTION ROADMAP INFOTECH Carlotta 1st 2nd 3rd 4th 5th 13 Perez REVOLUTION REVOLUTION REVOLUTION REVOLUTION REVOLUTION NANOTECH (2002) BIOTECH 11 11 11 12 11

1700 1800 1900 2000

TECHNOLOGY REVOLUTIONS WORLDWIDE GROWTH GLOBAL COMPETITION

U WORLD N WIDE I V QUALITY Agriculture SCIENCE 18th E NATURAL LAND GRANT 21st & The R PHILOSOPHY COLLEGES IN Century Mechanical Arts Endless Century S Frontier I W HIGH W Paradigm T TECH Y 2 Paradigm Of P Of T I R N E O LABOR A Scientific D NEW INDUSTRIAL MASS D Accelerated U TECHNOLOGY TECHNOLOGY RESEARCH M MARKET U Technology S INDUSTRIES LABORATORIES PRODUCTS C Radical CAPITAL T R T & Innovation (Betz, 2003) R S Y D & (Dismukes, 2004) S G Y S N O GOVERNMENT Y V E S DEFENSE, TECHNOLOGY E R NATIONAL T COMMERCE, DEPARTMENTS R G LAB E PUBLIC HEALTH (NBS,ONR, Y SYSTEM N ARL's) M M S E N T RE-ENGINEERING OF INNOVATION

Source: Betz (1997)

As a further development of this line process involving a number of of thinking, Figure 4 provides the complex phases: first schematic representation of the Accelerated Radical Innovation 1) information retrieval and paradigm presented in a poster assessment of existing scientific and session paper at the 1st ECI technological knowledge from the Conference on Accelerating the “world system for innovation”, Radical Innovation Process, Charleston, SC, USA, May 2004 2) application of technology push, (Dismukes 2004). Figure 4 further market pull and pattern recognition pictures radical innovation as an criteria for identification of a highly information driven, closed loop promising radical innovation concept,

Dismukes 28 The Industrial Geographer

Figure 4. A Schematic Illustration of a Closed Loop Paradigm for Accelerated Radical Innovation, Driven by Information Technology

3) a disciplined process of innovation This plausible process description management through the stages of includes all of the steps involved in discovery, commercialization and an actual process for diffusion, and commercialization of a successful radical innovation. Considerable 4) the dissemination of new assessment and analysis is typically knowledge as scientific technology conducted during the initial back to the “world system for evaluation of a radical innovation innovation”. concept, leading to its classification as a “discovery”. Numerous recent Clearly this is a selective process as publications have treated this portion indicated by the rejection of radical as the “fuzzy front end” of the innovation concepts as incomplete for innovation process (Koen 2002). The further consideration during Phase 1 “commercialization” portion of the or Phase 2, or as inadequate for innovation, typically an extended and commercialization based on results often iterative investigation lasting from various steps in Phase 3. from years to decades depending on

Dismukes 29 The Industrial Geographer

technical, market, management and 2004, Bers, 2004) subsequent to the societal acceptance factors, may be 1st ECI Conference on Accelerating represented as a sequence of decision the Radical Innovation Process, “gates” and development “stages” Charleston, SC, USA, May 2004. popularized by Robert Cooper This section of the paper extends (Cooper 2001 and 2002A and 2002B) these initial descriptions and as the Stage-Gate-System approach. proposes an information enabled Sustained profitable methodology for accelerating the commercialization of the innovation sequential innovation phases of by one company typically marks the discovery, commercialization and end of the “commercialization” diffusion that addresses many portion of the innovation. requirements for a new innovation Propagation of the innovation ecology proposed by the National geographically and temporally to Innovation Initiative Report, other commercial companies “Innovate America” (NII 2004). comprises the “diffusion” portion of the innovation, that can be Recommendations of the considered to approach completion at National Innovation Initiative demographic market saturation. The diffusion portion might also be The recent task force report, designated the “fuzzy back end” of “Innovate America”, drafted by top the innovation cycle. industrial and academic leaders based on a 15 month study, has The time from Discovery through identified the need for a new 21st Commercialization through Diffusion Century innovation economy focused will obviously differ considerably on talent, the capacity to take risks, depending upon the differentiating and the continuous renewal of an factors identified in Table 2. innovative infrastructure. Reports by Classically this might be identified the National Academy of Engineering with a fraction (e.g. 0.2-0.9) of the and the Task Force for the Future of typical time of 50-60 years for a Innovation have reached similar technology revolution (Table 1) to conclusions. Significant which the radical innovation might characteristics that must be be classified. addressed for industrial and societal competitiveness include that 1) the An Improved Approach to a 21st bar for innovation is rising, 2) Century Innovation Ecology innovation is diffusing at ever- increasing rates, 3) innovation is The initial descriptions of the becoming increasingly principles and vision of the paradigm multidisciplinary and complex, 4) of Accelerated Radical Innovation innovation is becoming more (ARI) for speeding up and improving collaborative requiring cooperation the radical innovation process, were and communication among scientists developed and published (Dismukes, and engineers and between creators

