Industry decline, recession and adaptation to uncertain economic conditions

Credit: NoelJ on Flickr

When people ask me what I did my PhD in and I answer that one of the avenues that I explored in my dissertation was the decline of industries, they look into my eyes with a quizzical look. “WHAT? You studied how companies disappear?” The answer is YES, surprising as that may sound. The geography of industrial decline, as some economic geographers call it, is a really interesting topic (and yes, there are environmental dimensions to plant closure).

I have always been fascinated with research topics that may sound somewhat unappealing. But the really fascinating question to me was not simply why do industrial plants or companies close? but what do companies and industrial sectors do that makes them tough it out and survive. In other words, how do declining industries adapt to uncertain and turmoilish conditions?

While I won’t describe my research findings in much detail here (I have a few blog posts coming up on my research blog about the topic), a key insight that I gained is that industries need to be flexible and adaptive to ensure survival. Companies that lack flexibility and are strongly vertically-integrated and hierarchical will definitely NOT survive.

The literature on adaptation is multidisciplinary and quite varied. For my research I examined bodies of work from the organizational behavior, strategic management, climate change, evolutionary ecology and evolutionary economics fields. (SIDE NOTE – I love interdisciplinary research precisely because it allowed me to examine ONE problem from MANY angles. If I just had the time to do research in all the areas I want to!). But one of the things that really struck me is that, more often than not, researchers in the industrial decline field seem to be fixated with wanting to study large numbers of companies but, lacking resources and time, resort to just a few selected case studies.

Methodologically speaking, I am conversant in both quantitative and qualitative methods, and that’s one of my contributions to the literature on environmental economic geography. However, I still think that a big challenge for anyone who wants to understand industrial decline in this time of recession and global economic turmoil will be to find company owners that will want to speak to researchers about the reasons behind their business closure. I am interested in this topic because I want to find ways to help industries and businesses not only stay afloat but to thrive and survive.

[Hat tips to Erik V. at Kitsilano.ca who wrote a recent post on Kitsilano businesses closure that prompted me to write this entry]

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