Product Cycle Approach to Local Economic Development
The product cycle, or movement of products from early stage through to maturity and finally demise has also been matched with a migration of the producing firms from urban area to rural in search of lower production costs. As rural areas have had lower skilled labor, with high work ethics and reluctance to unionize, they have been good places for firms to relocate as R&D costs drop off and production routines standardize.
Of late, these dynamics have been dropping off owing to the export of such jobs off shore where costs are even lower. There have been other factors affecting this movement as well. "Just in time" production, niche marketing, the shift to capital (machinery) rather than human labor and capital movement, have all contributed to the stabilization of industry, the increase of inertia slowing firms movement away from cities and the benefits of the agglomeration effects of the city.
In terms of using this approach to develop a local rural economy, it might be a good idea to factor in the new realities in shopping for a company on the move, and then to keep adding other ways to diversify as such companies may not stay long in an area. Small towns are much like micro businesses, which have a life expectancy of six weeks at any given time. One entrepreneur had a philosophy, which might well be informative in this regard. He used to scan his options and select five projects. Out of the five he could reasonably expect two to last. So when those were underway he would start the next five, and so on until he had between 9 and 14 functioning projects at any given time. whenever it dropped below eight or so, he would initiate another five.
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