Dismukes 30 The Industrial Geographer

and users, 5) workers and consumers Stokes recently published an are demanding higher levels of enlightened science policy creativity, and 6) innovation is assessment of role of research becoming global in scope with mutual funding at the research university on demands from centers of excellence the development of new knowledge in and from consumers. science and technology (Stokes 1997). In his monograph, “Pasteur’s The report further concludes that the Quadrant”, Stokes for the first time innovation economy differs provided a generic, rational fundamentally from the industrial or distinction between applied research even the information economy, and and basic research, and further that it will require a new relationship categorized basic research depending among companies, government, upon motivation for new knowledge educators and workers to assure or upon search for useful creation of an effective innovation applications. Figure 5 presents an ecosystem that can successfully expanded version of Stokes’ four- adapt and compete in the global quadrant model in a format that economy. As during the 1970s and enables clear visualization of the 1980s, when the United States faced dynamic, operational relations of a similar challenge in manufacturing these four research quadrants to the from Japan, new innovation innovation cycle comprising scientific methodologies and management tools discovery, technology are now required to catalyze the commercialization, and diffusion of transition from a nationally oriented technology and new knowledge. to a globally oriented economy. This expanded model enables both The next section describes a dual academic researchers and industry conceptual framework required as a technology and business managers to basis for building an effective visualize a collaborative innovation operational roadmap for an ecology, in which academic information driven innovation researchers will no longer be ecology. The first is a unifying threatened by the fact that basic description of the relation between research can lead to useful scientific discovery, useful technology applications, and in which business development, and commercialization. managers will recognize that basic The second is a generic research can play a dual role in representation of the grand providing useful applications as well challenges and hurdles that must be as new knowledge. This model is the overcome to achieve Accelerated first portion of the required dual Radical Innovation. conceptual framework required for building an effective roadmap. A Conceptual Roadmap For Building a 21st Century Innovation Ecology

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Figure 5. A Dynamic Stokes Quadrant Model of Scientific Research Connecting Basic Research With Technology Development Leading To Accelerated Radical Innovation

Dynamic Stokes Quadrant Model

For Scientific Technology

Basic Research ⇒ Technology De velopment ⇒ Innovation

Search For Useful Applications

No Ye s Profitable Sea rch IARI Commercialization 50Yr Horizon 15Yr H orizon Pure Use-Ins pired IARI Yes Basic Research Basic Research (Bohr Quadrant) (Pasteur Quadrant ) Fo r 3Yr Horizon

Accelerated IARI Radical

Innovation New Accidental 5Yr Horizon No Discovery Pure

(Serendipity Applied Research IARI Quadrant) (Edison Quadrant) Knowledge Profitable Commercialization

The problematic characteristics of the interaction of the many complex 21st Century Innovation Ecology factors listed in Table II that govern discussed in Section 3.1 constitute a the dynamics of innovation, synergistically related set of grand including: 1) technology, 2) scope of challenges and operational hurdles product, process or service, 3) time, 4) that must be envisioned, addressed, size or company or organization, 5) and overcome by any truly effective, industry, 6) supply chain or value operational roadmap to Accelerated chain, 7) market and customers, 8) Radical Innovation. For simplicity, organizational structure and culture. Figure 6 groups these inter-related grand challenges into three This complexity suggests that any categories: I) Scientific and effective roadmap to an innovation Technological Challenges, II) ecology must combine a generic Business and Organizational framework with an approach tailored Challenges, III) Market and Societal to the particular innovation. Since at Challenges. Various hurdles will be present no “Ohm’s Law” is envisioned encountered depending upon the that will simplistically describe all

Dismukes 32 The Industrial Geographer

Figure 6. The synergistic interaction of the grand challenges and associated hurdles that must be overcome to achieve Accelerated Radical Innovation. The three linked grand challenges are: I) Scientific and Technological Challenges, II) Business and Organizational Challenges, III) Market and Societal Challenges.

innovations in the 21st Century methodology based on the innovation ecology, development of a technologies of thinking (Betz 1997) comprehensive theory and model as an important component of a 21st must be the subject of further Century innovation ecology (NII, research. 2004). Due to the complexity of the innovation process (Age 1995), An Operational Methodology For numerous models proposed for the a 21st Century Innovation innovation cycle have proved Ecology inadequate. A decade after this assessment, the situation still The historical assessment and remains the same, that successive current status of the field of models proposed as generally technological innovation supports applicable to the innovation process the need for a new operational still have limitations (Porter 2005).

