ABSTRACT
The locational considerations involved when employment decline takes place through investment and technical change are far more complex than in cases of intensification. For one thing, technical change, by definition, always involves taking a positive decision about the location of the new production process. The nature of that decision will depend on the level of output change, on the difference between the locational requirements of the old and new production processes, and on changes in the spatial surface (the available locational possibilities) since the old production process was established. When new technical processes are introduced in a context of output growth, it may be that they are embodied entirely in additional capacity, with all existing production remaining unchanged (or anyway being subject only to small-scale changes). A location decision will therefore, obviously, have to be made about this additional capacity. With static output new production processes will replace old, in order to maintain the same overall capacity levels. In this case, both a positive location decision about the new capacity, and a decision about which existing capacity to scrap, will be involved. The latter is likely to involve the kinds of considerations already indicated under the discussion of rationalization in chapter 7. The positive location decision will also probably entail consideration of whether or not the replacement capacity will be installed on the same site as the capacity which is to be scrapped. This will inevitably depend on a whole range of considerations; for instance, on whether the technical changes in production have altered the locational requirements of the industry. They may mean that a different kind of labour is needed, or that the industry is freed from a requirement that previously tied it to a particular area. It may also, of course, be that the original site has ceased to be a good location, and that new investment presents an opportunity for change. A change in location could be a device on management’s part for avoiding trouble with existing unions, especially if the proposed changes in production involve major shifts in labour requirements, and even more especially if the technical change is itself a response to militancy. One important thing to remember here is that a particular ‘physical’ technology (the system of machinery, etc.) does not of itself determine labour requirements. The number of workers, their organization in relation to the machinery, and their wage levels, all have to be negotiated. It may often be possible for management to achieve lower ‘manning’ levels at a new factory than in an existing plant where an actual change in employment has to be negotiated with the present workforce. A geographical shift may therefore make the production change not only easier but also more effective, from management’s point of view. Once again we see a way in which production and location change may be interdependent. Again, in the late 1960s and the early 1970s, with land prices rising quickly, it was sometimes possible for firms to gain substantial amounts of money from the sale or development of an existing site, especially if it was in a major urban area. Such a consideration could also be an important element in the location decision. Of the industries we looked at, it was probably most important in the case of the brewing industry, where a number of firms moved out of central London. It is in situations such as these, when technical change takes place in a context of locational shift, that the notion of ‘in-transit losses’ in employment is relevant (see Massey and Meegan 1979a). For the number of jobs lost at the original location is likely to be greater than the number gained at the new site. Finally, in a situation of output decline, new capacity embodying new techniques will always be replacement capacity and scrapping will have to be a level sufficient not merely to compensate for the new production, but also to reduce capacity below the initial level. But even here, with output falling, there will be potentially mobile employment, and a positive locational decision will have to be made.
