PART II—
A GEOGRAPHICAL AND HISTORICAL OVERVIEW OF THE SOUTHERN CALIFORNIAN TECHNOPOLIS
Chapter 3—
The Structure and Organization of High-technology Industry in Southern California:
A Brief Profile
I argued in the preceding chapter that we have now entered an era in which postfordist production sectors constitute the leading edges of capitalist economic growth and development. Southern California's high-technology industrial ensemble is a major and yet in many respects an idiosyncratic case of this phenomenon. Here, I shall show how high-technology industry grew in the region over the 1960s, 1970s, and 1980s. I shall then demonstrate how the ensemble is made up of a distinctive combination of small flexibly specialized producers and large systems houses , and I shall describe how these two segments of the local economy interrelate with each other so as to form a single and multifaceted industrial complex.
High-technology Industrial Development in Southern California during the 1970s and 1980s
Growth and Change
One of the problems that we immediately face in any examination of the recent historical record of high-technology industrial development in Southern California is the periodic redefinition of the official Standard Industrial Classification (SIC). The effect of this is to make it extremely difficult to obtain runs of consistent data on industrial activity
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over long periods of time. Tables 3.1, 3.2, and 1.5 provide three different definitions of high-technology industry in Southern California for the years 1964, 1974, and 1988 in terms of the Standard Industrial Classifications in force in each of those years (i.e., respectively, the classifications of 1957, 1972, and 1977). These definitions are of necessity extremely provisional, but they are probably the best approximations that can be made, at the two- and three-digit SIC levels, to the main high-technology industrial complex of the region for the specified years. The three definitions diverge from one another in important respects, and strictly speaking, data given in terms of one cannot be compared to data given in terms of another. Fortunately, however, many of the changes made in the Standard Industrial Classifications over the years have involved much readjustment within the given definitions of high-technology industry (especially in the change from the 1972 to the 1987 classifications) so that in aggregate the data assembled in tables 3.1, 3.2, and 1.5 are roughly comparable. Until 1972,
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guided missiles were included in SIC 19 (ordnance and accessories); and for the case of Southern California, indeed, SIC 19 is overwhelmingly dominated by the guided missile sector. SIC 19 was abolished in the 1972 Standard Industrial Classification, and guided missile manufacturers were reassigned to SIC 372 (guided missiles, space vehicles, and parts).
Tables 3.1 to 3.5 plus table 1.5 give us a strong sense of the changing pattern of high-technology industrialization in Southern California for the period since the early 1960s. The ways in which some of the data given in these tables were estimated need to be elucidated. For reasons of confidentiality, the source from which the data were taken (i.e., County Business Patterns ) occasionally deletes information for certain sectors in particular counties. In such cases, I have made estimates, wherever possible, of the missing values from the frequency distributions of establishment sizes provided by the source. Unfortunately, the largest size-class defined by the source is open ended, and for the 1964
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data (tables 3.1 and 3.3) this sometimes makes it impossible to estimate employment. As a result, some of the statistics given in tables 3.1 and 3.3 represent only loose lower bounds on employment levels. In later years, County Business Patterns presents data in a way that makes it possible to estimate suppressed employment figures even when there are establishments in the largest and open-ended size-class. The method for doing this is described in appendix A. Thus, when data for the years 1976 and 1988 are presented (in tables 3.2, 3.4, 3.5, and 1.5) they are either direct measures or point estimates.
The data indicate that high-technology industrial employment in Southern California has grown strongly, if erratically, over the last three decades. The year 1976 comes toward the end of the crisis period of the mid-1970s, and hence the data shown in tables 3.2 and 3.4 represent an abnormally depressed economic situation. Even so, high-technology industry outperformed almost all mass-production sectors in both the United States and Southern California by a wide margin at this time. More remarkable than the growth of employment has been the growth in the number of high-technology establishments in the region. This number more than doubled over the period from
1964 to 1988, suggesting, as we shall remark in more detail below, that average establishment size has been declining over the years.
At the same time, the pace of high-technology industrial development in the region has varied greatly from county to county. In Los Angeles County, which in quantitative terms dominates the whole region, high-technology industrial employment has been stable or declining over the last few decades (though numbers of establishments have increased modestly). By contrast, Orange and San Diego counties have expanded at a remarkable rate. In very recent years, the most peripheral and least developed counties—Riverside, San Bernardino, Santa Barbara, and Ventura—have started to grow very rapidly, and while this growth is relative to a small base we can observe some of the incipient phases of new high-technology industrial district formation occurring in these cases.
The Shifting Frequency Distribution of Establishment Sizes
In addition to the general patterns of growth and change described above, high-technology industry in Southern California has been undergoing a series of long-run changes in the frequency distribution of establishment sizes.
For present purposes, a rough twofold categorization of high-technology industrial establishments in Southern California is proposed. On the one side we have small and medium-sized establishments employing fewer than 500 workers; on the other side we have a group of large establishments that employ 500 workers or more. This line of demarcation is debatable of course, though as will be seen, it serves our objectives well, and most important, it coincides with the boundary of one of the major establishment-size categories defined by County Business Patterns , which is the source of the data used in this analysis.
Total employment in these two categories of high-technology industrial establishments was computed by the method described in appendix A. In 1988, small and medium-size high-technology establishments employed a total of 144,489 workers; and large high-technology establishments employed 325,372. Thus the large-establishment segment is 2.25 times larger in terms of total employment than the small. The small to medium-sized segment, however, is much larger in terms of total number of establishments, for it has an
Figure 3.1
Total employment in high-technology industrial establishments with 500
or more workers in Southern California, 1974–1988.
(See appendix A for data source.)
overwhelming 95.4 percent of the total. Moreover, over the period from 1974 to 1988, aggregate employment in small to medium-sized high-technology establishments in the region grew by 67.1 percent, whereas aggregate employment in the large-establishment segment grew by a comparatively modest 31.5 percent; concomitantly, employment in the small- to medium-sized–establishment sector increased in relative terms from 24.4 percent of all high-technology employment to 30.8 percent over the same period. Figures 3.1 and 3.2 trace out trends in absolute and relative employment for the large-establishment segment on a year-by-year basis, and figure 3.3 shows trends in (a) the number of large establishments as a percentage of all high-technology establishments in the region, and (b) the average size of high-technology establishments. The figures drive home the point that whereas absolute employment in the large-establishment segment of the high-technology industrial ensemble increased over much of the 1970s and 1980s, the segment is steadily losing ground in comparative terms to small and medium-sized establishments.
Figures 3.1, 3.2, and 3.3 also suggest that there are definite cyclical fluctuations in the overall relative downtrend observable in the large-establishment segment, with unusually strong expansions of employment in years when aggregate employment rises and unusually strong
Figure 3.2
High-technology industry in Southern California, 1974–1988: Percentage
of employment in establishments with 500 or more workers.
Figure 3.3
High-technology industry in Southern California, 1974–1988: Percentage of
establishments with 500 or more workers, and average size of establishment.
decreases in years when it falls. Note, however, that the method used to estimate employment in large establishments has some propensity to magnify the amplitude of these ups and downs (see appendix A for details). The propensity is probably limited in its total effects, but we should nonetheless approach the revealed fluctuations with considerable circumspection. With this reservation in mind, temporal variations in employment in the large-establishment segment may be analyzed in terms of a logistic regression equation in which Pt (the proportion of high-technology employment in Southern California concentrated in establishments with 500 or more workers) is expressed as a function of t (time) and Et (total regional employment in high-technology industry). The computed equation is
which, with an R2 of 0.81 and degrees of freedom of 12, is significant at the .01 level; the coefficients attached to the independent variables are significant at the same level.
