I nviconmont arul Manning I) Sonnty .irut Space?, l!)89, volume /.

pages SJ/ 345

Survey 15. A regulation approach to the geography of

flexible production systems

F Moulaort
Department of Economics and Sociology. University of Lille I, 5965b Villeneuve d'Aneq Codex, France
E A Swyngedouw
Department of Geography, University of Oxford, Oxford 0 X 1 3RT, Fwjland
Received 2 February 1988; in revised form 19 April 1909

Abstract. In recent years the Regulation School has shown its merits in the analysis of the
regional and urban geography of economic restructuring under contemporary capitalism.
This restructuring has left many industrial regions in the midst of a profound socioeconomic
crisis. At the same time, new territorial production complexes accomplish or promise economic
prosperity in certain regions or subregions. In this way, new spatial networks of economic
and social agency are shaped, and movements toward spatial concentration or deconcentration
of economic activities, accompanied by particular forms of industrial relations, are promoted.
The intention in this paper is to focus on the determinants of the socioeconomic and spatial
processes at work in the construction and dissolution of regimes of accumulation and their
corresponding modes of regulation as they characterize historical epochs in long-term
economic development. More precisely, the intention is to explore the sociospatial dynamics
of technological change and innovation during the transition from Fordist to flexible (or post-
Fordist) accumulation and regulation. In the first part of the paper, the 'regulation approach'
(the approach used by the French Regulation School) is proposed as a theoretical-methodological
scheme for the analysis of concrete changes in spatial organization during a given historical
epoch. In the second part, this approach is illustrated in terms of the current global
(rc)organization of capitalist production in social space. In the third part new directions are
proposed in which the regulation approach might be further explored.

1 Introduction
T h e Regulation School, developed in French social science circles during the mid-
1970s, has had an important impact on the analysis of macroeconomic crisis
generation (Aglietta, 1976; Boyer and Mistral, 1983; Leborgne and Lipietz, 1988)
and the dynamics of the relations between capital, labor, and the state in a crisis
environment (Boyer, 1986a; Coriat, 1979),
M o r e recently, the Regulation School has shown its merit in the analysis of the
regional and urban geography of economic restructuring under contemporary
capitalism (Leborgne and Lipietz, 1988; Lipietz, 1986; Moulaert and Swyngedouw,
1988). This restructuring has left many industrial regional in the midst of a
profound socioeconomic crisis. Severe unemployment problems and the decay of
economic and social infrastructure have stigmatized these territories as 'old' and
unattractive to new accumulation dynamics. At the same time, new territorial high-
tech complexes accomplish or promise economic prosperity in other regions or
subregions (Silicon Valley, the Boston area, Southern France, the M-4 Corridor,
etc). New territorial production complexes, or industrial districts, have taken the
lead in economic development away from 'traditional' industrial growth poles.
Many urban centers have undergone major changes in their service functions and
have been considerably affected by industrial restructuring. All these processes,
taken together, have definitely affected location behavior, interregional trade, and
investment flows. New spatial networks of economic and social agency have been
shaped, and movements toward spatial concentration or deconcentration of economic
activities, accompanied by particular forms of industrial relations have been p r o m o t e d
328 F Moulaert, E A Swyngedouw

(Leborgne and Lipietz, 1988). In this paper, we intend to focus on the determinants of
the socioeconomic and spatial processes at work in the construction and dissolution
of regimes of accumulation and their corresponding modes of regulation as they
characterize historical epochs in long-term economic development. More precisely,
we want to explore the sociospatial dynamics of technological change and innovation
during the transition from Fordist to flexible (or post-Fordist) accumulation and
regulation. In the second part of the paper, the 'regulation approach' (the approach
used by the French Regulation School) is proposed as a theoretical - methodological
scheme for the analysis of concrete changes in spatial organization during a given
historical epoch. In a third part, this approach is illustrated in terms of the current
global (re)organization of capitalist production in social space. In the fourth part
we suggest new directions in which the regulation approach might be further explored.

