Pericentral Innovation in the Automotive Industry

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Par geography The global automotive industry is emblematic of the manufacturing industry as a whole. The concentration in the countries of the North – typical of the traditional division of labor – is still a reality: 2/3 of the 60 million vehicles produced each year in the world come from the three poles of the Triad that are the United States, Japan, and Western Europe. The last thirty years, however, have seen the emergence of new productive spaces.

South Korea succeeded in bringing its manufacturers into the closed club of the world oligopoly, Mercosur and the big continent countries like India and especially China were able to attract investments from multinational groups. Other countries with much smaller domestic markets such as Spain and Mexico have also become privileged areas of automobile manufacturing. We had analyzed (Layan, 2000) the particular emergence process of these spaces centers located in the immediate margins of the major traditional poles of the world industry.

This study highlighted certain a priori paradoxical characteristics of the specialization of these new regions. Recent peripheral industrialization is visibly at odds with the theoretical schemes most familiar to economists. Far from being a “discount” industrialization, downgraded or even obsolete, automobile production in these new spaces is most often at the forefront of innovation, in terms of products and especially processes.

The essentially organizational nature of peripheral innovation leads us to favor the hypothesis of strategic decisions by manufacturers tending to protect themselves, through off-site experimentation, from the risk of resistance by employees to these changes. Risk of resistance to a more flexible and tense work organization which deteriorates working conditions and trivializes status and professional knowledge, but above all risks opposition to the growing blurring of institutional references, the boundaries of business and brand fading into more anonymous productive networks.

The paradox of pericentral industrial innovation
2During the twentieth century, national automobile systems, controlled by a few manufacturers with the consent of the public authorities, had formed in most industrialized countries, the economic weight of this industry being considered from the point of view of activity, employment as exports. The rest of the world was essentially a marketing area for northern produce.

Establishments abroad were limited, in the most protected national markets, to the assembly of lots of spare parts (CKD assembly) or to the production of some obsolete models (Latin America, Eastern Europe). In the 1980s, the area of ​​automobile production gradually widened to new countries, on the outskirts of Community Europe, for example.

3New installations, as we will see, are always at the forefront of modernity and specialize in products often identical to those which continue to be produced by factories in traditional regions. The first paradox for an economist adept at standard models of international specialization. In these models, the international division of labor is the expression of a marked difference between territories and takes place through an alignment between the particularities of nations and the characteristics of products and/or processes.

The economic optimality leading to a valuation of the structural differences of the territories by their productive specialization. Reality more difficult to admit than the similarity of the central and peripheral productions, one can even find in peripheral zones products and productive organizations at the forefront of innovation.

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