As conjectured, the equation suggests that there is a clearly declining trend in Pt as a function of time and that this trend is punctuated by upturns and downturns in periods of rising and falling employment, respectively. To the degree that we can invest confidence in Pt as a real measure of temporal trends (see appendix A) it is evident that large establishments disproportionately take on additional workers in good times, and disproportionately lay off workers in bad times. This conjecture runs counter to the argument of Berger and Piore (1980) who claim that the large-establishment segment as a whole retains a relatively stable level of employment across the economic cycle, and that it is the small-establishment segment that absorbs the main fluctuations in aggregate employment. It is conceivable that Berger and Piore's claims may hold more widely true in mass-production systems, but further investigation of this point is needed.
If the large-establishment segment is of declining relative significance in the high-technology industrial complex of Southern California, it remains, as we have seen, of major and even growing importance in absolute terms. Two additional points must now be made. First, if we look at individual high-technology industrial sectors in Southern California, a couple of them evince a small but unambiguous relative increase in aggregate employment in large establishments. These sectors are SIC 366 (communications equipment) where employ-
ment in large establishments went from 75.0 percent of the sectoral total to 80.5 percent between 1974 and 1987, and SIC 376 (guided missiles, space vehicles, and parts) where employment in large establishments went from 94.7 percent to 97.4 percent. In both of these sectors, systems houses are especially well developed as a function of the massive internal economies of scope that accrue to the production of elaborate military and space technologies. Second, the large high-technology manufacturing establishments of Southern California are almost all subsidiary units of multiestablishment and multinational corporations, and if individual plants (and firms) may be downsizing, their economic and political power nevertheless remains enormous, and is indeed almost certainly increasing.
Some commentators (e.g., Brusco 1986, 1990; Trigilia 1990) have claimed that Marshallian industrial districts are made up only of small firms and establishments. The data presented above make it evident that large establishments are an important and relatively durable element of Southern California's high-technology industrial districts. These districts, moreover, are composed for the most part of a functionally adaptable blend of flexibly specialized producers and systems houses.
Flexible Specialization and Systems-house Forms of High-technology Industrial Production
Available published statistics do not allow us to distinguish between flexibly specialized producers and systems houses, as such, within the high-technology industrial ensemble of Southern California. However, most of the small producers are presumably flexible specialists of one variety or another, and many of the largest electronics, aircraft, and space equipment manufacturers can certainly be seen as being systems houses. The question before us is, how do these two segments of the local economy behave and interact, and how do they contribute (or not contribute) to the perpetuation and growth of industrial districts?
Flexible Specialization
In conformity with the powerful line of argument first laid out by Piore and Sabel (1984), many scholars have sought to ground analysis of current technological-institutional structures of production in the
idea of "flexible specialization." The idea is generally considered to apply with special force to firms that produce small batches of output in constantly changing product and process configurations, and it stands in direct opposition to the notion of mass production, i.e., a form of industry characterized by standardized outputs made in extremely long runs. Flexibly specialized firms are thus able to engage in high levels of product differentiation, customization, and semicustomization, and they often turn necessity into a virtue by transforming their endemic instability into an opportunity for constant technological upgrading and design innovation.
Because flexible specialization usually entails a breakdown of internal economies of scale and scope in the production process, it tends to be associated with small or medium-sized and vertically disintegrated units of production. These units then typically become caught up in dense linkage networks through which they are able to tap into significant external economies of scale and scope. With the resurgence of flexible specialization in modern capitalism, therefore, has come a pervasive tendency to reagglomerate economic activity. Sabel (1989) has argued, too, in favor of the view that a convergence between large firms and industrial districts may be occurring, in which the former increasingly externalize many kinds of production activities and are subsequently reorganized within wider transactional networks. We have observed above that in the high-technology industrial districts of Southern California a definite downsizing of production units has been systematically occurring. And this observation is consistent with the wider findings of analysts such as Acs and Audretsch (1990), Loveman and Sengenberger (1990), and Birch (1987), who have shown that significant decreases have occurred in establishment and firm sizes (in manufacturing and services) in the major capitalist economies since the 1970s. This tendency stands in marked contrast to an earlier period over much of this century in which rising concentration seems to have been the rule (Prais 1976).
Systems-house Production
Despite the latter remarks, large production units remain—and will no doubt continue to remain—an extremely important element of the economic landscape of North America, both inside and outside of industrial districts. In the high-technology industrial districts of Southern California today, large production units flourish in particular
abundance in the guise of systems houses. Specifically, the term "systems house" is used here to designate any industrial establishment that (a) has massive internal economies of scope, very often flowing from a design-intensive or R&D-intensive production process, that (b) therefore has a variegated internal structure and employs large numbers of workers, and (c) manufactures complex outputs in small batches, very often (but not necessarily) over a lengthy production period. At any one time, a given systems house may be engaged in several different production programs run largely in isolation from one another, but with certain managerial, purchasing, technical, etc., functions in common. Output specifications may change radically from one program to the next. Sometimes it may take months or even years to complete one production cycle (as in the case, for example, of the Space Platform currently under construction by McDonnell Douglas Astronautics, or the Space Shuttle produced by Rockwell Space Systems Division).
Systems-house producers are, as it were, latent flexible specialists that have been unable to escape from the force of internal economies of scope. That is, in the absence of the various synergies holding their many and differentiated internal parts together, they would presumably fragment into networks of smaller, more specialized producers with greater ease of entry into and exit from different product markets. Moreover, just as flexibly specialized firms were present in the period of fordist mass production (though rarely at the leading edges), so too were systems houses in the form, for example, of major motion picture studios, big publishing houses (but not printing works), shipyards, and so on; and if they are perhaps most commonly found in technology-intensive sectors today, they are by no means restricted to high-technology industry but are also found in a wide variety of other manufacturing and service sectors.
Flexible Specialization Systems Houses, and Postfordism
Together, the flexibly specialized and systems-house segments of Southern California's high-technology economy constitute a peculiar kind of postfordist industrial system. Both of them represent opposite poles of a continuum of technological and organizational possibilities, and at the same time, both stand in marked opposition to mass production. A suggested tripartite ordering of these forms of manufacturing activity is laid out in figure 3.4 where fundamental archetypes are
Figure 3.4
Types of production units arranged by establishment size and
batch size.
arrayed according to characteristic establishment size and batch size. These two dimensions of variation of course stand in as proxies for other variables such as levels of product standardization, routinization of production processes, length of production cycle, and so on. To be sure, any given production unit may not in reality conform precisely to one of the three archetypes, and composite forms can be identified, as for example, in the case of specialized car manufacturers that combine elements of all three and would hence tend to be located somewhere in the interior of the triangle shown in figure 3.4.
Notwithstanding their evident differences from flexibly specialized producers, systems houses are assuredly an authentic element of the postfordist flexible economy. They make much use of flexible equipment in the form of computerized and robotized machines, they focus on the production of small batches of varied products that may go through many design changes as they are in process, and they drive forward large segments of the rest of the flexible economy, for even though they may be marked by intense internal economies of scope, they invariably consume a wide range of diverse, variable, and often unpredictable inputs (whereas in mass-production industries the trend is toward standardization and streamlining of inputs as far as possible). Systems houses, in brief, are typically interconnected via intricate transactional networks with large numbers of flexibly specialized
producers. For the same reason, they are very often found in dense flexible-production agglomerations. In the high-technology systems houses of Southern California, workers are frequently unionized, with the International Association of Machinists and the United Auto Workers the dominant organizations. Workers employed in smaller units of production in the region, by contrast, are rarely unionized. Paradoxically—but as a reflection of the genesis of Southern California's high-technology industrial systems houses in the period from the 1930s to the 1950s—union contracts tend to be rather "fordist" in nature. These contracts typically lay much emphasis on detailed job descriptions, seniority in layoff and recall procedures, and a strict line of demarcation between management and labor. In many establishments, attempts are now being made to reorganize the old labor-relations system and above all to set up workers' teams with rotating job responsibilities, though the latter experiments are still in a state of flux. In a number of recent interviews with representatives of management, it was also found that high-technology systems houses in Southern California rarely put just-in-time methods of input-output organization into practice, probably because of the variability and unpredictability of the production schedules that they face.