2 A 'regulation' approach to changes in spatial organization

The recent literature on spatial development reveals some distinct new spatial
patterns of industrial location. These patterns derive from the nature of interfirm
and intrafirm relationships, competitive strategies, and local labor-market conditions
(Cooke, 1986a; 1988; Scott, 1984a; 1984b; 1986a; 1986b; 1988a; 1988b;
Scott and Storper, 1986). They result from different dynamics:
(a) Spatial clusters of high-tech complexes, called by Stohr (1985; 1986) "territorial
innovation complexes", are formed, often in areas with little or no industrial
tradition (Swyngedouw, 1987a; 1987b).
(b) There is a combination of processes of new forms of organizational integration
of industries (for example, mergers, takeovers, joint ventures, various new forms of
collaboration and cooperation) and vertical disintegration of the production
process, accompanied by qualitative changes in its technical, social and spatial
organization (Cooke, 1986a; Sayer, 1986; Scott, 1983; 1984b; 1988b; Swyngedouw,
1987c; 1987d).
(c) Flexible production districts, organized around territorially integrated 'filieres',
have risen and been consolidated. Those flexibly specialized areas have shown an
unprecedented growth rate and remarkable resistance against crisis tendencies.
Bavaria in Germany, the Third Italy, the Kortrijk region in Belgium are among the
most cited examples of such spatioeconomic arrangements (Piore and Sabel, 1984;
Scott, 1988b; Storper and Scott, 1988).
(d) A high level of research and development (R&D) expenditures (Malecki, 1980),
both private and public (Malecki, 1981), is concentrated in a few areas and industries
(Castells, 1984; Glasmeier, 1985; Markusen et al, 1986).
(e) There has been considerable growth in terms of output, employment, gross
sales revenues, or exports in high-technology production sectors (Kendrick, 1981;
Weiss, 1983) which is, however, spatially concentrated in only a few areas (Glasmeier,
1985; OTA, 1984). Moreover, this growth is highly susceptible to cyclical boom-bust
cycles (Swyngedouw and Archer, 1986) and is unlikely to make up for jobs lost in
other industries (Markusen, 1983; Swyngedouw and Anderson, 1986; 1987).
(f) An above-average percentage of the labor force is engaged in engineering,
scientific, and technical work (Glasmeier et al, 1983a; 1983b; Schoenberger, 1984).
(g) State procurement and investments have had a determining impact on high-
technology industrial development (Dyckman and Swyngedouw, 1988).
(h) There is a tendency toward the formation of a bifurcated job-qualification
structure (Bernstein et al, 1977; Hall et al, 1983; Harrison, 1982; 1984).
(i) Service activities have grown, ranging from low-skilled, unstable, bottom-end
activities (food services, personal services, retail, low-touch administrative activities)
to highly qualified 'high-tech' services (business services, consulting, finance and
Survey Hi ;<?<>

insurance services, etc) (Milestone aiul Harrison, 1986; Gadrey et al, 1988;
Moulacrt. 1989; Noyelle. 1983). More specifically, the most advanced producer
services tend to cluster in urban areas offering agglomeration economies (Martinelli,
l W J n ) . while more standardized producer service activities may also penetrate into
less developed regions (Martinelli, 1989b; Moulacrt, 1989; Moulacrt et al, 1988).
There is some danger of reducing this list of dynamics to its 'spatial appearance",
that is, confusing the observed spatial forms with the social processes which underpin
their explanation. To avoid this danger, capitalist development should be looked at
in a structured way, as a succession of specific "ensembles of productive forces and
relations" (Scott and Storper, 1986), each of which is accompanied by rather dramatic
changes in the organization of the space-economy (see Gordon, 1978; Walker, 1981).
Our hypothesis is that the current technological revolution, which is primarily
based on microelectronics in conjunction with major institutional and organizational
changes, may constitute the core of a new epoch in the development of capitalism.
This new pattern of socioeconomic development seems to presage a new mode of
capitalist organization, including a (spatial) reorganization in the geography of
accumulation. This reorganization seems to be the result of a complex interrelationship
encompassing technological changes and overall tendencies in the organization of
production, including the social division of labor and its corresponding institutional
structure, as well as existing spatial forms.
From a methodological point of view, the regulation approach may help us capture
the tension between 'abstract theories' and 'concrete tendencies'. Although abstract
and so-called 'totalizing' interpretations suggest the existence of some topological,
evolutionary, and predetermined processes, 'concrete' approaches may overemphasize
contingent and circumstantial conditions and, in this way, inhibit the recognition of
general patterns. Solving this contradiction necessarily implies the recognition of
global patterns which are verifiable by concrete tendencies and phenomena. Global
tendencies are the structured outcome of multiple individual, atomized, and localized
actions undertaken in the face of constraints, necessities, and opportunities stemming
from the specific historical conjuncture of the accumulation process and its spatial
forms at a certain period in history. The 'regulation approach', we contend, is well
placed to capture the perceived contradiction: it relates the general primacy of the
capital valorization process to the concrete features of periods of sustained
accumulation and subsequent crisis formation. The application of the regulation
approach to the geography of socioeconomic development requires an answer to
the following key questions:
1. Why and how does a given social formation evolve from a phase of rapid
expansion to a phase of quasi-stagnation and instability?
2. How can the variability in time and space of these phases be explained?
3. Given the invariability of basic tendencies, how do we explain differences in the
appearances of crisis formation and avoidance?
4. In what ways are technological and spatial changes part and parcel of the current
process of spatial restructuring?
In sum, the main task is to explain the variability in space and time of social
and economic dynamics. T h e emergence and consolidation of a new accumulation
regime (and its spatial dynamics) have to be theorized as a qualitative change in
the organization of productive forces under capitalist relations of production.

