Information Technology, the Organization of Production, and Regional Development

Abstract

Information technology (IT) was conventionally viewed as a process that affects the spatial organization of production significantly yet has little impact on technical and managerial structures. Specifically, IT was said to encourage decentralization and centralization in space because the new infrastructure, ‘the electronic superhighway’, both compresses space and reduces turnover time. Regional policymakers were then advised to design measures to enhance the decentralizing effect of IT. Only recently has attention been directed toward the impact of IT on industrial processes. However, such contributions remain limited because of their view of IT as a process phenomenon. We argue that IT is better viewed as a process and as a productive force and that from this perspective its impact is not limited to spatial organization of industries as it also alters production methods. Beginning with this understanding of IT, we have identified and presented two emerging technospatial tendencies, namely, integration and disintegration. Whereas decentralization disengages production stages from a centralized hub of productive activity, disintegration actually alters a centralized production hub into new fragments, each of which incorporates every necessary production stage to create a comprehensive and self-sufficient structure. Likewise, whereas centralization simply collects production stages together, integration restructures groups of production stages into a new whole and leads to comprehensive resource-sharing among diverse industries. The implications of this new formulation for regional development policy are far-reaching. There are also ramifications for the existing theory of new international division of labor, a subject that is not treated in this paper. Regional planners will need to restructure ‘innovation techniques’ specifically to accommodate disintegrated firms and to design policies that correlate with the industrial objective of competitive advantage. The most significant ingredients in this process are the establishment of an intelligent network, high-quality labor training, and support of productivity strategies designed to meet the needs of firms in the 1990s. Policymakers must also introduce regulations to promote universal access to IT and prevent integrated firms from becoming oligopolies, including the creation of countervailing local forces.