The Dictionary of Human Geography

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location of its production (cf.profit cycle).

The idea is usually attributed to Vernon

(1966), although its antecedents are consider-

ably older. Vernon intended his model as an

alternative to the Heckscher–Ohlin model of

internationaltrade, and he insisted that inter-

national investment decisions taken by

manufacturers were driven by more complex

considerations than differences in factor and

transport costs. He proposed instead that

products evolve through three distinct stages,

and that manufacturers choose different loca-

tions in each of them:

(1) Thenew producttends to be unstable,

since its design and production are still

being modified and perfected. This usu-

ally involves considerable interaction

between producers and suppliers and

between producers and consumers as

modifications are introduced, test-

marketed and appraised. Producers thus

require swift and effective access to a

deep and diverse pool of suppliers and

to consumers. These requirements are

most likely to be met in major metropol-

itan industrialized economies.

(2) Thematuring productundergoes a pro-

cess of increasing standardization and,

as market demand grows, the scale of

production increases. Uncertainties

about design and marketability diminish,

so the need for flexibility is reduced. The

major concern for most manufacturers

becomes minimizing production costs,

and they seek locations outside the most

heavily industrialized economies, where

labour costs are lower.

(3) Thestandardized productprompts manu-

facturers to turn still further afield, to less

developed countries, particularly where

their products are labour-intensive, have

a high price elasticity of demand, and are

only weakly dependent on external

economiesfor their production.

Although these ideas were directed at inter-

national trade, they enjoyed their most inten-

sive application at the sub-national scale.

Thompson (1968) recast Vernon’s hypothesis

as a ‘filtering-down’ theory of urban economic

change. New products were supposed to ori-

ginate at the top of the urban hierarchy

because of the concentration of highly edu-

cated scientific and technical workers, univer-

sities and other research institutions. The

earliest production of such innovations

would occur in the sameregionsfor the

reasons outlined by Vernon. With increasing

standardization of the product and production

process, the tie to such highly skilled labour

would weaken, and cost considerations would

drive manufacturers to seek out locations in

intermediate urban centres where semi- and

unskilled workers would be available in large

numbers at lower wage rates. As products

reached advanced maturity, their production

would shift to the lowest tiers of the urban

hierarchy or out into rural locations.

Thompson’s assessment of the long-term pro-

spects for such regions was unequivocal: ‘their

industrial catches come to them only to die’

(p. 56). When Vernon and Thompson began

to work on the product life cycle concept, the

long-term dominance of established industrial

regions such as the Manufacturing Belt of the

USA was unchallenged. For Thompson, the

decline of such regions was unthinkable,

because of their proven ability over the long

run to continue to generate new products. The

loss of manufacturing to more peripheral

regions through the filter-down process was

thus little cause for concern. A scant decade

later, however, these assumptions were called

into question by a major shift in economic

activity between the regions of the USA. For

Rees (1979) and Thomas (1980), the decline

of the Manufacturing Belt could be explained

by the accelerated rate ofdecentralizationof

production activities, as intensified competi-

tion from newly industrializing countries

heightened the importance of cost-reduction

for US-based manufacturers. And in contrast

to Thompson’s views, Rees and Stafford

(1986) argued that previously peripheral areas

such as the US Southeast could eventually

achieve a critical mass once a sufficient volume

of capital had been invested in production

facilities in the region. At this point, they sug-

gested, the ‘incubator’ functions generating

new products and firms traditionally associated

exclusively with the largest metropolitan regions

in the Northeast and Midwest could take root in

these new locations. This thesis found empirical

support in studies showing that many of the

largest manufacturing firms had already shifted

some of their highest-order (especially research

and development) functions away from their

original headquarters locations to places further

down the urban hierarchy (Pred, 1977: see also

sunbelt/snowbelt).

More recently, the product life cycle con-

cept has been criticized for its excessive deter-

minism and essentialism, especially its

implicit claim that all products follow a similar

trajectory over time (Storper, 1985; Taylor,

Gregory / The Dictionary of Human Geography 9781405132879_4_P Final Proof page 588 1.4.2009 3:20pm

PRODUCT LIFE CYCLE