3 The regulation approach: concepts and methodology

The 'regulation approach' is concerned to theorize: (1) the social and economic
forms that channel the contradictions resulting from previous phases of sustained
accumulation up to the moment that a major crisis arises, and (2) the development
330 F Moulaert, E A Swyngedouw

of new socioeconomic forms that result from the crisis and the actions taken by
(groups of) social agents.
Imbedded in this approach is the possibility of different forms of crisis:
(a) short 'conjunctural' crises requiring only minor adjustments (for instance,
incremental technological changes, expanding spatial divisions of labor, and
institutional adjustments);
(b) structural crises (or crises of a particular mode of development) leading to
qualitative changes in the organization of the accumulation process;
(c) crises resulting from fundamental contradictions in the capitalist mode of
production itself.
A key notion in the theory of regulation is the 'regime of accumulation'. Boyer
defines the regime of accumulation as follows:
"The ensemble of regularities that assure a general and relatively coherent
progression of the accumulation process. This coherent whole absorbs or
temporarily delays the distortions and disequilibria that are born out of the
accumulation process itself (Boyer, 1986a, page 46; our translation).
These regularities, which together constitute the economic structure of the
accumulation regime, refer to:
(1) a certain type of relationship between relations and forces of production
(technical relations and labor relations as well as their spatial emanation);
(2) a certain type of sector and market organization (market structure, modes of
competition, interindustry relations, etc);
(3) a certain distribution of produced value to assure the dynamic reproduction of
different classes and social groups and, hence, of the mode of production;
(4) a certain composition of social demand;
(5) a certain social and spatial division of labor.
An accumulation regime is further characterized by a structured ensemble of
specific institutional forms that not only codify but also steer its economic structure.
This ensemble consists of spatially and historically produced concrete forms of
organization of wage relations, competition, forms of state regulation, and insertion
in the international regime. This regulatory framework, in conjunction with the
economic structure of the accumulation regime, enables us to understand spatial
differentiation, and the concrete forms of sectoral organization as well as their
spatial behavior. It also theorizes the international system as the systematic outcome
of the interrelationship among national and supranational forms of accumulation
(such as the EEC).
The production of space, then, becomes an integral part of the accumulation
regime. Each regime produces a specific mode of spatial organization profoundly
different from the previous one. Each regime creates new or renewed forms of
spatial crisis. Cities and regions, hit by economic decline and the restructuring or
closing down of 'older' industries, are left with the social, physical, political, and
ideological characteristics associated with the 'old' mode of development. At the
same time, new territories are invaded and become social spaces producing new
forms of industrial, social, and technical structures as well as new ideological images.
The spaces constructed under the previous accumulation regimes undergo dramatic
transformation and adapt to the new exigencies. In this way, new socioeconomic
landscapes and a new territorial division of labor are created. Major changes in
infrastructure conditions (Janssen and van Hoogstraten, 1989), in forms of transaction
(both material and informational), in political regulation, and in production and
consumption patterns may be anticipated.
In turn, these changes affect spatial restructuring (linking new spaces, defining
new roles, reorienting spatial policies). Mechanisms of unequal spatial development,
Survoy lb 331