Location and Linkage Structures in Southern California's High-technology Industrial Districts:
A Preliminary View
Figure 3.5 displays the locational pattern of large high-technology manufacturing establishments in Southern California in 1990. For ease of drafting the figure, only the ninety-three high-technology establishments in the region with employment of 1,000 or more workers are shown. Many of these establishments have head offices in Southern California, but perhaps the majority (e.g., Ampex, General Dynamics, Interstate Electronics, Kyocera, McDonnell Douglas, etc.) have head offices elsewhere, including other countries. Also indicated in figure 3.5 are isolines denoting levels of accessibility to all aerospace-electronics establishments (986 of them) in the region for which addresses could be readily obtained. Most of the latter establishments consist of small and disintegrated production units. Accessibility at any given location to the set of 986 aerospace-electronics establishments is defined as
Figure 3.5
Southern California high-technology industrial establishments with 1,000 or more workers.
SIC codes conform to the 1987 Standard Industrial Classification. Isolines designating
accessibility levels to all aerospace-electronics producers in the region are shown.
(Data from California Manufacturers' Association, California Manufacturers' Register ,
Newport Beach, Database Publishing Co., 1990.)
figure 3.5 sharply delineate four of the major high-technology industrial districts of Southern California, i.e., (a) the San Fernando Valley area to the northwest of central Los Angeles, (b) the El Segundo-Hawthorne-Inglewood area to the southwest of central Los Angeles, (c) northern Orange County, and (d) the San Diego area.
The striking feature of figure 3.5 is the fact that large establishments concentrate for the most part in and around the major high-technology industrial districts. Contrary to what we might expect on the basis of presuppositions about the location of land-intensive economic activities, large establishments are for the most part not to be found on the cheapest land toward the far periphery of the entire
urban system; nor, certainly, are they to be found at the center of the entire metropolitan system; rather, they cluster to a significant degree at intermediate locations where local levels of accessibility to suppliers are comparatively high. The locational association between large establishments and the main high-technology industrial districts suggests that there is a spatial and functional symbiosis between these establishments and the rest of the production system. Despite the internal economies of scope that characterize large systems houses, they typically have massive and multifaceted demands for externally supplied material inputs and subcontract services. We know that some of these inputs come from far beyond the confines of Southern California. We also know that there is a remarkable intraregional network of economic transactions in the region focused on large producers.
The latter point can be dramatically exemplified with data on subcontracting patterns for NASA prime contractors. In fiscal year 1989, there were five major NASA prime contractors in Southern California who individually awarded more than $1 million in subcontracts to first-tier subcontractors (NASA 1989). The five prime contractors were the California Institute of Technology, General Dynamics, McDonnell Douglas, Rockwell International, and TRW. These five institutions held twenty different NASA prime-contract awards at eight different locations in Southern California in 1989. In total, they gave out 4,787 first-tier subcontracts worth $10,000 or more each. Of these, 2,698 (56.4 percent) were awarded to Southern Californian producers, and they constituted 38 percent of the aggregate $1,540 million given out. The fact that significantly more than half of the contracts awarded went to local firms, and that these contracts also represented much less than half of the total dollar amount subcontracted out, signifies that intraregional short-distance linkages are biased towards smaller transactions. Out of the total of 4,787 first-tier subcontracts nationwide, 648 second-tier subcontracts worth more than $10,000 each were awarded in turn. In this second subcontracting tier, 208 contracts (31.1 percent) were given out to Southern Californian producers and they represented 49.2 percent of the aggregate value of all second-tier subcontracts. Many of the 208 second-tier subcontracts awarded to Southern Californian producers originated from outside the region and thus they comprise a blend of long-distance and short-distance linkages.
Large aerospace-electronics establishments in Southern California thus have major impacts through their procurement practices on local
economic growth and development. These impacts eventually filter down through the region's transactional networks to the very smallest subcontractors and service suppliers. Unlike mass-production industries, which have often had an inimical effect on industrial districts by initiating a dynamic of horizontal and vertical integration combined with decentralization of routinized branch plants, the systems houses of Southern California have consistently played a very positive role in helping to sustain the wider local industrial base. The fact that they are gradually shrinking in size and importance over the course of time suggests that they may be continuing to play an important role through the spinoff and externalization of particular functions. However, since the late 1980s, they have been much affected by severe cutbacks in federal defense expenditures that have resulted in significant layoffs and plant closures, with disastrous consequences for lower tiers of subcontractors in the region.
Conclusion
I have demonstrated that industrial districts may consist of varying combinations of both large and small establishments, and that large producers are often quite instrumental in inducing and sustaining agglomeration. In some cases, no doubt, the advent of large establishments may lead to the deliquescence of a formerly viable industrial district. In other cases, as with high-technology industry in Southern California, large establishments frequently function as mainsprings of development and growth over long periods of time.
One important point that emerges from the discussion in both this chapter and the previous one is that industrial districts can be conceptualized at a high level of abstraction, and that this conceptualization can be fruitfully applied to a wide variety of historical and geographical cases. This claim in no way dismisses the importance of additional finely delineated analyses that are sensitive to the peculiarities of history and geography or to the effects that such peculiarities always have on the form and functions of individual places (cf. Amin and Robins 1990). However, it does aver that there are common underlying dynamics and processes that allow us to approach these diverse individual instances of industrial districts with a unified theoretical language.
The high-technology industrial districts of Southern California are a potent illustration of the general definition of industrial districts offered in chapter 2, just as they are marked by many important fea-
tures that are purely local and episodic in character. They also dramatically exemplify the constructive role that large systems houses may play in flexible high-technology production agglomerations, and the ways in which both large and small producers can coexist in mutual functional and spatial interdependence over long periods of time.
Chapter 4—
Southern California's Pathway to High-technology Industrial Development, 1920–1960
There is going to be a Detroit of the aircraft industry.
Why not here in Los Angeles?
E. J. Clapp (1926)
How, we may ask, was Southern California's extraordinarily dense and advanced high-technology industrial system initiated? How did the process of industrialization unfold over time, and how did it come to be expressed in so multifarious a complex of activities?
The original inception of high-technology industry in Southern California goes back to the 1920s and 1930s, when the aircraft industry first took root in the region. During World War II, enormous expansion of the aircraft industry occurred, and the first stirrings of missile and military electronics production took place. Over the next fifteen years or so the aerospace-electronics complex in the region emerged as the main focus of high-technology industry in the country, and it came to function as a great growth machine driven forward by lavish Department of Defense procurements on the one hand and an expanding and internally generated stock of agglomeration economies on the other hand (Clark 1981; Markusen and Bloch 1985; Steiner 1961). These agglomeration economies reside preeminently in the localized production networks and labor markets that have steadily been put into place in the region over the last several decades.
The Genesis of Southern California's High-technology Industrial Complex
The empirical circumstances attending the birth of the aircraft industry in Southern California in the 1920s and 1930s represent a com-
plicated story and one that has hitherto not been well understood. Fortunately, the story has recently been recounted in great historical detail by Lotchin (1992) in his book Fortress California, 1910–1961 , and what follows runs, in part, parallel to his account.
