Flexible technology and industrial structure in the U.S.

This paper analyzes the development over the postwar period of output, employment, and the number of plants in manufacturing in the United States. It is shown that the distribution of flexible technology in the form of machine tools (NCMTs) shifted markedly toward small plants during the 1980s. It is found that the probability of adoption and the penetration rate of NCMTs are higher in large than in small plants, even though the number of NCMTs per worker is much higher in small plants. This apparent paradox is explained. It is also suggested that the shift of output towards smaller plants is correlated with the increased use of flexible technology, and that this reflects changes in the division of labor among plants of various sizes, as well as changes in the composition and organization of production in large plants.The authors would like to thank Bennett Harrison, an unknown referee, and the editors of this Journal for valuable comments. Any remaining errors are the responsibility of the authors.