such as Smith's seesaw of unequal development (1984), find their origin in these
structural crisis generators and in the way capital searches for new favorable spatial
conditions for accumulation. The characteristics and dynamics of newly emerging
modes or organization of production, forms of technological change, and social
differentiation provide UH with concrete insights into the specific pattern of uneven
spatial development, They help us to understand why certain regions are abandoned
and others are not, why some areas are occupied and others integrated in a different
way. Moreover, new modes of industrial organization, communication, and exchange
(of commodities, labor, information) establish fresh opportunities to overcome
space and open up new spaces for production. These new modes can remove the
limitations of the 'spatial fix' which characterized previous modes of development
(Harvey, 1982). New combinations of technological and geographical displacement
emerge as responses to changing social, technical, and institutional conditions.
As we are primarily interested in understanding recent dramatic changes in the
organization of the space-economy, in the next section we will focus on the
characteristics of the postwar 'Fordisf accumulation regime and its current transition
to a 'post-Fordist' or 'flexible' accumulation regime.

4 From n Fortlist to a flexible regime of accumulation: the changing space-economy

The development of postwar urban and regional patterns in most Western countries
was strongly affected by the mechanisms that governed the postwar economic boom.
This phase of rapid and intensive accumulation (generally known as the Forclist
accumulation regime), was based on mass production in the industrial realm, and
on heavy regulatory state intervention resulting in the 'welfare state' in the political
realm (Boyer, 1986b; Lipietz, 1984; 1986). This mode of social organization
started to collapse in the late 1960s and the crisis accelerated during the 1970s as
the result of a cascade effect of interrelated actions and processes. The 1980s
showed the first signs of the construction of a new phase in the development of
capitalism, based on a growing and all-encompassing 'flexibility'. It is for this reason
that Boyer (1986c), Harvey (1987), and Swyngedouw (1987c), among others, propose
calling this the 'flexible' mode of development.
Along these lines, we argue that: (1) the postwar boom resulted in the creation
of specific urban and regional problems, while spatial policies were inspired by the
national social consensus that regulated economic expansion during that epoch;
(2) the breakdown of the Fordist regulatory mechanism is marked by major shifts
in the nature of regional crisis formation; and (3) the newly emerging mode of
politico-economic organization is accompanied by the construction of new spatial
patterns of production and by new ways of dealing with urban and regional problems.
This argument necessitates a critical evaluation of the sociospatial implications of
the new regulatory regime as well as of the political regulatory arrangements which
are part-^f it.
First, we shall address forms of spatial - regional crises under Fordism. Then,
the new patterns of spatial organization emerging from Fordist crisis formation will
be discussed. Last, a survey of those spatial trends which seem to be typical of
the flexible (or post-Fordist) regime will be presented.
4.1 Fordism and its crisis: spatial emanations
The crisis of Fordism in developed countries was partly rooted in the spatial
organization of the Fordist production process, itself the outcome of the specific
way in which the postwar accumulation regime accommodated to pre-Fordist spaces.
In much the same way, the current spatial restructuring is the concrete way the
crisis of Fordism is overcome, through, among other things, spatial rearrangements.
332 F Moulaert, E A Swyngedouw