In the very earliest phases of any industry's growth, it is often the case that many widely scattered places are more or less equally likely to emerge as locational foci of the industry. This state of affairs certainly seems to have been a feature of the aircraft industry, which in the 1920s functioned at a variety of locations throughout the United States. Its establishment and eventual rise to dominance in Southern California seem to have been due, in the first instance, to a combination of several fortuitous circumstances, and then, in the second instance, to the systematic development of extensive agglomeration economies as the industry moved into its formative stages and began to attain critical mass. Among the circumstances that helped to initiate aircraft production in Southern California were the early flowering of a culture of amateur aviation in the region, and the presence of a number of early aircraft industry pioneers such as Martin, the Loughead Brothers, Douglas, Ryan, and Northrop. There was, in addition, a tightly knit power elite which over the first few decades of the twentieth century was intent on fostering local economic growth and which commanded the financial means to have a significant practical impact. Thus, in 1920, a group of Los Angeles businessmen led by Harry Chandler, the publisher of the Los Angeles Times , raised $15,000 to help start Donald Douglas in the business of aircraft manufacture. The local military establishment also contributed to the growth of the infant industry by its demands for a variety of experimental planes. Finally, until the mid-1930s, the open shop rules that prevailed throughout Southern California represented a major advantage that helped the burgeoning aircraft industry in its earliest years of development (Cunningham 1951; Hatfield 1973; Lotchin 1992; Markusen et al. 1991; Markusen and Yudken 1992; Schoneberger 1984).
Some authors have claimed that the abundant sunshine, mild winters (permitting outdoor construction of aircraft), and the all-around excellent flying weather of Southern California were also decisive factors in the local development of the industry (e.g., Hammond 1941). This claim seems rather unconvincing, however, given the much greater early success of the industry in the northeast of the country where these alleged advantages were conspicuously absent. Indeed, in the 1920s and much of the 1930s, Southern California was actually a
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minor center of the industry, with only some 10 percent of the country's aircraft manufacturing capacity. The data presented in table 4.1 indicate that over the 1920s and down to the early 1930s the industry was largely concentrated in the Manufacturing Belt (in New York and Ohio above all), with the western part of the United States lagging well behind. Then, over the 1930s, California (i.e., Southern California for the major part) steadily outstripped all other states in terms of both aircraft production establishments and especially employment. By 1937, California had 26.1 percent of the nation's establishments and 48 percent of total wage earners in the aircraft industry.
Among the earliest aircraft firms to settle in the region were the Douglas Aircraft Company and the Lockheed Aircraft Company. Both were founded in the 1920s, the former in Santa Monica, the latter in Burbank, with Douglas also setting up a branch plant at El Segundo in 1932. Another important early firm, Ryan Aeronautical, was established in San Diego in 1931. This was followed by a spate of successful new firms over the 1930s. Thus, in 1935, the Consolidated Aircraft Corporation (later Consolidated-Vultee and then General Dynamics Convair) made its appearance in San Diego. In the same year, North American Aviation (later Rockwell North American) moved to Ingle-
Figure 4.1
Major airframe assembly plants in Southern California in the 1930s. The
urbanized areas at the time are shaded.
wood from the northeast of the country. Vultee Aircraft Inc. (which merged with Consolidated in 1943) was set up in Downey in 1936. In 1938–39, John Northrop, who had earlier worked for both Douglas and Lockheed, founded Northrop Aircraft Inc. in Hawthorne. And in 1941 Douglas established yet another branch plant—at Long Beach—that eventually became the firm's main production unit. All of these aircraft manufacturing establishments were located in what were then the fringes of the built-up area of the region, where land was relatively cheap and where adjacent airstrips were available (see fig. 4.1). All were engaged predominantly in final airframe assembly, with engines imported from the northeast of the country where engine manufacture was (as it is today) locationally concentrated. By the late 1930s, after considerable and often bitter confrontations between management and labor, most of the big assembly plants in the region (with the major exception of Northrop) had been effectively unionized (Allen and Schneider 1956).
Notwithstanding the evident growth of the industry in Southern California over the late 1930s, the region might well have remained a minor outlier relative to the U.S. aircraft industry as a whole, had not a number of critical technological breakthroughs occurred. Two such breakthroughs merit special mention. One was Lockheed's creation of the L-10 Electra aircraft in 1933, and the other—of surpassing significance—was the development by Douglas of the DC-3 aircraft in 1935 (Miller and Sawers 1968; Phillips 1971). These two aircraft offered superior standards of speed and efficiency, and they rapidly became the preferred craft in the rapidly growing airline industry. In 1933, according to Phillips (1971), Lockheed products accounted for only some 10.6 percent of all new aircraft added to U.S. domestic fleets, and Douglas products accounted for just 1.2 percent. These percentages had risen to 32.8 percent and 59 percent, respectively, by 1935 thanks to the L-10 and the DC-3; and by 1937 the equivalent values were 11.1 percent and 87 percent, i.e., virtually the totality of all new orders.
Whatever the peculiar and complicated conditions that attended the original foundation of Southern California's main aircraft assembly plants, the turning point of the region's fortunes and its emergence as the dominant center of the industry (and eventually of the entire aerospace-electronics industry) dates especially from this period of technological advance and growth in the late 1930s. Even so, we can still not project forward from these events (i.e., the initial founding acts and the first major round of technology-driven expansion) to the subsequent developmental pattern of the complex. This subsequent pattern is one of great intricacy involving as it does the shifting military needs and policies of the U.S. government, rapid technological change, and the active diversification of the complex. But one important factor dating from these early years certainly helped to maintain the region's leading status. As the aircraft industry expanded, so there came into being in the surrounding area a network of dependent subcontract shops and parts suppliers, and a widening pool of specialized and habituated labor. One directory of manufacturing firms in the Los Angeles area in 1939 lists six major aircraft assembly plants together with thirty aircraft accessories and parts suppliers and three aeronautical instruments manufacturers (Los Angeles County Chamber of Commerce 1939). Many other types of industrial establishments listed in the same directory under such headings as machine shops or metal working shops must also have been linked both directly and indirectly
to the growing aircraft industry in the region. The external economies that were almost certainly generated in this way no doubt helped to enhance the region's comparative advantages in aircraft production, thereby raising productivity levels and contributing to the emergence of a functionally interrelated system of agglomerated production activities.
Consolidation and Early Diversification of Southern California's High-technology Industrial Base, 1940–1950
With the outbreak of World War II, the aircraft industry in Southern California made a major leap forward, as assembly plants were pushed to expand their production of military aircraft to the limits of their capacity. Employment in the industry in Los Angeles jumped from 15,000 in 1939 to 190,700 in 1943 at the peak of wartime production (see table 4.2). This expansion was facilitated by a large intake of female employees into the industry, and by the fine-tuning of assembly procedures. For a brief time during the war, the aircraft industry came close to becoming a classic mass-production industry, with Vultee in Downey actually installing a powered assembly line (Rae, 1968). However, with the turn to small batch production of evermore complex individual aircraft in the postwar years, this tendency has been permanently reversed. The wartime expansion of aircraft production was also underpinned by a vast expansion of outsourcing networks, with significant elements of these networks concentrated in the local area (Day 1956; Harlan 1956). In fact, in the nation as a whole, subcontracting in the industry increased from 10 percent of all work performed to 38 percent between 1940 and 1944 (Cunningham 1951; Lilley et al. 1946). This increase in subcontracting tended to reinforce the overall growth of Southern California's aircraft manufacturing agglomeration, for reasons that have been amply articulated by Day (1956: 209–210):
From the prime contractor's point of view, ease of liaison and the possibility of an increase in personal control are the most important advantages arising from close proximity. . . . The greater ease of control tends to keep the location of the smaller subcontract firms close to the main plant. The numerous small outside manufacturers with their relatively tiny orders require proportionately greater attention from the prime contractor when compared with the same purchase dollars spent for a single major subcontract item. Thus, the small subcontracts and ordinary shop overload work
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are, in the majority of cases, placed in companies in the same urban area as the prime contractor and seldom outside a 300- to 400-mile radius.
