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Can Industrial R&D Survive the Decline of Production Activity: A Case Study of the Chicago Area

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  • Alenka S. Giese

    (Federal Reserve Bank)

  • William A. Testa

    (Federal Reserve Bank)

Abstract

By distinguishing industrial R&D from manufacturing production, this study identifies a local economy's comparative advantage by activity rather than by product. The Chicago area's comparative advantage has shifted away from production and toward R&D activity during the 1976 to 1985 period. Underlying the Chicago area's overall manufacturing decline, those Chicago area R&D activities associated with its mainstay industries have survived and grown. The product cycle paradigm provides a behavioral framework with which to interpret the underlying revival in R&D activity. Production activities have moved away in search of low-cost environments while attendant R&D facilities have continued to display an attraction for Chicago's urban resources. So too, Chicago's past development has left a legacy of technological infrastructure, which some outside industries have found attractive in locating their R&D facilities.

Suggested Citation

  • Alenka S. Giese & William A. Testa, 1988. "Can Industrial R&D Survive the Decline of Production Activity: A Case Study of the Chicago Area," Economic Development Quarterly, , vol. 2(4), pages 326-338, November.
    • Handle: RePEc:sae:ecdequ:v:2:y:1988:i:4:p:326-338
    DOI: 10.1177/089124248800200406
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