In the postwar period, we experienced a continuous spatial expansion of Fordist

production in close concert with state policies. The dynamics of intensive
accumulation during this period centered around mass production of consumer
durables (especially cars and household equipment) and (subUrbanization. This
intensive accumulation could not be sustained in the medium to long term without
the establishment of a 'Fordist' capital-labor relationship. Fordism is characterized
by two historically and theoretically linked but relatively distinct phenomena, namely
a specific mode of accumulation and a specific mode of regulation (Lipietz, 1986,
page 26):
"The first is fordism as a mode of capital accumulation, based on the constant
upheaval of the labor process by the incorporation of workers' know-how into
the automatic system of machines. This intensive regime of accumulation is
characterized by joint growth of the productivity of labor and of the volume of
fixed capital per capita. The precondition of this type of accumulation is the
systematization of the actions of the craftsman by methods of the 'Scientific
Organization of Labor'. This stage, called 'taylorism', intensifies the polarization
between conception and execution and the polarization between technicians and
unskilled workers.
The second phenomenon is fordism as a mode of regulation, of continual
adaptation of mass consumption to productivity gains caused by intensive
accumulation. This adaptation has caused an enormous mutation of workers'
life-styles and their integration into capitalist accumulation [see also Burawoy,
1979; Edwards, 1981; Gordon et al, 1982]. It has taken the form of a network
of institutions helping to stabilize the growth of workers' nominal income and to
create monopolies in a productive structure that allows the big firms of leading
sectors to administer their prices .... All this necessitated a modification in the
role of the state and of the forms of money management."
Increasing productivity and output in the consumption goods sector influences
the internal dynamics of the capital goods sector, resulting in increased productivity
and innovation propensity in the latter. However, the continuous and necessary
search for productivity gains and output growth increases the organic composition
of capital. This, together with the tendency toward overaccumulation as (national)
markets became saturated, eroded the rate of profit. Therefore, spatial expansion
(in search of markets and a lower variable capital composition) became a necessary
prerequisite to overcome the contradictions inherent in this mode of development
(Frobel et al, 1980; Lipietz, 1982; 1983; Palloix, 1973). The resulting spatial
division of labor from the core to the periphery, both within and between nations,
resulted in a hierarchically structured production pyramid and spatially segmented
labor markets (Albrechts et al, 1984; Massey, 1984; Schoenberger, 1988).
The spatial inequalities which accompanied this specific spatial structuring of
production were partly ameliorated by the tremendous rate of increase in individual
spending power resulting from the price indexing of wages and social welfare practices.
Both the latter formed part of Keynesian state policies and were made possible by
a new regime of labor - capital regulation, a new social contract institutionalized by
continuing social negotiations embodied in an earlier form in Roosevelt's New Deal
and in the postwar history of collective bargaining and social contracts of most
West European states (Leithauser, 1986; Offe, 1985; Petit, 1986; Ward, 1986).
Thus, the national Fordist consensus, although it took on different concrete forms
in different nations (Lash and Urry, 1987), was based on growth and social welfare.
It enabled the legitimation of continuing spatial inequalities, because growth positively
affected all regions. At the same time, industrial decentralization took advantage
Sufvoy 15 333

of these inequalities by exploiting cheaper wages, lower skill, and less unionization
in peripheral areas.
By the end of the 1960s, the organizational and technical limitations of the
Fordist mode of development, along with the inherent capitalist tendencies toward
ovcruccumulation and a falling rate of profit, threatened this accumulation
regime. Investment levels started to drop and only a few years later a structural
crisis became apparent. On the international scene, there was the breakdown of
the Bretton Woods agreements, the rebirth of protective trade practices, and the
successive oil-price shocks. At the national level, industrial restructuring processes
accelerated, together with unemployment and inflation rates at two-digit levels. At
the same time, traditional Keynesian policies of debt financing (the 'subsidy* state)
were jeopardized by the growing debt crisis of most nation-states, forcing them
gradually toward austerity policies (Moulacrt and Vandenbroucke, 1983). The
internal contradictions that constituted the limits to Fordism can be summarized as
follows: (a) the contradiction between the nca\ for productivity increases and the
institutionalized capital-labor relation. Productivity problems require a technical
and social reorganization of the production process; this, however, often conflicts
with existing labor laws and collective labor-capital agreements at the corporate,
sectoral, or national level; (b) the contradiction between the need for productivity
gains and market expansion. In fact, productivity gains in an environment of slow
growth suppose wage cuts and contraction of the labor force which by themselves
have a deflationary impact; and (c) the contradiction between the Keynesian state,
the institutional balance wheel of Fordist regulation, and the entrepreneurial state
which resolve productivity problems in the production sphere.
These contradictions took on concrete spatial forms. The 'spatial fix' of giant
plants quickly reached its limits, while large parts of productive capital remained
immobilized as fixed capital. This inertia in accumulation dynamics hindered
continuous and flexible spatial responses to crisis tendencies. Indeed, the
contradiction between the need for a 'spatial fix' in reaction to the crisis and the
fixity of the built environment is actually a major constituent in accelerating the
pace of crisis formation (Harvey, 1982). Therefore it is also a major determinant of
the nature of local or regional patterns of restructuring. In turn, the immobility of
existing production complexes, together with their corresponding labor-market
structures, ideological images, and outright environmental decay, hamper a flexible
restructuring. Furthermore, the 'global scan' performed by multinational corporations
in search of 'geographic' surplus profit threatens the profit rate in existing plants
(Moulaert, 1987; Storper and Walker, 1983). This favors a strategy of spatial
relocation, capital-labor substitution or plant closure. The actual path chosen by
capital depends largely on the relative strength of the labor movement, the concurrent
role of the state, and the market orientation of the affected economic activity or sector.
Within the constraints of a given accumulation regime, efforts to overcome these
crisis tendencies are limited. This in turn necessitates periodic fundamental change
in the nature of the regime. The inherent contradictions of the capitalist mode of
production demand structural changes which transcend the rigidities of a given
regime of accumulation.
The effects of Fordist crisis formation (in terms of regional restructuring, urban
reorganization, and social movements) are by now relatively well known: massive
unemployment and social disintegration in old industrial regions, fiscal crisis of the
cities, ecological crisis, and shifting patterns of unequal regional development
(Castells, 1976; Tabb and Sawers, 1978). During the same era, a process of what
Schumpeter calls "creative destruction" took place. Traditional industries had to
334 F Moulaert, E A Swyngedouw