Large establishments as well as small were caught up in this local network of subcontracting activity and parts production, and among the more important of these were Garrett, AiResearch, and Hughes Aircraft in Los Angeles and Rohr in San Diego (Austin 1965; Chapin 1966; Schoneberger and Scholl 1985). In this fashion, the geographical bases of the aircraft industry as a dense, localized production complex in Southern California were progressively secured.
Simultaneously, the region was incipiently on the point of flowering as a major locus of missile and defense electronics production. Already, in 1929, the Guggenheim Aeronautical Laboratory (renamed the Jet Propulsion Laboratory in 1943) had been founded at the California Institute of Technology in Pasadena, with Theodore Von Karman as its director. Over the subsequent decades, the laboratory came to play an increasingly important role in the development of rocket technology and in the training of skilled personnel. In 1942, Von Karman and his associates founded Aerojet Engineering Corporation
(later Aerojet General) in Azusa, just east of Los Angeles, on the basis of an Air Force contract to develop jet-assisted take-off rockets (Hoyt 1971; Malina 1964). Douglas Aircraft, too, was an early participant in rocket technology with its Roc I guided bomb developed over 1940–1941 (Ingells 1979; Maynard 1962). Roc II followed in 1944. In 1943, Lockheed was given a contract by the Army to develop a jet fighter aircraft (i.e., the F-80 Shooting Star). The Marquardt Company was founded in Van Nuys in 1944 and began development of ramjet engines. Douglas started work on the Corporal E missile in 1944, and this was developed further by the Firestone Defense Products Division, which produced the WAC Corporal missile in the same year. The Firestone plant had been set up in Los Angeles four years earlier to manufacture tank treads and aircraft tires. The year 1945 marked a great intensification of work on missile development and production. On the basis of its earlier experiences in rocketry, Douglas undertook to produce the Nike Ajax surface-to-air missile in 1945 and the Sparrow II in 1950. In 1947, Hughes Aircraft secured an Air Force contract for guided air-to-air missile development that resulted in the Falcon missile in the early 1950s; and in 1945 Consolidated-Vultee initiated an R&D program that would eventually lead to the Atlas Intercontinental Ballistic Missile. Also in 1945, Consolidated-Vultee produced the Lark surface-to-air missile, and Ryan Aeronautical began work on the Firebird. North American, in its turn, started work on the Navaho missile for the Navy in 1946. The record thus tersely recited is testimony to the extraordinary extensiveness of rocket and missile development in Southern California, even as early as the period of the World War II.
A roughly parallel development of electronics can be sketched out. Prior to the 1940s, Southern California had only a weakly developed electrical/electronics industry. Kidner and Neff (1945a, 1945b, 1946) indicate that in the various subsectors making up the electrical machinery industry of Los Angeles in 1939, employment was only a modest 2,202 to 2,387 workers (see table 4.3) and compared to the United States as a whole (and especially the metropolitan areas of the northeastern seaboard), Southern California was rather poorly endowed with electrical industries (cf. Hall and Preston 1988; Hund 1959; Warner 1989). Even its communications equipment and radio-manufacturing industries were of minor importance, though these were later to expand and diversify in remarkable ways. In spite of the underdeveloped state of the prewar electronics industry in Southern
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California, a few local firms founded at this time survived through the 1940s and ultimately participated in the postwar electronics boom. Among them were Collins Radio, Gilfillan, and Hoffman Radio. Bendix and Lear also had branch plants in the region producing aircraft radio equipment. In addition, a number of prewar aircraft firms—most notably Hughes Aircraft—later diversified into electronics.
In 1942, one of these early electronics firms, namely Gilfillan (now ITT Gilfillan), developed a ground control approach (GCA) radar system in cooperation with engineers at MIT. The GCA system was used to assist aircraft landing in bad weather. It was widely applied in the later years of the war, and played a major role in the Berlin airlift. After 1945, Hughes Aircraft started to take a major lead as a significant innovator in military electronics. The firm had originally been established by Howard Hughes in Burbank in 1932 as a service facility for his air-racing activities. After a move to Glendale, the firm was permanently established in Culver City in 1941. Here, the firm worked on flexible feed chutes for aircraft machine guns, and developed—under federal contract—the prototype HK-1 flying boat and the XF11 reconnaissance plane. In 1945, the firm hired both Simon Ramo and Dean
Wooldridge who quickly built up an advanced electronics capacity, and in 1948 the firm won an $8 million contract to construct radar weapons control units for the Lockheed F-94 (Barlett and Steele 1979; Hughes Aircraft Company 1986). Ramo himself has written of this era of Hughes Aircraft:
It came to house the largest concentration of technical college graduates, including the greatest number of Ph.D.s in any single industrial facility of that period except for the Bell Telephone Laboratories in New Jersey. (Ramo 1988: 36)
By 1952, Hughes Aircraft was employing over 15,000 workers, 1,000 of whom were scientists; and by the end of the 1950s, the firm was responsible for some 20 percent of the electronics business of the entire state of California (Arnold et al. 1960).
During the 1940s, the educational and research infrastructure of the region was also changing rapidly, and facilities for the training of advanced engineering and scientific workers were now expanding apace. The role of the Jet Propulsion Laboratory at the California Institute of Technology has already been mentioned. At the University of California, Los Angeles, a College of Engineering was established in 1941 with an emphasis on aeronautical engineering. In 1942, Northrop opened an Aeronautical Institute (later Northrop University) to train its own engineers. At the University of Southern California, an engineering program focusing on aeronautics was inaugurated in the late 1940s, and at the same time, the university's electrical engineering program was greatly strengthened (cf. Bloch 1987). In 1946, Project RAND was set up with federal money as a department of Douglas Aircraft, and it was given a mandate to inquire into the feasibility of intercontinental nonsurface warfare (RAND Corporation 1963). Out of this project the RAND Corporation was born in 1948 as an independent not-for-profit organization funded by the Air Force. This event presaged a remarkable efflorescence of military-industrial research institutions that were to grow up within the region over the subsequent ten or fifteen years.
Growth of the Complex, 1950–1960
Defense Spending and Industrial Growth in Southern California
As the above discussion makes evident, Southern California during the war years was a hive of experimental projects and technological ex-
plorations underpinned by the military activities of the federal government. All of this activity was soon to blossom into a great network of productive activity and innovation as Southern California's high-technology industrial base expanded in the postwar years. That said, the ending of World War II ushered in a period of deep economic depression in Southern California. By 1948, employment in the aircraft industry had fallen to 44,600—a decline of 76.6 percent compared to the peak employment of the industry during the war, and the decline made itself felt even more widely than this by reason of the direct and indirect connections of the industry to the rest of the local economy. In 1949, a total of 178,000 workers were unemployed in Los Angeles, giving an overall rate of unemployment of 13.6 percent (Clayton 1962; Collier and Perry 1953). This period of economic decline, however, was soon to be dramatically broken as the Korean War broke out in June 1950, and as the long Cold War set in (Urbanomics 1969).