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This is particularly true of the “linear Price 1984, Probert 1999, Quinn 1996 model” that originated after World and 1997, Stratton 2003, Wymbs War II based on Vannevar Bush’s 2004, Willyard 1987) that can be paradigm of “science the endless applied by an innovation team at frontier” (Bush 1946). That model various milestone points in the assumes a successful sequence of innovation. These are: activities such as those made popular ƒ Information Assessment, as a Stage-Gate System (Cooper 2001 ƒ Pattern Recognition, and 2002 A and 2002 B). The best ƒ Innovation Management, and current guideline for radical ƒ New Knowledge Generation. innovation, based on the extraction of best practices from historical case As indicated in the outer “influence studies (Leifer 2000), however, does circle” in Figure 7, environmental, not provide a predictive model. societal, and economic factors exert both long term and near term The new methodology proposed in guidance on innovation strategy and this paper adopts three guiding operations, reflecting up to date real principles: time consumer viewpoints. Industry driven research, development and 1) identification, creation and innovation activities in the cycle of application of the best possible discovery, commercialization, and management techniques for diffusion, aided by academic research accelerating radical innovation in a and governmental policy inputs, real world industrial environment provide the engine of the overall innovation system. 2) adaptive real-time integration of the best information technology Based on experience in the software tools for pursuit of electronics and petrochemical accelerated radical innovation, industry over a 30-year period, the author proposes an adaptive 3) continuous adaptive innovation template, Figure 8, that improvement of management can be applied at any individual step techniques to address the or sequentially at each step of the acceleration of each sub-step of the overall innovation cycle, Figure 7. innovation process . In spite of the frequent criticism of This model incorporates a world view the linear Stage-Gate-System model (Figure 7) of the innovation cycle that it is linear and unrealistic, a (discovery, commercialization, number of studies (Walton 1989, diffusion) that envisions the use of Cohen 1998) have recognized that four key information and this type of model comprises an telecommunications tool suites (e.g. iterative sequence of independent Boer 2002, Cios 1998, Kostoff 1999 operations (i.e. launch decision + unit and 2004, Porter 1985, Porter 2005, innovation operation + go/no-go

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Figure 7. A conceptual “adaptive and self-renewing radical innovation system model” driven by “technologies of thinking”. In this model, industrial activities supported by academic research and governmental policy and funding inputs, provide the operational driver of the overall innovation system comprising the sequential phases of discovery, commercialization and diffusion. Societal, economic and environmental requirements exert a strong influence on the selection and success of specific industrial innovation activities. In this operational model, strategic application of computer science and telecommunication tools is the catalyst resulting in dramatic improvement in the effectiveness of each phase of the overall innovation cycle. The key assessment methodologies include: a) Information Assessment, b) Pattern Recognition, c) Innovation Management, and d) “New Knowledge Generation”.

decision) with periodic interruptions array sequence, the iterative model or termination possible. Although proposed here truly envisions real superficially similar to the Stage- time input and assessment, and Gate-System models (Cooper 2001) recording of activities, information simplistically laid out in a linear

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Figure 8. Conceptual description of the key adaptive building block process for an operational innovation methodology involving pursuit of an innovation goal involving iterative conduct of innovation phases punctuated by milestone decision points.

ADAPTIVE INNOVATION TEMPLATE (Launch Decision + ACTIVITY + Go/No-Go Decision) Conceptual Framework

Select

Launch Go/No Go Decision Decision

Unit Input Innovation Output Operation

Real World Research Application

Dismukes 36 improved and effective operational and decisions in a data mining methodology. The first strategy system (Cios 1998) retained for begins with is a rigorous initial future instant retrieval and review. assessment of discoveries and their Therefore the innovation activities of potential (Walton 1989) as the iterative model may be innovations, and a systematic considered as a commercial or screening and selection at the start of industrial equivalent of the military the innovation cycle, rather than at special forces operations involving a the end of the innovation cycle, as focused team of specialists in real- conducted in the classical funnel time communication, dedicated to a model (Chesbrough, 2003). Reduced specific well defined task. Hence the overall operating costs of a company’s iterative model should be capable of R&D operation achieved by focusing improved 10X performance compared on fewer, higher potential value to baseline activities using innovations should more than offset conventional techniques. Referring the costs of a higher intensity, to the dynamic stokes quadrant information enhanced, real-time model in Figure 5, this chart approach to the highest priority projects. Reduced time and higher illustrates the possibility based on success rate should also be obtained Accelerated Radical Innovation to by focusing on the highest value reduce the time for profitable potential innovations. commercialization from 50 years ⇒ 15 years ⇒ 5 years ⇒ 3 years. Such The second strategy proposed in an achievement, if experimentally launching information Accelerated verified, would bring the particular Radical Innovation as the operational radical innovation into view on the model for a 21st Century innovation typical radar screen of business ecology involves adoption of a executives faced with quarterly and methodology successfully employed yearly profitability demands of for total reorientation of R&D focus stockholders and the investment by a major petrochemical company community. during the early 1990s (Eidt 1995). This approach, here given the name As a final justification in this Activity Based Roadmapping, is in proposal for information Accelerated effect the development of a long Radical Innovation (ARI) as the range business model based on an operational model required for a 21st interactive assessment and Century innovation ecology, the prioritization of: issues of risk, cost and acceptable ƒ long range business success rate of profitable opportunities and associated grand commercialization need to be challenges (Figure 6) considered. Two strategies are ƒ technologies needed as core proposed to address these obvious technologies for success requirements for a dramatically