restructure or close down, deserting entire regions, while new 'high-tech' firms and
industries mushroomed in other areas.
These developments, in combination with consecutive defeats of the labor
movement during the 1970s and the rise of neoconservative governments in the
Western world, set the stage for the establishment of new regulatory forms.
4.2 From Fordist to post-Fordist spatial forms
The transition from Fordism to post-Fordism has brought rapid and revolutionary
technological and organizational change. But it is equally characterized by a
disruption of established social and productive relations. Indeed, the contemporary
'bunching' of new technologies (Mensch, 1979) around microelectronics enables the
satisfaction of a variety of new needs as well as major improvements in productivity
and increases in the intensity of the labor process. Moreover, the weakened
position of the working class keeps the social wage down. In conjunction with
technological change, this development restored (at least temporarily) the rate of
surplus value production (Le Bas, 1986).
However, the explosion of new technology (and the attention paid to this
phenomenon) hides a dark side. For example, the growth of sunrise industries is
accompanied by an intense growth in informal activities, requiring only average
technology and deskilled labor, as in the cases of the textile sweatshops in Paris
and Lyon (Pottier and Touati, 1984) or in New York or Los Angeles (Soja, 1985;
1989) and other low-skill and low-paid service jobs (Bluestone and Harrison, 1986;
Gill, 1985).
As these activities proliferate, the traditional urban hierarchy, based on
manufacturing industry and social and personal services, is increasingly being
replaced by a hierarchy strongly determined by the location of circulation and
producer services (banking, insurance, real estate, business services, professional
services) (Moulaert, 1989; Noyelle, 1983; Sawers and Tabb, 1984). The growth
of high-tech industrial complexes tends to turn the traditional urban hierarchy
upside down. Smaller and more remote cities, which until recently were only low-
ranking manufacturing centres, manage to attract a substantial piece of the pie.
Such factors as local social stratification, the existence of infrastructure and
facilities, lower reproduction costs for manual workers, and capital's ability to
construct space in its own image, are also playing a crucial role in the geography
of high-tech production. Although this pattern may prove valid in general terms, it
remains to explain why certain places are occupied whereas others remain deserted,
as well as why the growth of high-technology production complexes is significantly
uneven both in space and in time. Furthermore, change has to be related to global
shifts in the organization of production induced by the diffusion of new technologies
and modes of organization in the work process.
Geographic changes in the spaces of production coincide with major changes in
the organization of production (Swyngedouw, 1987d). These, in turn, are provoked
by the exigencies of the new accumulation regime. These exigencies necessitate
flexibility in production processes, product development, and in the regulation of labor
relations. The movement toward increased flexibility favors vertical disintegration,
new forms of economic partnership such as close contractor - subcontractor
relationships, continuous information exchange, and different forms of spatial
proximity (including local and regional production clusters, access to improved
communication and transportation networks, integration into existing or developing
urban systems) (Cooke, 1988). As a consequence, close monitoring of production
and circulation processes becomes easier. Moreover, spatial integration greatly
Survey H> 335

