Manufacturing in Scotland

Set against the backdrop of current thinking that UK manufacturing needs to move into higher value, this report, commissioned on behalf of the Scottish Manufacturing Advisory Service (SMAS) Board, set out to: Give an account of the current status of manufacturing SME’s in Scotland including current activities, aspirations, strategies and challenges facing them; Assess the progress Scotland has made towards high value manufacturing; Make recommendations as to the type of support needed to enable Scottish manufacturing SMEs invest in their long-term future. The resulting report is based on findings of a survey that delivered responses from 435 Scottish manufacturing companies and in-depth interviews with directors of 45 companies. This research was carried out during the period April to September 2008. Our research suggests that there have been significant shifts within manufacturing SMEs in Scotland. The most notable shifts include: A shift in the basis of competition. Our research suggests that the primary basis of competition for Scottish manufacturing SMEs is not price. Increasingly Scottish SMEs are adding value through quality and customer service. A shift in the nature and scope of operations. Whilst the primary business function of manufacturing companies remains production, there is evidence of increasing levels of design and service activity taking place. Companies reported they expected this trend to continue as the shift in the basis of competition away from price towards innovation and customer service gains pace. These changes suggest a move towards high value manufacturing. However there are major challenges facing Scottish SMEs if they are to compete on new value propositions. Of particular concern are: Lack of strategic vision and understanding of the capabilities and competencies needed to compete on the new value propositions. Whilst companies largely recognise the need to improve manufacturing efficiency, many have not embraced the need to develop and improve processes that deliver value to the customer (eg. Customer service processes, new product development processes etc). If customer service, innovation and quality are key differentiators and the way they add value, then companies need to ensure they have sustainable processes to deliver this value. Changes in operational activity have tended to be the result of evolution and opportunity rather than coherent operational strategy. Many companies need help in generating and enacting strategic change There is a lack of appreciation of the potential value of innovation in delivering value (and indeed the understanding of innovation in its many guises). Almost all companies interviewed reported some problems finding and retaining staff. Whilst in some cases labour shortages were due to specific skills and knowledge, there was also a general problem recruiting people with basic employability who had a desire to work in manufacturing. The poor image of manufacturing was a worry to the vast majority of interviewees. Many companies recognised the potential to exploit opportunities overseas. Some alluded to the fact that it might not be enough to market and export overseas, but that a manufacturing presence may be needed to fully exploit the opportunity. In terms of the support needed, companies stated that they would be looking increasingly for help and support in the areas of manufacturing efficiency and sales and marketing. Supply chain was also an area where companies reported they would be looking for help and support. Companies also suggested that they would like to see improvements in terms of “community”, with a number of interviewees looking for help in accessing not just help and support, but also introductions to other organisations. The research team believe that whilst not always recognised by the companies, support is also needed in the areas of strategy (and linked to this leadership) and in developing and improving processes that add value. Finally, the research suggests worryingly low levels of manufacturing entrepreneurship in Scotland, with only 3% of companies surveyed established within the past 5 years. This is worthy of further investigation. 4 Key findings and recommendations are expanded upon in Table 1. However the key recommendations can be summarised as: Manufacturing SMEs continue to require support in manufacturing efficiency, sales and marketing and supply chain. As companies move away from price as the main basis for competition and towards alternative value propositions, they also need support in developing and enacting strategy. Of particular urgency, companies need help in developing and improving the processes and capabilities that deliver value (beyond traditional manufacturing) Establishing processes that support innovation and product development will be central to the sustainability of many Scottish SMEs Further work needs to be done to investigate the apparent low levels of manufacturing start-ups Further work is needed to understand the areas where Scottish SMEs can actually compete on high volume /low complexity – often due to “localisation” factors Consideration should be given to supporting companies who wish to establish manufacturing overseas to exploit global opportunitiesA skills strategy must be created in line with the needs of manufacturing industry The poor image of manufacturing in Scotland needs to be addresse

On the emergence of scale-free production networks

We propose a simple dynamical model of the formation of production networks among monopolistically competitive firms. The model subsumes the standard general equilibrium approach \`a la Arrow-Debreu but displays a wide set of potential dynamic behaviors. It robustly reproduces key stylized facts of firms' demographics. Our main result is that competition between intermediate good producers generically leads to the emergence of scale-free production networks.Comment: 31 pages, 15 figure

Proposal for an experimental test of the many-worlds interpretation of quantum mechanics