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ƒ technological hurdles that the ARI paradigm has the potential must be overcome for success to overcome technological, ƒ scientific and engineering organizational and societal research required to overcome the challenges and hurdles, thereby hurdles achieving a factor of 10X ƒ a flexible, interdisciplinary improvement in radical innovation and cross functional plan with effectiveness. predetermined goals Further development and validation Though superficially similar to the of this proposed new paradigm is classical case-study based radical envisioned through a collaborative innovation methodology, in reality it multi-university program of research is radically different, since it involves and teaching, in collaboration with a generic system approach to a selected industrial partners to business model incorporating a identify specific methodologies sequential assessment and targeting appropriate for specific company of core technologies, without regard structure and industry goals. to a specific organizational structure Successful implementation will or business hub (Leifer 2000). The contribute significantly to the new methodology can be applied at proposed activities required for a 21st any step of the innovation process, Century innovation ecology, including new venture activities, new envisioned by the National attempts at an overall radical Innovation Initiative report, innovation, and new attempts at “Innovate America”. getting an existing radical innovation process back on target. Acknowledgements: The author thanks the College of Conclusion Engineering and the University of This paper first reviews the course of Toledo for support of innovation technology from its empirical base in initiatives providing the basis for this antiquity through the initial paper, namely, The ECI Conference scientific technology era of the 19th on Accelerating the Radical and 20th Centuries, to the 21st Innovation Process, Charleston, SCI, Century environment of Accelerated May 2004, and the International Radical Innovation governed by Workshop on Accelerated Radical technologies of thinking. It then Innovation, Toledo, Ohio, March assesses the need for and benefits 2005. The author also acknowledges from a new information technology colleagues at Pilkington PLC, enabled paradigm of Accelerated Regional Growth Partnership of Radical Innovation (ARI). By Northwest Ohio, Bowling Green combining advanced information State University, University of technology tools and innovation Cincinnati, University of Detroit management techniques in a real- Mercy, Vanderbilt University and time decision-making environment, Michael Gallis and Associates for

Dismukes 38 The Industrial Geographer ongoing collaboration and Bush, Vannevar, 1946, Science – The encouragement in the pursuit of Endless Frontier: A Report to the President on a Program for Postwar Scientific accelerated radical innovation, Research, Reviewed in SCIENCE and through the formation of the TECHNOLOGY POLICY YEARBOOK 1994, International Accelerated Radical AAAS, Washington DC, 1994. Innovation Institute (IARII)© and the Ohio-Great Lakes-Tennessee Carlsson, Bo, Jacobsson, Staffan, Holmen, Magnus, and Rickne, Annika, 2002, Valley Innovation Zone Center. Innovation Systems: Analyutical and Methodological Issues, Research Policy Vol. References 31, Issue 2, February, 233-245.

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Dismukes 42 Continuing Business as Usual: A Case Study of Hialeah, Florida

Sandy D. Alvarez Department of Sociology/Anthropology Shippensburg University Shippensburg, Pennsylvania

Rhonda Vickery Impink Department of Social Work Indiana State University Terre Haute, Indiana

Keywords: Latinas, Cuban immigrants, gender, spatial distribution, ethnic enclave, globalization

INTRODUCTION

This article poses research questions services, nursing homes for elderly about the issue of spatial distribution relatives, and the lack of public of immigrant women in urban transportation between residential environments and the impact of areas and the location of better paying occupational segregation issues based jobs often in suburban areas. on gender and race that is exacerbated Commuting time is a significant factor by economic globalization. That is, because women strive to be close to how has the relationship between their residences in order to balance more recent émigrés and those of the their employment and family past industrial expansion period responsibilities. changed? A case study is provided HISTORICAL CONTEXT exploring the experiences of recently immigrated women from Cuba within Migration streams from Europe in the the ethnic communities of Hialeah, late 1800’s and early 1900’s included Florida. How have they been absorbed migrants who worked long hours in into the employment sector of this negative and often hazardous working community? conditions to pave the way for an improved situation for their children. Recent Cuban émigrés, as well as low- With employment opportunities income women across the nation, are available in textiles and experiencing a similar “spatial manufacturing, the absorption of mismatch” (Queralt and Witte 1998 p. immigrants into the employment 455; Waldinger 1996 p. 35) between sector was swift. Tenement housing the availability of jobs with adequate developed in urban areas within close wages (usually in suburban areas) and proximity to major urban centers. As the areas where they reside (Allen and immigrants learned social skills and Kirby 2000). Complicating that factor were assimilated into their is the spatial distribution of child care environment they moved from the