reduces the turnover time of capital as well as the value of circulating constant
capital In other words: technological linkages, networking, information and material
exchange become prime motors in accelerating the pace of innovation, The trade-
off between space and technology, typical of Fordist production, is increasingly
being replaced by an interdependence which relates space to technological change
in a very intricate way. This does not imply, however, that spatial division of labor
will no longer be relevant in competitive strategies; but spatial clustering is necessary
for fast, flexible, and competitive changes in the production process. This new
spatial form, of course, does not overcome the intrinsic contradiction between spatial
fixity and the annihilation of space by time.
In more concrete terms, the new complexes of high-tech production tend to be
dominated by a few core plants, surrounded by a host of dependent suppliers and
subcontractors/1) Nevertheless, such territorial complexes of quasi-integrated
production processes*2* make the regional economy highly sensitive to international
boom and bust cycles in the production of final goods. They also create a
pyramid of small and medium-sized industries which arc themselves highly vulnerable
to international disruptions and changes in corporate policies of the dominating
firm(s) (Holmes, 1986). These industries arc comparable with the firms belonging
to the competitive sector in O'Connor's dualistic model (1973) of the private
economy, which consists of a monopolistic and a competitive sector. Furthermore,
the labor markets of the regional or local economics hosting these complexes become
highly segmented as a consequence of the differences in labor-force requirements
of each layer in the production hierarchy. This segmentation is reinforced and
consolidated by changing state regulations concerning the organization of the labor
process, and capital-labor negotiations at the level of the plant, enterprise, or
industry. The disintegration of social resistance in turn enables reproduction of the
labor force and labor markets along these lines. However, this reproduction is not
unique. As mentioned above, changes in specific sectors at the international : scale,
as well as resistance by the regional labor force to the implementation of new
regulatory mechanisms, plus the reorientation of state regulation to meet increasing
corporate demands for flexibility, significantly influence the specific development
path of each territorial complex.

(,)
Sec, for instance, Perrin (1986; 1988) on Sophia-Antipolis; Breheny et al (1985) on the
M-4 Corridor; Saxenian (1983; 1985) and Malccki (1986) on Silicon Valley and Route 128;
Stohr(1985; 1986) on Japan; Scott (1984a; 1984b; 1988b); Cooke (1985; 1986b); Cooke
and da Rosa Pires (1985); Swyngedouw (1987a; 1987c); Sayer (1985); Camagni and
Rabellotti (1986); and Ameele (1986) on the Brussels-Zaventem Corridor).
<2) The term quasi-integrated production refers to an organizational interfirm structure
characterized by flexible integration (see Cooke, 1988). Quasi-integration can be described
as a situation in which one or a limited number of key firms control key technologies, markets,
and/or production processes (via a variety of institutional arrangements), but are surrounded
by a host of formally independent small and medium-sized subcontracting firms (see
Swyngedouw, 1987c).. These organizational structures can be found in the so-called flexible
production districts [for example, Benetton as a hollow corporation in the Third Italy, Toyota
in Japan, and the restructuring in Philips in Belgian Limburg (Swyngedouw, 1989a)]. This
flexible integration, although territorially organized, clearly transcends regional spatial boundaries
and is directly locked into the international division of labor. It is especially the latter
characteristic which is forgotten or at least underestimated in the optimistic accounts presented
by Piore and Sabel (1984). Nevertheless, this structure is a major component in the international
organization of the flexible regime of accumulation. The notion of quasi-integration breaks
with the tradition of directly linking processes of organizational disintegration with institutional
(functional) disintegration. In fact, vertical disintegration may actually coincide with institutional
or regulatory integration.
336 F Moulaert, E A Swyngedouw

Patterns of occupation or nonoccupation of specific areas can be analyzed by using

the framework described above. On one hand, characteristics of the social history
of a social formation or a region may prevent a rapid reconstruction of the labor
force along more flexible lines. O n the other hand, some regions may lack a
labor force with necessary skills or specific amenities (for example, the availability
of a basket of exploitable use-values). T h e result may b e a prolonged stage of
deprivation of many 'old' industrial or 'young' rural regions. However, state
intervention (especially through procurement policies and allocation of R&D funds)
plays a pivotal role in organizing new production spaces and, thus, in structuring
the pattern of unequal regional development. T h e movement towards a flexible
regime of accumulation inspires a re-regulation effort, focusing policy attention
toward immediately productive goals instead of toward collective consumption and
social welfare regulations (Albrechts and Swyngedouw, 1989; Moulaert, 1985).

