1. “Footloose” or Hi-Tech Industry Returning to Manufacturing Industry Orientation: (1) resource - tr. costs - product < inputs (2) market - tr. Costs - product > inputs (3) “footloose” - two situations: (a) transport costs are a small share of value (b) they are balanced in product & inputs Footloose at startup vs. later in firm life-cycle High-tech as footloose industry Alternative definitions of high-tech (coming)

2. “Industry” as a set of equivalent products versus similar products Examples - Product - Location BoeingaerospaceSeattle area PACCARtrucksSeattle area Intermecbar-code equipmentMt. Terrace Fluke Corp.measuring instr.Everett Quinton Instru.Medical eq.Seattle Micron chips/computersBoise Physio Controlmedical electronicsRedmond Tektronixelectronic eq.Portland area Microsoftdiversified CSRedmond Columbia Machineconcrete block eq.Vancouver

3. Attributes Product Diversity Most are small firms Many are indigenous, but in Oregon there is a significant FDI presence Role of incubators - existing firms & formal institutions (e.g. Fluke Hall on campus- UW Center for Commercialization’s New Ventures Facility & Washington Nanofabrication Facility) Locational determinants - founders & employee preferences University linkages

4. Rapidly Changing Product Cycles Frequently rapid changes in product and process technology One result - mergers, acquisitions, deaths, and new startups – Quintessential examples - Microsoft Office Suite, WWW strategy, Alliances – Boeing Airline models, acquisitions & divestitures over time. A tendency towards continuous “reinvention” of enterprises.

6. Developed by Heike Mayer, Ph.D. from Portland State

9. Boeing : An Atypical Case Study Early History Product Innovation in the 1920’s and 1930’s Catapulting the corporation in WW-II Jet-liner technology: waves of development Cycles in demand and structural shifts in procurement patterns, and in manufacturing technology Role of Boeing in the regional economy

11. Source: The Boeing Logbook

12. 1916 1929 1934 1940 1950 1960 1970 19801990 Source: The Boeing Logbook

13. Source: The Boeing Logbook

14. Source: The Boeing Logbook

16. Boeing Employment Fluctuations

17. Boeing’s Long-Run Outsourcing Trend Regional Purchases are about 7% of total, mostly services Source: Washington State Input-Output Tables

18. History of Boeing Purchases in Washington State

19. Boeing Employment Impact as a Share of Total State Employment

20. Washington Aerospace Job Impacts

21. 787 Production Components

22. 787 Production System

24. Modified 747 to carry 787 parts

25. Does Boeing Spin Out New High Tech Firms? Source on High - Tech Startups: Gary Schweikhardt

26. The Waning Influence of Boeing? Source: Puget Sound Regional Council Step 2030 Database Much weaker impact of downturn Big Aerospace Drop in Jobs Boeing downturn vs. other tech?