These events helped to secure Southern California's rise to preeminence as the nation's major producing region for defense equipment. During World War II, despite the extraordinary expansion of the aircraft industry, California as a whole was third after New York and Michigan in total federal military contract awards (Peck and Scherer 1962). By 1953, it had attained first place with some 15.4 percent of all Department of Defense prime contract awards. The state has kept its lead ever since, averaging about 20 percent of prime contract awards over the period from the 1950s to the 1980s, with Southern California accounting for some 70 percent to 80 percent of this total (Bloch 1987; Clayton 1967).
Table 4.4 shows Department of Defense prime contract awards in the state over the 1950s. There was a marked peak in awards during the Korean War, followed by a sharp downturn in 1954–1957. In the aftermath of the Soviet Union's successful launching of Sputnik in October 1957, prime contract awards began to turn up again, and they then in effect grew generally if irregularly down to the late 1980s. Special tabulations of unpublished Department of Defense data for 1960 made by Isard and Ganschow (1963) allow us to penetrate beneath the aggregate prime contract award figures for the state and to assess the pattern of awards for the seven counties of Southern California (see table 4.5). As the table shows, Southern California as a whole accounted for 71.1 percent of all prime contract awards in the state in 1960, and Los Angeles county alone accounted for 54 percent. Indeed, Los Angeles was the leading recipient of prime contracts out
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of all SMSAs in the country in 1960, with New York a distant second. To be sure, Los Angeles's lead was in part a reflection of its role as a location for the head offices of a high proportion of the country's defense contractors, and much of the prime contract money received would eventually have found its way via subcontracting relations to establishments in other regions. Nevertheless, the existence of a dense and growing network of subcontractors in the Los Angeles area serving the aerospace-electronics industry also probably ensured that a significant proportion of the money remained in the area. As Karaska (1967) has suggested, moreover, there was certainly a large return flow to Southern California of subcontract orders from aerospace firms located in other parts of the country, and this phenomenon would much enhance local defense-dependent employment.
This great outpouring of Department of Defense money into the industrial apparatus of Southern California stimulated considerable expansion of manufacturing employment and population over the 1950s. Collier and Perry (1953) suggest that direct defense employment accounted for 13 percent of the total labor force of Los Angeles
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in the early 1950s, with the aircraft industry having a direct and indirect multiplier effect of 2.74. According to Clayton (1962), defense spending accounted for about 1 in 4 of all manufacturing workers in the region by the late 1950s. Tiebout (1966) calculated for the early 1960s that the direct, indirect, and induced effects of defense spending in the Los Angeles-Long Beach SMSA accounted for 43.5 percent of total employment.
The Statistical Record of Growth
Four major industrial sectors would seem to embody most of the high-technology industrial activity in the region in the immediate postwar years, and employment changes in these sectors no doubt fairly faithfully reflect the impacts of defense spending on the Southern Californian economy. The four sectors are (in the terms of the 1957 Standard Industrial Classification) SIC 19 (ordnance and accessories), SIC 366 (communications equipment), SIC 367 (electronic components), and SIC 372 (aircraft and parts). Unfortunately, the 1957 Standard Industrial Classification entailed significant redefinition of SIC 366; and at the same time, SIC 367 was defined as an entirely new sector. Hence, continuous and consistent time-series data for the two electronics sectors are not available for the time period under consideration here.
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With this latter difficulty in mind, table 4.6 shows employment in the four principal high-technology sectors in Southern California over the period from 1947 to 1962. The table indicates the great expansion and diversification of the defense-oriented industrial system after World War II. The outputs of the system now consist not just of aircraft but also of missiles, communications equipment (i.e., avionics, guidance and control apparatus, and military communications systems), and electronic components (Arnold et al. 1960). The data given in table 4.6 show that after the outbreak of the Korean War, the aircraft and parts sector expanded with particular vigor (with a major switch from propellor to jet-propulsion technology occurring around the same time) (Bright 1978). The aircraft industry then declined again in the second half of the 1950s, in part because of decreasing Department of Defense expenditures, and in part because of the increasing substitution of missiles for aircraft in national defense. Concomitantly, the ordnance and accessories sector grew rapidly after the mid-1950s as intermediate-range ballistic missiles (IRBMs) and inter-continental ballistic missiles (ICBMs) were brought prominently into production. Employment in both SIC 366 and SIC 367 soared as more and more
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contrived electronic equipment was developed for applications in aircraft and missiles and their associated ground control systems.
The growth of the defense industries also helped to spur massive population growth in the region, and indeed Ikle (1960) has shown that in-migration to Los Angeles over the period from 1940 to 1959 is closely and positively correlated with changes in employment in the aircraft industry. In 1940, the population of the region stood at 3.61 million. Twenty years later, it had grown by 148 percent to 8.95 million (see table 4.7). In absolute terms, most of this growth was concentrated in Los Angeles county, the high-technology industrial heartland of the region, which added 3.25 million people between 1940 and 1960. However, two other major foci of high-technology industry in the region, San Diego County and (after 1950) Orange County, also grew apace (Lund 1959). Not all of this population growth can be uniquely ascribed to the direct and indirect effects of defense spending, of course, though if the evidence cited earlier on the multiplier effects of defense spending is correct, population would certainly have expanded much less rapidly had such spending been curtailed.
What were the detailed spatial and sectoral components of this industrial growth? How did particular firms develop and grow over this
period? How was the regional industrial system constituted as an interdependent network of producers and supporting services? And what kinds of institutional arrangements underpinned the whole system and helped to drive it forward?
Sectoral Patterns of Growth, 1950–1960
As the aerospace-electronics industrial complex of Southern California became more deeply entrenched in the region in the 1950s, it came typically to consist of large systems houses surrounded by dense networks of smaller establishments providing various kinds of specialized material inputs and services. Final product configurations in this industrial complex were extremely variable, as reflected in the proliferation of specialized niches in military markets, where, even as production proceeds, radical and frequent design changes are often called for. The data laid out in tables 4.8 and 4.9 show some of the main types of aircraft and missiles produced in Southern California in the 1940s and 1950s, and condensed as the data may be, they give a strong sense of the dramatically shifting character of defense production work in the region. This sense is heightened if we also take into account the large numbers of experimental and prototype aircraft produced (and which are not registered in table 4.8). Even civilian aircraft production—at Convair, Douglas and Lockheed—experienced many shifts and turns over the 1950s.
The Aircraft and Parts Sector
In the 1950s, the major aircraft assemblers in Southern California were Convair (which was absorbed into General Dynamics in 1953), Douglas, Lockheed, North American Aviation, and Northrop. To a remarkable degree, these manufacturers were still producing aircraft at their original prewar locations.
Rae (1968) reports that the size of these assembly plants in 1948 ranged from 4,900 workers for Northrop to 18,522 for North American. Then, as now, there were significant internal economies of scale and scope in aircraft assembly, making large production units the norm. That said, these establishments also put out large quantities of work, and so they were functionally dependent on an extensive network of direct and indirect input suppliers. At this time, the Los
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Angeles Chamber of Commerce (1950) in its directory of local manufacturing firms listed 349 firms under the rubric of "aircraft parts and accessories." This figure is certainly an underestimate of all the local firms with direct and indirect ties to the aircraft industry and we should add to it firms in such sectors as machining, casting, plastics molding, and electronics, among others. The Select Committee on Small Business (1956) reports that in 1954 twenty-one aircraft manufacturers nationwide did business with 34,623 different firms, of which California alone accounted for 10,314, or 29.8 percent.