The many-worlds interpretation of quantum mechanics predicts the formation of distinct parallel worlds as a result of a quantum mechanical measurement. Communication among these parallel worlds would experimentally rule out alternatives to this interpretation. A procedure for ``interworld'' exchange of information and energy, using only state of the art quantum optical equipment, is described. A single ion is isolated from its environment in an ion trap. Then a quantum mechanical measurement with two discrete outcomes is performed on another system, resulting in the formation of two parallel worlds. Depending on the outcome of this measurement the ion is excited from only one of the parallel worlds before the ion decoheres through its interaction with the environment. A detection of this excitation in the other parallel world is direct evidence for the many-worlds interpretation. This method could have important practical applications in physics and beyond.Comment: 17 pages, standard LaTex, no pictures, comments welcome, revised version corrects typing error in mixing tim

Income Distribution, Credit and Fiscal Policies in an Agent-Based Keynesian Model

This work studies the interactions between income distribution and monetary and fiscal policies in terms of ensuing dynamics of macro variables (GDP growth, unemployment, etc.) on the grounds of an agent-based Keynesian model. The direct ancestor of this work is the "Keynes meeting Schumpeter" formalism presented in Dosi et al. (2010). To that model, we add a banking sector and a monetary authority setting interest rates and credit lending conditions. The model combines Keynesian mechanisms of demand generation, a "Schumpeterian" innovation-fueled process of growth and Minskian credit dynamics. The robustness of the model is checked against its capability to jointly account for a large set of empirical regularities both at the micro level and at the macro one. The model is able to catch salient features underlying the current as well as previous recessions, the impact of financial factors and the role in them of income distribution. We find that different income distribution regimes heavily affect macroeconomic performance: more unequal economies are exposed to more severe business cycles fluctuations, higher unemployment rates, and higher probability of crises. On the policy side, fiscal policies do not only dampen business cycles, reduce unemployment and the likelihood of experiencing a huge crisis. In some circumstances they also affect positively long-term growth. Further, the more income distribution is skewed toward profits, the greater the effects of fiscal policies. About monetary policy, we find a strong non-linearity in the way interest rates affect macroeconomic dynamics: in one "regime" with low rates, changes in interest rates are ineffective up to a threshold beyond which increasing the interest rate implies smaller output growth rates and larger output volatility, unemployment and likelihood of crises.agent-based Keynesian models, multiple equilibria, fiscal and monetary policies, income distribution, transmission mechanisms, credit constraints

Income Distribution, Credit and Fiscal Policies in an Agent-Based Keynesian Model

This work studies the interactions between income distribution and monetary and fiscal policies in terms of ensuing dynamics of macro variables (GDP growth, unemployment, etc.) on the grounds of an agent-based Keynesian model. The direct ancestor of this work is the "Keynes meeting Schumpeter" formalism presented in Dosi et al. (2010). To that model, we add a banking sector and a monetary authority setting interest rates and credit lending conditions. The model combines Keynesian mechanisms of demand generation, a "Schumpeterian" innovation-fueled process of growth and Minskian credit dynamics. The robustness of the model is checked against its capability to jointly account for a large set of empirical regularities both at the micro level and at the macro one. The model is able to catch salient features underlying the current as well as previous recessions, the impact of financial factors and the role in them of income distribution. We find that different income distribution regimes heavily affect macroeconomic performance: more unequal economies are exposed to more severe business cycles fluctuations, higher unemployment rates, and higher probability of crises. On the policy side, fiscal policies do not only dampen business cycles, reduce unemployment and the likelihood of experiencing a huge crisis. In some circumstances they also affect positively long-term growth. Further, the more income distribution is skewed toward profits, the greater the effects of fiscal policies. About monetary policy, we find a strong non-linearity in the way interest rates affect macroeconomic dynamics: in one "regime" with low rates, changes in interest rates are ineffective up to a threshold beyond which increasing the interest rate implies smaller output growth rates and larger output volatility, unemployment and likelihood of crises.agent-based Keynesian models, multiple equilibria, fiscal and monetary policies, income distribution, transmission mechanisms, credit constraints

Income Distribution, Credit and Fiscal Policies in an Agent-Based Keynesian Model

