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This article compares the relationship between economic development and public policy in two of the most prosperous regions of the 1980s: Massachusetts in the United States and Baden-Württemberg in West Germany. Beginning with a critique of the theory of the product life-cycle, the article examines the rise and fall of traditional industries in Massachusetts and their survival in Baden-Württemberg. It then goes on to consider the rise–but also the vulnerability–of the high-tech and financial firms in Massachusetts, as well as the more robust, though almost invisible growth of these sectors in Baden-Württemberg. The burden of the argument is that there are, strictly speaking, no ‘mature’ industries and public policies aimed at stimulating innovation are most successful when the latter is integrated into the local industrial structure as a whole rather than isolated into a distinct high-tech sector.
Sabel et al. (Wed,) studied this question.