"Labour, Globalisation and The New Economy" - rldwl
"Labour, Globalisation and The New Economy" - rldwl
"Labour, Globalisation and The New Economy" - rldwl
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Workshops 3 & 5<br />
<strong>The</strong> Role of institutions in the process of local <strong>and</strong> regional development<br />
& Building an Early Warning Business Development Network<br />
Chairmen: Rainer Zoll & Dan Swinney<br />
That institutions matter is not the question. But how do they implement their role?<br />
<strong>The</strong> renewed interest for the praxis, structure <strong>and</strong> problems of institutions leads us to pose the question of the<br />
relationship between local <strong>and</strong> regional development <strong>and</strong> all sorts of institutions, mainly intermediate<br />
institutions <strong>and</strong> institutions which refer to labour in some way. What is the role institutions play in these<br />
processes? It is obvious that institutions can contribute in positive or in negative ways to local <strong>and</strong> regional<br />
development. <strong>The</strong> question is only the quality of the intervention.<br />
So the first step is the description of such events, of such interventions in order to discover the factors that<br />
hinder or favour development. <strong>The</strong> next step is still partly descriptive, partly analytical: who are the involved<br />
institutions, what is their character, what are their aims, their structures, even some historical hints can be<br />
helpful; to know about their strategies for action, their social composition, the role of different actors<br />
involved <strong>and</strong> so on.<br />
<strong>The</strong> third step is of course underst<strong>and</strong>ing. <strong>The</strong> hermeneutic task is to try to discover why <strong>and</strong> how some<br />
institutions play a positive role in development, intervene in creative <strong>and</strong> innovative ways <strong>and</strong> others not or<br />
worse, hinder development. This third step is not forcibly the task of the contributors in their papers. Of<br />
course there will be some tentative of underst<strong>and</strong>ing in the contributions - it is always difficult to retain<br />
oneself. But the main task of the workshop ( <strong>and</strong> perhaps of consecutive workshops ) should be just this ( <strong>and</strong><br />
not the presentation of the papers ): A collective hermeneutic effort should try to find out what are the factors<br />
in institutions that foster innovation <strong>and</strong> creativity <strong>and</strong> what are the factors that hinder them. So what is asked<br />
for from the contributions is a thorough description of the role of institutions in processes of local <strong>and</strong><br />
regional development.<br />
A major focus of the Center for Labor <strong>and</strong> Community Research (CLCR) has been the retention of industrial<br />
jobs. We are typically called by unions, community organizations or city government when a company has<br />
announced its plans to close. We have analyzed hundreds of manufacturing companies, <strong>and</strong> developed a<br />
variety of strategies to save companies <strong>and</strong> jobs over the last twenty years. We have found some companies<br />
that needed to close because their product or processes were antiquated. On the other h<strong>and</strong>, we found most<br />
companies fell victim to a narrow or ineffective business strategy, or a strategy that had other objectives than<br />
sustaining production in a particular site. It was not the “market”or “global competition” or some<br />
insurmountable problem that placed the company in a crisisBbut a problem that could be solved by labor,<br />
business, <strong>and</strong> government. For example, in a Chicago study of 800 small companies, we found that 40% of<br />
these companies were at risk only because of succession in ownership problemBa problem that could be<br />
solved through identifying a local entrepreneur or perhaps an employee buyout. We also found many larger<br />
companies closing or moving because of narrow, ineffective, or destructive business strategies such as<br />
“milking the cash cow” or a number of strategies that we call “Low Road”. <strong>The</strong>se strategies can be<br />
effectively challenged.<br />
In Chicago, 3,000 out of 7,000 factories closed in the 1980s resulting in a loss of 150,000 basic<br />
manufacturing jobs. This dramatic “de-industrialization” happened in all major US cities <strong>and</strong> was the<br />
foundation for character of US urban poverty. Based on our experience <strong>and</strong> research, we are confident that<br />
75% of these companies <strong>and</strong> jobs could have been saved had labor, business, <strong>and</strong> local government been<br />
more creative, determined <strong>and</strong> responsible. Early Warning Networks are an essential first step in retention.<br />
<strong>The</strong> key factor to save these companies is the availability of timely <strong>and</strong> accurate information. An Early<br />
Warning Business Development Network gathers information on companies through extensive research <strong>and</strong><br />
from its members’ first-h<strong>and</strong> knowledge. <strong>The</strong>se networks typically are a coalition involving the labor<br />
movement, local government, community-based organizations, local businesses <strong>and</strong> business organizations,<br />
civic organizations, churches <strong>and</strong> others. This Network can gather <strong>and</strong> organize information about a<br />
community’s existing businesses with sufficient lead time to identify those companies at risk of moving or<br />
9 - 14 May 2002