This work studies the interactions between income distribution and monetary and fiscal policies in terms of ensuing dynamics of macro variables (GDP growth, unemployment, etc.) on the grounds of an agent-based Keynesian model. The direct ancestor of this work is the "Keynes meeting Schumpeter" formalism presented in Dosi et al. (2010). To that model, we add a banking sector and a monetary authority setting interest rates and credit lending conditions. The model combines Keynesian mechanisms of demand generation, a "Schumpeterian" innovation-fueled process of growth and Minskian credit dynamics. The robustness of the model is checked against its capability to jointly account for a large set of empirical regularities both at the micro level and at the macro one. The model is able to catch salient features underlying the current as well as previous recessions, the impact of financial factors and the role in them of income distribution. We find that different income distribution regimes heavily affect macroeconomic performance: more unequal economies are exposed to more severe business cycles fluctuations, higher unemployment rates, and higher probability of crises. On the policy side, fiscal policies do not only dampen business cycles, reduce unemployment and the likelihood of experiencing a huge crisis. In some circumstances they also affect positively long-term growth. Further, the more income distribution is skewed toward profits, the greater the effects of fiscal policies. About monetary policy, we find a strong non-linearity in the way interest rates affect macroeconomic dynamics: in one "regime" with low rates, changes in interest rates are ineffective up to a threshold beyond which increasing the interest rate implies smaller output growth rates and larger output volatility, unemployment and likelihood of crises.agent-based Keynesian models, multiple equilibria, fiscal and monetary policies, income distribution, transmission mechanisms, credit constraints

Product entry in a fast growing industry: the LAN switch market

We provide empirical evidence on market positioning by firms, in terms of market niche, distance from technological frontier and dispersion. We focus on the switch industry, a sub-market of the Local Area Network industry, in the nineties. Market positioning is a function of the type of firms (incumbents versus entrants), market size and contestability and firm competencies. We find that incumbents specialise in high-end segments and disperse their product in a larger spectrum of the market. Instead, entrants focus on specific market niches. Market size, market contestability and firm competencies are also important determinants of product location.switch industry, markets, competition, firm capabilities, product entry

The StartUPS Project at Politecnica Salesiana University (UPS): a Common Good Approach to Institutional Management and Human Development

The purpose of this research is to analyze the StartUPS project from the Politecnica Salesiana University and see how this open environment has enhanced people capabilities considering the person-centered vision and how the project base in common good management and capability approach helped the human development of these project participants. In this analysis the concept of development is reviewed from the well-fare to the well-being and contrast with modern and Andean perspectives aiming to understand different forms of development and management of common pool resources and how this set up a line for future research about how to mix these perspectives with the commonly known indicators to measure development. To measure the impact of the project over the participants development, quantitative and qualitative data was collected from the multiple activities and projects that took place under the project open spaces, data shown how almost unanimously not only the participants but also the mentors, professors and strategic allies improve their capabilities and indirectly their perceived self-well-being. Leaving also new research lines to study how strategic planned activities targeting specific functionings could be applied and improved, how Universities seen as an open environment could become community engagement agents improving the community and national well-being.Lo scopo di questa ricerca è analizzare il progetto StartUPS dell'Università Politecnica Salesiana e studiare come questo ambiente aperto abbia migliorato le capacità delle persone, considerando una visione centrata sulla persona e i pilastri del progetto: la gestione del bene comune e il capability approach, in modo che l'insieme migliorasse lo sviluppo umano dei partecipanti. Questa analisi passa in rassegna i concetti di sviluppo, dall'assistenza sociale (statale) al welfare [integrale], e li contrappone alle prospettive moderne e andine per comprendere le diverse forme di sviluppo, la gestione delle risorse del bene comune e, da questa prospettiva, stabilire una linea di ricerca che si combini con gli indicatori comunemente noti per misurare lo sviluppo. Per misurare l'impatto del progetto StartUPS sullo sviluppo dei partecipanti, sono stati raccolti dati quantitativi e qualitativi dalle molteplici attività e progetti realizzati negli ambienti aperti del progetto, dati che mostrano come quasi all'unanimità, non solo i partecipanti ma anche i mentori, i docenti e gli alleati dell'università abbiano migliorato le loro capacità e indirettamente il loro benessere percepito. Questa analisi propone anche nuove linee di ricerca per studiare come le attività strategiche possano essere implementate e migliorate per le functioning, e come le università, viste come un ambiente aperto, potrebbero diventare agenti di coinvolgimento della comunità che migliorano il benessere della comunità e del Paese

“…then came Cisco, and the rest is history”: a ‘history friendly’ model of the Local Area Networking industry

We study the role that switching costs, compatibility, and mergers and acquisitions, play in influencing the evolution of a multi-market industry. By looking at the case of the Local Area Networking industry, we propose a ‘history friendly model’ to replicate its evolution during the 1990s. Our model explains how a firm can start from a dominant position in one of the existing markets and exploit switching costs and compatibility to enter a new market when it opens. Mergers and acquisitions also play an important role as the new market is pioneered by a new start-up, which is soon acquired by the dominant incumbent. As a result of the acquisition, the acquiring firm becomes leader also in the new market