Industrial Reorganization in Europe: Patterns of Convergence and Divergence in Germany,France and Britain

Abstract

One of the responses to increased uncertainty and heightened competition in the 1980s has been a strategy on the part of large firms to externalise more production and design tasks, leading to what has been termed a new division of labour between firms. In this paper the study of the changing relationship between large buyer companies and predominantly small and medium-sized supplier enterprises (SMEs) is approached in both an historical and a comparative manner. The paper outlines the historical development of industrial structure and organization in Germany, Britain and France and examines the impact of historical formations on current transformations. It places great weight on the way in which firms have been embedded in, and shaped by, their social, institutional and political environment. The interaction of industrial organization with such local or national environments is characterised as an `industrial order'. It is shown how these historically evolved industrial orders have influenced the technological and organizational competences of both large companies and SMEs and how this, in turn, has shaped the relationship between the two types of firm. Variations in industrial order within a society between regions/industries are acknowledged but such diversity is not seen as precluding the elaboration of national patterns. It is argued that, due to fundamental differences in the industrial order between Germany, France and Britain, divergence in current national patterns of industrial reorganization has remained more pronounced than any convergence following the experience of a common exposure to economic and political (from the EEC) pressures. A common experience of a high incidence and fast pace of industrial restructuring should not divert attention from the great degree of continuity and even conservatism within seemingly radical transformations.