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lowest paying jobs to more skilled are made for newcomers to take the employment that increased wages, place of their co-ethnic counterparts and improved housing options. who have moved on to other Immigrants continue to take the place employment. Waldinger (1996) of those who follow the track of referred to the economy in these areas upward mobility. However, “the social that created a “virtuous circle” (p. 42) ladder no longer works, or no longer because the new immigrants who works with similar force" (Waldinger, replaced earlier ones can be easily 1996, p. 40) due to global economic exploited as fluctuations in the realities as well as differences between economy or production needs occur. immigrant groups.

Moreover, advances in mass transit However, this pattern is being altered and the use of automobiles have due to the need for small widened the distance between manufacturers such as those in residences and places of employment Hialeah to utilize low wages to remain providing more options for workers. As competitive within a global economy the country developed there were and avoid moving their operations out eventually areas that became of the country. This metropolitan area industrial development centers or represents one of the top 25 areas districts (Sorenson 2003; Stafford noted across the country with 2003). This occurred even when the expanding economies (Workforce concept of efficiency was not consistent Weekly 2004). with the pattern due to the reliance on “social networks” or the concept of “social proximity” (Sorenson 2003 p. However, despite the positive business 515). This research note reviews the climate the impact of globalization is issue of the use of female immigrant causing a significant change from labor in the manufacturing sector in a prior social mobility patterns. Hiring global economy. This subject requires recent immigrants with limited additional attention within the English proficiency is advantageous industrial geographical literature. because it provides inexpensive laborers who are vulnerable to SPATIAL DISTRIBUTION, exploitation because of the cultural GLOBALIZATION AND THE sense of belonging within the ethnic SLOW-DOWN OF UPWARD enclave. The abundant immigrant MOBILITY labor pool creates competition for employment between recent This social connection is pivotal when immigrants and the immigrants who examining the spatial distribution of have been in the country for a longer populations in urban centers based on time period as well as the native the development of “ethnic niches” population. The net effects include (Waldinger 1996 p. 4). Within these greater fluctuations in employment, ethnic enclaves informal connections lower wages, and longer work hours. For relatively recent Cuban émigrés,

Alvarez & Impink 44 The Industrial Geographer

there is also competition with Gilbertson’s (1995) analysis of immigrants from Central America, the immigrants working within an enclave Caribbean, native whites and African economy points to another aspect of Americans (Zsembik 2000). Previous the labor market experiences many immigrants did not have to consider immigrants have; co-ethnic possible economic competition from exploitation in ethnic enclave their homeland because economies. This is consistent with the manufacturing plants could be findings of Nee, Sanders and Sernau relocated to these locales to reduce (1994), who posit that there exists an labor costs and stay competitive. inherently exploitative relationship between the co-ethnic worker and

their co-ethnic employer based upon IMMIGRANTS, GENDER, the need to have a readily accessible GEOGRAPHIC DISTRIBUTION and abundant low wage labor pool. AND THE LABOR MARKET Although Sanders and Nee (1987) did not focus on women, Gilbertson (1995) Prior research exploring immigrant does. She contends that women participation in the labor market has within the enclave are more likely to focused on the wage gaps without be exploited due to discrimination, examining the social context. occupational segregation and Personal choices to work within or work/family conflicts that reduce outside the enclave are often complex wages and include a more narrow and relate specifically to gender. range of opportunities for women than Recent Latino émigrés are more likely men. For example, Zhou and Logan to be economically disadvantaged (1989) contend that Chinese women within the labor market due to lower workers in New York City had no levels of education and lower labor measurable earnings return on their force participation levels. Yet the previously attained human capital. increased presence in the labor market Their participation within the enclave can bolster the family’s economic economy was based not only on the resources enough to alleviate poverty income they provide to support their among immigrant families (Greenlees family’s needs because they also had and Saenz 1999; Bean, Leach and to consider how their paid work would Lowell 2004). Greenlees and Saenz affect child care and other family (1999) suggest a model for examining responsibilities. Consequently, the role of immigrants in the labor although wages outside the enclave market. Their theoretical model were generally higher, those jobs often suggests that “women’s employment is did not provide the hours and influenced by their personal flexibility found with enclave (individual level) capital resources, employment (Zhou and Logan 1989). household budgetary requirements Enchautequi (2002) referred to job (for individual married couples) that networks based on gender that affect decisions for home or work produces “labor market segmentation production, and employment opportunities available” (p. 2).