Thus constituted as an agglomerated network of producers (and concomitantly as a focus of external economies), the aircraft industry in the region maintained its leading role, with some 30 percent of the nation's employment in SIC 372. For the most part, the industry produced military aircraft (see table 4.8). Lockheed, however, also produced Constellations and Superconstellations for civilian markets, and Douglas produced large quantities of civilian aircraft in the DC series, with the jet-powered DC-8 coming into production in the late 1950s. Also in 1955 Convair started work on its ill-fated 880 jet airliner. In addition, in the mid-1950s, Hughes Aircraft in Culver City began to manufacture helicopters on a significant scale.
Figure 4.2
Locations of aircraft, ordnance, and parts manufacturers, Southern California, 1955. San Diego
shown in inset. Freeways are shown as of 1955. (Data from California Manufacturers' Association.)
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Figure 4.2 shows the locations of 232 individual aircraft and parts producers in the region in the mid-1950s. This figure is based on address data taken from the California Manufacturers Register for 1955. The main assembly plants together with surrounding cohorts of
parts producers cluster tightly together in Los Angeles County in three main areas, i.e., the inner-city area of Los Angeles, the eastern San Fernando Valley (especially around Burbank-Glendale), and in the western Los Angeles basin (especially in Santa Monica and the El Segundo-Hawthorne area). There was also at this time a small outlier of the industry in San Diego, focused on Convair. The bases of this geographic pattern were laid down in the 1930s when the locations of most of the large aircraft assembly plants were established. Even today the pattern is surprisingly little changed, though the severe restructuring of the aircraft industry in the late 1980s is now beginning to have a tangible effect on the intraregional geography of the industry.
The Missile Producers
Missiles are assembled out of the same basic subsystems as aircraft, namely, an airframe, a power plant, and a guidance and control mechanism. Accordingly, as missiles started to become an essential element of the defense arsenal, the aircraft manufacturers were especially well placed to move rapidly into this expanding market, and they did so with great success over the 1940s and 1950s. By 1961, the top five aircraft producers in the United States as a whole accounted for 68.3 percent of all missile production (Simonson 1964). Aircraft manufacturers also had the advantage of long familiarity with the inner complexities of the Department of Defense, the monopsonistic market for missiles. To be sure, a number of specialized missile manufacturers had already made their appearance in Southern California before the 1950s. As indicated earlier, these were Aerojet-General, Marquardt, and the Firestone Guided Missile Division. In addition, Grand Central Rocket was founded in 1955 as a rocket propellant and engine producer, though six years later it was absorbed by Lockheed. A few electronics firms such as Hughes Aircraft and (after 1953) Ramo Wooldridge were also involved as prime contractors with missile production. However, it was the aircraft firms that entered most forcefully into this now burgeoning sector of production, and by the mid-1950s, most of the large aircraft assemblers had established active missile divisions.
As early as 1950, Douglas Aircraft established a Missile Division within the firm's Santa Monica plant. In 1962 the Missile Division became the Missile and Space Systems Division, which in 1964 moved to Huntington Beach (where it was subsequently renamed McDonnell
Douglas Space Systems). Lockheed set up its Missile Systems Division in Van Nuys in 1954, though the division moved a year later to Sunnyvale in the Bay Area (Yenne 1987). Also in 1954, shortly after the "Teapot Committee" headed by John Von Neumann had recommended construction of an ICBM with an H-bomb warhead, General Dynamics established its Convair Astronautics Division in San Diego, where the Atlas ICBM was constructed (see table 4.9); in the same year, the firm also set up its Pomona Division, where the Terrier missile was manufactured for the Navy. In 1955, North American Aviation opened both its Space and Information Systems Division in Downey (manufacturing Hound Dog missiles), and its great Rocketdyne Division in Canoga Park where the engines for the first Atlas, Thor, and Jupiter systems were produced. Finally, the Ford Motor Company created its Aeronutronic Systems Division in Glendale in 1956 where work on the Shillelagh missile began; and in 1960, the establishment moved to Newport Beach where in 1976 it was renamed Ford Aerospace and Communications Corporation.
The locations of ordnance (i.e., missile) manufacturers and parts suppliers in Southern California in the middle of the 1950s are shown in figure 4.2. At this time, there were only some twelve such establishments in the region, though they were for the most part extremely large in size. Their geographic distribution is much like that of aircraft and parts establishments, with some of the more recently founded plants at that time (such as General Dynamics-Pomona and Rocketdyne) occupying relatively peripheral locations. By the mid-1950s, the major missile producers in the region had also become caught up in a dense local network of interindustrial linkages. Thus, a missile market directory of the period informs us that within the confines of Southern California, there were eight missile prime contractors connected to eleven major subcontractors who in turn were connected to 175 subcontractors providing electronic guidance, tracking, telemetering, and checkout equipment (American Aviation Publications 1958). Almost all of these producers were located in Los Angeles County, with the residue mainly in Orange and San Diego counties.
Electronics
With the increasing use of electronic technologies in both aircraft and missiles, there was an enormous and sudden expansion of Southern California's electronics industry over the 1950s. In a survey made by
Arnold et al. (1960), it was found that 76.3 percent of the sales of a sample of sixty-two electronics firms in Los Angeles were directed to military end uses. According to one report, the entire state had 14,858 employees in electronics in June 1950, and one year later the number had grown to 26,504, over 75 percent of whom were located in Southern California (California State Chamber of Commerce 1952). This growth was due to the opening of new electronics divisions by aircraft and missile producers, and more importantly to the emergence of large numbers of specialized independent electronics manufacturers.
The first aerospace company to establish an electronics division in the region was Northrop with its Anaheim Division (later Nortronics) inaugurated in 1951. The Anaheim Division was the earliest major systems house in Orange County. North American Aviation set up Autonetics in Downey in 1955 alongside its Space and Information Systems Division. Lockheed Electronics was established in Burbank in 1960. Many of the aircraft and missile producers in the region also developed significant in-house electronics production capacity over the 1950s.
More important, a series of independent defense electronics manufacturers grew up within the region, a few of which dated from the prewar years (see above), but most of which have their origins in the 1950s. Thus, in addition to such older firms as Bendix, Collins, Gilfillan, Hoffman Radio, Hughes Aircraft, and Lear, during the 1950s such important producers as Hallamore, Interstate Electronics, Litton Industries, Ramo Wooldridge, RCA Missile and Surface Radar Division, Robertshaw-Fulton, and Teledyne along with a growing mass of smaller components manufacturers made their appearance within the industrial fabric of the region (Lamden and Pemberton 1962; Mettler 1982; O'Green 1988). In addition, Hughes established both its Ground Systems Division in Fullerton in 1957 and another electronics plant in El Segundo in 1958. Ramo Wooldridge came into being as a spinoff from Hughes Aircraft because of internal disputes occasioned by Howard Hughes's management failures. Tex Thornton left Hughes for the same reason, and promptly began to develop Litton Industries (Barlett and Steele 1979). Ramo and Wooldridge set up business in Inglewood where the firm (via its Space Technology Laboratory) was given the task by the Air Force of acting as systems manager for the Atlas ICBM, i.e., coordinating the entire development and production process (but not actually engaging in direct manufacturing activities; these were the responsibility of Convair Astronautics as prime contrac-
tor). Within a year, employment in Ramo Wooldridge had risen to 3,269 (Hoyt 1971), and by 1957 the firm was overseeing 220 prime contractors and thousands of subcontractors (Mettler 1982). In 1958, the firm merged with Thompson Products of Cleveland to become Thompson Ramo Wooldridge (later, TRW). Because Thompson Ramo Wooldridge was the systems manager on the Air Force ICBM program, it was not allowed to bid as prime contractor on other Air Force projects. In response to this problem, the Space Technology Laboratory was split off from the firm in 1958 as a wholly owned subsidiary, and in 1960 it became the federally owned Aerospace Corporation in Inglewood (Witze 1965). Thompson Ramo Wooldridge was now free to bid on other Air Force projects, and it did so in succeeding years with considerable success.
