New evidence on the economic effects and diffusion of FMS

It is argued that flexible manufacturing systems (FMS) are a very important recent development in industrial automation. Based on a three-year study of over 200 firms in Japan, the United States, and Western Europe, a summary of new data concerning the economic effects of flexible manufacturing systems and their rate of diffusion is presented. The following three conclusions are suggested: the potential economic advantages of FMS seem often to have been achieved, the average estimated rate of return from an investment in FMS appears to have been substantially lower in the United States than in Japan, and, relative to other important industrial innovations of this century, the rate of diffusion of FMS has been slow.>