Alvarez & Impink 45 The Industrial Geographer

according to recency of arrival” (p. for new immigrants the ability to 594). obtain governmental assistance is not possible (U.S Department of Health Females within the co-ethnic and Human Services, 2005, para. 2). workplaces seek employment close to the enclave in order to reduce their Low-wage workers of any race or commuting time and because they ethnic group rely on public share a common language and culture transportation and are often limited in (Logan and Zhou, 1989; Ellis, Wright, their commuting time by familial and Parks 2004). A Catalyst (2003) responsibilities. As women seek jobs report identified the challenge of they often find “precarious positions in employers not recognizing Latinas the workforce” (Allen and Kirby 2000 definition of “family” (p. 2). This p. 7). Communities need to address factor reduces opportunities for this economic and social challenge by advancement because work increasing the use of global responsibilities are viewed as information systems (GIS) to plot temporary until their husbands can current commuting patterns with find jobs with higher pay. Therefore, public transit routes, child-care the need to balance their jobs with centers, nursing homes and areas their family responsibilities is where employment will provide higher paramount for them (Portes and wages and more stability (Queralt and Stepick 1993). Care of children, Witte 1998 p. 455). elderly family members (Kolb 2000) and the desire to focus on the needs of CASE STUDY: HIALEAH, their husbands, referred to as FLORIDA machismo (Mayo and Resnick 1996) requires that they take employment With a population of 226,419, Hialeah that is close to their homes and with represents an important economic the shortest transit time on public base for Miami-Dade County (U.S. transportation (Allen and Kirby 2000). Census 2003). Over 90% of Hialeah This limits their accessibility to higher residents , self describe as Latino, the paying jobs that could lead to more majority are Cuban and Cuban responsibility in suburban or other American. More women reside in employment areas that would be Hialeah than men. The median farther away. This balancing of home household income is lower than the and family and employment demands national average at $29,492 compared is increasingly common to most to $41,994 (U.S. Census Bureau, 2003, females in America due to the need for Summary File 1 (SF 1) and Summary two incomes to access or maintain a File 3 (SF 3)). Their average travel middle class existence. Compounding time to work is 27.4 minutes slightly this issue is the decreasing ability to longer than the national average. This receive governmental assistance when time would increase if workers would females find themselves raising look to other regions of the county for children as single-parents. Moreover, employment opportunities.

Alvarez & Impink 46 The Industrial Geographer

Figure #1 Travel Time

Source: US Census (2000)

Adjacent to the middle and working increases and the insecurity of leaving class neighborhoods of Hialeah are the predominantly Spanish speaking manufacturing plants that produce community is perceived as more of a and assemble a variety of goods from risk. reading glasses and textiles to plastic novelty items. Recently immigrated An example of one manufacturer in Cuban women provide much of the the city of Hialeah is that of a plant needed labor. They have limited that produces and manufactures language skills and look to the inexpensive reading glasses costing factories for employment that is close $7.99 to $12.99, more than an hour’s to their ethnic enclaves. In Hialeah, wages for the entry-level employee of the small factories are conveniently $6.50. Women primarily run the located near the Miami-Dade Counties machines, assembling and polishing public transportation bus routes. the glasses. Personal semi-interviews were conducted with 10 Latinas who The relationship between the recently migrated from Cuba and are immigrants and factories that hire married with children and work them was explored to determine if within Hialeah. Additionally, five (5) employment in these factories personal interviews were conducted of provides sufficient benefits for the supervisors and management of the immigrants? The alternative is to factories. Women such as Juanita (not travel from Hialeah to the city of her real name) polish glasses and Miami where their travel time place them on the line to the next

Alvarez & Impink 47 The Industrial Geographer

worker for packaging. Her view of her outlook while still retaining the employment is positive. traditional family responsibilities that could be diminished if they would seek Juanita: I am raising two children employment farther from the enclave. with this job. My husband’s Close proximity to the workplace that employment is not enough. I am does not require lengthy commutes luckier than most. appears to offset lower wages since the Latinas value being close to home. Juanita’s male supervisor Thus, the issue of short commuting explains,” We would like to pay distances, access to cars and the higher wages but that would be availability of public transportation difficult in this economy. We are are key factors that require further competing with cheaper wages from study in additional to the more China and are always looking for obvious language challenges that ways to cut production costs.” could appear to restrict Latinas to manufacturing jobs that exploit them. This supervisor also stated that “we hire people who are willing to work at Future research on this topic should the wages we can afford to pay. Here be explored including how the use of that means new Latinos. We are a GIS’s can be more fully utilized when business and that means we have to planning for public transportation make money. We are no different corridors as well as the location of low- than other businesses here. We do cost housing and child-care centers. what we have to do to stay in Spatial distribution of public resources business”. (Personal Interview) also needs to be explored as the effects of globalization are studied to CONCLUSION determine if the tide of immigration will continue or possibly increase. Manufacturers in Hialeah, look to Current and projected U.S. Census recent immigrants as an alternative to data indicate that immigration from relocating their factories off shore and the Caribbean Basin and Latin as an inexpensive alternative to the America will continue as economic and more expensive Anglo or African political push-pull factors create better American laborer because they will opportunities for employment and work for the minimum wage with few political liberties that are not present benefits. The continued migration to in the immigrants’ homeland. Urban the Hialeah area suggests that finding centers with strong cultural bases enough laborers will not be difficult for such as Hialeah highlight the foreseeable future. As immigrant globalization processes where women weigh the costs and benefits of immigrants in their new host the factory work they are likely to community are able to access have different priorities. Their culturally defined goods and services priorities include a focus on earning and experience few cultural money to help the family’s financial impediments such as language and