Figure 4.3 is a map of 470 electronics establishments in the greater Los Angeles area in the middle of the 1950s. The locations of these establishments correspond to address data given by the Los Angeles Chamber of Commerce (1955). The map reveals a locational pattern of establishments marked by a fairly strong presence in the inner city of Los Angeles—where most of the electronics producers of the 1930s were situated (cf. Pegrum 1963)—complemented by three main decentralized clusters. One of these lies to the northeast in Pasadena; another spreads out to the northwest along the San Fernando Valley (Izzard 1961; Security First National Bank 1960); and yet another extends to the west and southwest to Santa Monica and the El Segundo-Hawthorne area. This pattern corresponds markedly to the one shown for aircraft and parts manufacturers in figure 4.2. Note that there is little sign in figure 4.3 of the extensive decentralization of electronics producers that eventually occurs into the western sections of the San Fernando Valley and into northern Orange County, where two great high-technology industrial districts make their definite historical appearance over the 1960s and 1970s.
Institutional-infrastructural Complements of the Southern Californian Aerospace-electronics Complex in the 1950s
Within the high-technology industrial complex of Southern California, there also developed a grid of private and public defense research laboratories of various kinds. The earliest of these, as we have seen, were the Jet Propulsion Laboratories and the RAND Corporation. In
Figure 4.3
Locations of electronics establishments in the greater Los Angeles area, 1955. Freeways are shown
as of 1955. (Data from Los Angeles Chamber of Commerce.)
addition, the Santa Barabara Research Center was started in 1952 by an ex-employee of Hughes. The Center was purchased by Hughes Aircraft in 1956, and then rapidly came to prominence in the infrared electronics field (Hughes Aircraft Company 1986). In 1960, Hughes acquired a further research laboratory, one that had been started in Malibu in 1958 by Potter Electric Company (Hamilton 1962). The laboratory was renamed the Hughes Malibu Research Center and it developed as a major center of laser research. In 1956, the System Development Corporation (dedicated to the performance of R&D for the Air Force) emerged out of the RAND Corporation. And as mentioned earlier, the Aerospace Corporation was set up in 1960 in order to carry out general integration of Air Force space and missile programs. Lastly, General Motors created its Defense Research Laboratories (later Delco Systems Operations) in Santa Barbara in 1960 where work proceeded on marine acoustics and electronics for aerospace applications.
An event of major significance for the overall growth and development of the Southern Californian aerospace-electronics complex was the Air Force's establishment of the Western Development Division (WDD) of the Air Research and Development Command. The WDD was set up in Inglewood in 1954 (just after Atlas had received top Air Force priority) and was immediately assigned the responsibility of acting as the main Air Force liaison body with manufacturers involved in developing the Atlas ICBM. Under the then newly developed weapons system management procedure, prime contractors supervised the work of subcontractors and integrated all subsystems into the final product, whereas before the 1950s the armed services were directly responsible for procurement, and the prime contractors simply assembled the final product (Harlan 1956; Kucera 1974; Peck and Scherer 1962; Stekler 1965). Even so, considerable governmental coordination of manufacturers' operations was required under the new weapons system procedure, and the presence of the WDD in the region was a reflection of the intense local transactional networks that this task called forth. By the end of 1954, the WDD was also responsible for the Titan missile, and then in 1955 for the Thor IRBM (Air Force Systems Command n.d.). In 1957, the WDD was redesignated the Air Force Ballistic Missile Division, and through a series of complex mutations, it survives to this day in the form of the Space Systems Division.
This strong military presence in the region was, and is, complemented by a large number of military bases used variously for air-
craft and weapons testing and missile launches. Among the more important of these bases are Camp Pendleton Marine Corps Base, China Lake Naval Weapons Center, Cooke AFB (after 1958, Vandenberg AFB), Edwards AFB, March AFB, Miramar Naval Air Station, North Island Naval Air Station, Norton AFB, and Point Mugu Naval Test Range.
To this extensive system of activities and institutions underpinning the high-technology production networks of Southern California, we must add not just the major internationally reputed universities (as already indicated), but also an exceptionally dense cluster of smaller colleges and schools producing large numbers of trained technical workers. In-migration added greatly to the existing pool of skilled workers over the 1950s. At the same time the vast expansion of urban infrastructure (especially the freeway system and a greatly extended suburban fringe) in Southern California throughout the decade contributed to the overall growth of the region and helped to consolidate its role as a major high-technology industrial complex.
The Way Forward
By the end of the 1950s, the aerospace-electronics complex of Southern California had been firmly set in place, and the region was now by far the largest high-technology industrial region in the world, a status that it maintains to the present day. With the launching of Sputnik in 1957, and the formation of NASA in 1958, U.S. efforts to reach space intensified greatly. Southern California's aerospace-electronics producers participated in a major way in these efforts, leading to further diversification of the complex over the 1960s into space vehicle and equipment production. An early manifestation of this tendency was the collaboration between the Jet Propulsion Laboratory, Ramo Woold-ridge, and the Army Ballistic Missiles Agency to launch in January 1958 the first U.S. satellite (i.e., Explorer ) to orbit the earth (Hagen 1964). A year later, in 1959, Rocketdyne's Redstone engine was used to power the first manned space flights in NASA's Project Mercury (Bland 1964).
Two further important trends were in evidence in the region's pathway to high-technology industrialization as its formative period was coming to an end. The first was that the endemic undergrowth of small subcontract shops and input suppliers providing specialized (often customized) services to high-technology producers had now ex-
panded to really major proportions. These smaller firms were engaged in the manufacture of such outputs as printed circuit boards, transistors, electronics assembly services, molded plastics, and aluminum foundry products. The second trend involved the steady bifurcation of high-technology labor markets, with a well-paid managerial, scientific, and technical stratum at the top, and a poorly paid unskilled stratum at the bottom. The lower stratum was and is primarily composed of Hispanic and Asian immigrants (including large numbers of women), and after the mid-1950s these immigrants were actively absorbed into the burgeoning sweatshop segment of the high-technology industrial complex.
By the late 1950s, political leaders in other regions of the United States were becoming aware of Southern California's expanding high-technology industrial capacity and its favored position in Department of Defense prime contract awards. In May 1959 Senators Jacob K. Javits and Kenneth B. Keating, both of New York, attempted to undercut this state of affairs with their Armed Services Competitive Procurement Act, which sought to reduce Department of Defense spending in California while increasing it in other states (Clayton 1962; Committee on Armed Services 1959; Schiesl 1984). California's congressional delegation, however, succeeded in persuading the Armed Services Committee to annul the bill, and Southern California's position as the nation's premier aerospace-electronics manufacturing region was thus ensured. This success no doubt reflected in part the political power and skills of the California delegation; but it also certainly reflected the circumstance that Southern California (like parts of the Bay Area) had by this time become a massive locus of production and labor-market activity engendering such potent agglomeration economies that it was now virtually impossible to reorganize the spatial bases of defense contracting except at unacceptably high cost.
Southern California has continued to the present day to develop and grow on the basis of its high-technology industrial networks formed over the period from 1940 to 1960. Other parts of the United States (e.g., Texas, Colorado, New England, New York, and elsewhere) have also participated vigorously in defense contracting, but since the mid-1950s, none has done so as insistently or as successfully as Southern California.