Small Town and Rural Economic Development: A Case Studies Approach

By Peter V. Schaeffer; Scott Loveridge | Go to book overview
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The quality control dilemma facing rural just-in-time suppliers is one justification for the superiority of urban locations. If fluctuation in demand cannot be smoothed using unskilled temporary employees, then the existence of external markets for workers in urban areas may provide a more feasible solution. A similar argument can be made regarding small-batch firms with respect to their need for highly skilled employees. Emerging industries characterized by substantial volatility and production uncertainty may make the internal development of workers' skills infeasible. Finns in these industries may have no choice but to rely on external markets for skilled workers. And yet, the strategy of relying substantially on external labor markets is contrary to high performance, high commitment IR/HR practice. There is wide agreement that work has become less idiosyncratic, transforming the former necessity of internal markets to deal with problems of asset specificity into a management option, as illustrated in the case studies presented here. In the "fragile model" of industrial development, it is the "professionalization" of work within a specific firm context that argues for the internalization of skill formation and promotion. In contrast, the "resilient model" regards the "professionalization" of work as transcending firm boundaries. Urban locations will likely be necessary to follow this latter strategy.
1. Why does the author use the term "fragile virtue" in his title?
2. Will the loyalty systems the author describes here be able to withstand the pressures of the global economy, especially competition from low-wage countries?
3. What might happen to an employer whose labor force is 40 percent contingent during an economic boom?


An earlier version of this chapter is available as TVA Rural Studies Staff Paper 98- 5, at A version of this paper was presented at the 43rd North American Meetings of the Regional Science Association International in Arlington, Virginia, November 14-17, 1996. The author thanks Cynthia Rogers, Glen Pulver, and Jonathan Zeitlin for constructive comments. The usual caveat applies. The views expressed herein are the author's and do not necessarily represent the views of the U.S. Department of Agriculture or the Economic Research Service.

The names of the counties have been changed in this discussion. Readers wishing to investigate the cases more thoroughly are invited to contact the author for the genuine county names. The counties are located in southern Minnesota, Missouri, and Iowa and northern Wisconsin.


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