Alvarez & Impink 48 The Industrial Geographer different social skills. Ironically, Nee, V., Sanders, J. & Sernau, S. 1994. Job however, if they work in Transitions in an Immigrant Metropolis: Ethnic Boundaries and the Mixed Economy. manufacturing positions they run a American Sociological Review 59:849-872. risk not encountered by prior immigrants and that is the threat of Queralt, M. & Witte, A. 1998. A Map for You? their job going to the land that they Geographic Information Systems in the Social just left. Services. Social Work 43: 455–469.

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Alvarez & Impink 49 Selected Papers in Industrial Geography, 2003-2004* Sources: Area, Annals of the AAG, Economic Development Quarterly, Economic Geography, Growth & Change, Journal of Economic Geography, Professional Geographer, & Southeastern Geographer

Adkisson, R. & Zimmerman, L. Brodsky, H. 2003. Retail Area 2004. Retail Trade on the U.S.- Overlap: A Case in Forensic Mexico Border During the NAFTA Geography. The Professional Implementation Era. Growth and Geographer 55:119-302. Change 35:77-89. Bode, E. 2004. The spatial pattern Alderman, D. 2003. Street names of localized R&D spillovers: an and the scaling of memory: the empirical investigation for politics of commemorating Martin Germany. Journal of Economic Luther King, Jr within the African Geography 4:43-64. American community. Area 35:163- 173. Bonnett, A. 2003. Geography as the world discipline: connecting Anstine, J. 2003. Property Values popular and academic geographical in a Low Populated Area when imaginations. Area 35: 55-63. Dual Noxious Facilities are Present. Growth & Change 34:345- Clark, G. & Wójcik, D. 2003. An 358. Economic Geography of Global Finance: Ownership Concentration Bathelt, H. & Glückler, J. 2003. and Stock-Price Volatility in Toward a relational economic German Firms and Regions. geography. Journal of Economic Annals of the Association of Geography 3:117-144. American Geographers 93:900-924.

Bee, E. 2003. Knowledge Networks Colgan, C. & Baker, C. 2003. A and Technical Invention in Framework for Assessing Cluster America's Metropolitan Areas: A Development. Economic Paradigm for High-Technology Development Quarterly 17:352-366. Economic Development. Economic Development Quarterly 17: 115- Crozet, M. 2004. Do migrants 131. follow market potentials? An estimation of a new economic Brade, I. & Rudolph, R. 2004. geography model. Journal of Moscow, the global city? The Economic Geography 4: 439-458. position of the Russian capital within the European system of metropolitan areas. Area 36:69-80.

1 Essletzbichler, J. 2004. The Grubesic, T. & Murray, A. 2004. Geography of Job Creation and Waiting for Broadband: Local Destruction in the U.S. Competition and the Spatial Manufacturing Sector, 1967-1997. Distribution of Advanced Annals of the Association of Telecommunication Services in the American Geographers 94:602-619. United States. Growth & Change 35:139-165. Faulconbridge, J. London and Frankfurt in Europe's evolving Gunton, T. 2003. Natural financial centre network . Area Resources and Regional 36:235-244. Development: An Assessment of Dependency and Comparative Feldman, M. & Francis, J. 2004. Advantage Paradigms. Economic Homegrown Solutions: Fostering Geography 79:7-90. Cluster Formation. Economic Development Quarterly 18:127-137. Halbert, L. 2004. The Decentralization of Intra- Friedman, M. & Mason, D. 2004. A metropolitan Business Services in Stakeholder approach to the Paris Region: Patterns, Understanding Economic Interpretation, Consequences. Development Decision Making: Economic Geography 80:381. Public Subsidies for Professional Sport Facilities. Economic Hansen, S.., Ban, C. & L. Huggins. Development Quarterly 18: 236- 2003. Explaining the "Brain Drain" 254. from Older Industrial Cities: The Pittsburgh Region. Economic Graves, S. 2003. Landscapes of Development Quarterly 17: 132- Predation, Landscapes of Neglect: 147. A Location Analysis of Payday Lenders and Banks. Professional Haylick, D. & Kirsch, S. 2004. A Geographer 55:303-314. Production Utopia? RTP and the North Carolina Research Triangle. Greenbaum, R. 2004. Siting it Southeastern Geographer 44 (2). Right: Do States Target Economic Distress When Designating Holmes. T. & Stevens, J. 2004. Enterprise Zones? Economic Geographic concentration and Development Quarterly 18:67-80. establishment size: analysis in an alternative economic geography model. Journal of Economic Geography 4: 227-250.

51 Howland, M. 2004. The Role of Mansfield, B. 2004. Rules of Contamination in Central City Privatization: Contradictions in Industrial Decline. Economic Neoliberal Regulation of North Development Quarterly 18: 207- Pacific Fisheries. Annals of the 219. Association of American Geographers 94:565-584. Ioannides, Y. & Overman, H. 2004. Spatial evolution of the US urban McMillen, D. 2003. Neighborhood system. Journal of Economic house price indexes in Chicago: a Geography 4: 131-156. Fourier repeat sales approach. Journal of Economic Geography 3: Keylock, C. & Dorling, D. 2004. 57-73. What kind of quantitative methods for what kind of Geography? Area McSweeney, K. 2004. The Dugout 36:358-366. Canoe Trade in Central America's Mosquitia: Approaching Rural Knutsen, H. 2004. Industrial Livelihoods Through Systems of development in buyer-driven Exchange. Annals of the networks: the garment industry in Association of American Vietnam and Sri Lanka. Journal of Geographers 94:438-661. Economic Geography 4: 545-564. Norcliffe, G. & Rendace, O. 2003. Lee, Yong-Sook. 2003. Lean New Geographies of Comic Book Production Systems, Labor Unions, Production in North America: The and Greenfield Locations of the New Artisan, Distancing, and the Korean New Auto Assembly Plants Periodic Social Economy. Economic and Their Suppliers. Economic Geography 79 (3), 241-264. Geography 79 (3), 321-340. O’Neill, P. 2003. Global city- Lucas, S. 2004. The Images Used to regions: trends, theory, policy. Area "Sell" and Represent Retirement 35:326. Communities. Professional Geographer 56:449-459. Pantulu, J. & Poon, J. 2003. Foreign direct investment and Malecki, E. & Boush, C. 2003. international trade: evidence from Telecommunications Infrastructure the US and Japan. Journal of in the Southeastern United States: Economic Geography 3:241-259. Urban and Rural Variation. Growth and Change 34:109-129. Park, Bae-Gyoon. 2003. Politics of Scale and the Globalization of the South Korean Automobile Industry. Economic Geography 79:173-194.

52 Phelps, N. & Waley P. 2004. Tokatli, N. & Kizilgün, Ö. 2004. Capital Versus the Districts: A Upgrading in the Global Clothing Tale of One Multinational Industry: Mavi Jeans and the Company's Attempt to Disembed Transformation of a Turkish Firm Itself. Economic Geography 80:191- from Full-Package to Brand-Name 216. Manufacturing and Retailing. Economic Geography 80:221. Pinch, S., Henry, N., Jenkins, M., & S. Tallman. 2003. From Torau, M. & Goss, E. 2004. The ‘industrial districts’ to ‘knowledge Effects of Foreign Capital on State clusters’: a model of knowledge Economic Growth. Economic dissemination and competitive Development Quarterly 18:255-268. advantage in industrial agglomerations. Journal of Tracey, P. & Clark, G. 2003. Economic Geography 3: 373-388. Alliances, Networks and Competitive Strategy: Rethinking Raco, M. 2004.Governing from Clusters of Innovation. Growth and below: Urban regions and the Change 34:1-16. global economy. Area 36:89-91. Ward, K. 2003. Entrepreneurial Reese, L. & Fasenfest, D. 2003. urbanism, state restructuring and Planning for Development: An civilizing 'New' East Manchester. Assessment of the Economic Area 35:116. Development District Planning Process. Economic Development Wheeler, C. 2004. Wage inequality Quarterly 17: 264-279. and urban density. Journal of Economic Geography 4: 421-437. Sadler, D. & Fagan, B. 2004. Australian Trade Unions and the Zhou, Y. & Xin, T. 2003. An Politics of Scale: Reconstructing Innovative Region in China: the Spatiality of Industrial Interaction Between Multinational Relations. Economic Geography 80: Corporations and Local Firms in a 23-44. High-Tech Cluster in Beijing. Economic Geography 79:129-152. Suarez-Villa, L. 2003. The E- economy and the Rise of Techno- *Compiled by E. LaFary capitalism: Networks, Firms, and Transportation. Growth & Change 34:390-414.

53

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