4.3 The consolidation of a flexible accumulation regime

A comprehensive summary of post-Fordist transitions and their implications for the
economic, political, and ideological realms is provided in table 1, which reveals the
complexity and profundity of the changes and highlights some key issues.

Table 1. Fordist versus flexible regimes of accumulation: transitions in the economic, political,
and ideological realms (source: Albrechts and Swyngedouw, 1989).

Fordist Flexible

The production process

Based on economies of scale
Mass production of homogeneous products
Uniformity and standardization
Large buffer stocks and inventory
Testing quality ex-post (rejects and errors
detected late)
Rejects are concealed in buffer stocks
Loss of production time because of long
set-up times, defective parts, inventory
bottlenecks, etc
Resource driven
Vertical and (in some cases) horizontal
integration
Cost reductions through wage control
Labor
Single task performance by worker
Payment per rate (on job-design criteria)
Bureaucratic labor hierarchy
High degree of job specialization
No or only little on-the-job training
Vertical labor organization and internal
labor-market segmentation (primary and
secondary labor-market circuits)
No learning experience
Emphasis on diminishing worker's
responsibility (disciplining through pacing by
assembly line)
No job security
Based on economies of scope
Small batch production
Flexible and small batch production of a
variety of product types (flexible automation)
No stocks
Quality control part of the production process
(immediate detection of errors)
Immediate rejection of defective parts
Reduction of lost time; diminishing 'the
porosity of the working day'
Demand driven
(Quasi-(vertical integration or vertical
disintegration
Learning-by-doing integrated in long-term
planning
Multiple tasks
Personal payment (detailed bonus system)
Individualized promotion schemes
Elimination of job demarcation
Continuous on-the-job training
More horizontal labor organization for core
workers
On-the-job learning
Emphasis on worker's coresponsibility
(disciplining through cooptation of core
workers)
High employment security for core workers;
no job security and poor labor conditions
for temporary workers; increasing informal
activities
Survey IB 337

Table I (continued).
?
Fo rdist tcxiblc

Spavv
Functional spatial hierarchy
Spatial division of labor
flomogcnization of regional labor markets
(spatially segmented labor markets)
Worldwide soureing of components and
subcontractors
Organization of the space of consumption
through suburbanization
Selective soeiospaiial integration
State
Collective bargaining
Socialization of welfare (the welfare state)
International stability through multilateral
agreements
Centralization
The 'subsidy' state or city
Indirect intervention in markets through
income and price policies
National regional policies
Firm-financed research and development
Industry-led innovation
Ideology
Mass consumption of consumer durables:
the consumption society
Modernism
Totality or structural reform
Socialization
Spatial clustering and agglomeration
Spatial integration or division of labor
Labor-market diversification (in-ptacc labor-
market segmentation)
Spatial proximity of vertically quasi-
integrated firms; formation of regionally
specialized 'filieres*
Organization of the space of consumption
through urban centralization (the spectacle
city)
Polarization of the social use of urban space
Division or individualization; local or firm-
based negotiations
Privatization of collective needs and social
security; the \soupkitchen state'
International destabiiization; increased
geopolitical tensions
Decentralization and sharpened interregional
or intercity conflicts
The 'entrepreneurial' state or city
Extensive direct state intervention in markets
through procurement
Territorial* regional policies (third-party form)
State-financed research and development
State-led innovation
Individualized consumption: 'yuppic'-culturc
Postmodernism
Specificity or adaptation
Individualization; the 'spectacle' society

4.3.1 A flexible production and circulation system The introduction of flexible

production techniques and a variety of new products (goods as well as services)
entailed a reorganization of the entire production process to make it more flexible.
This greater flexibility is itself the outcome of crisis within the Fordist accumulation
regime. Indeed, it can be argued that the introduction of flexible automation shortens
overall production time and, in consequence, the turnover-time of capital. It also
speeds up the use of machinery (in other words, the transfer of value from machine
to product) and thus the machinery's rate of obsolescence. Stricter planning of the
production process (on a very short-term basis) increases the intensity of the labor
process. At the same time, built-in quality control reduces the socially necessary
labor time (through a dramatic decline in rejects). Substantial contraction of stocks
through close monitoring reduces the value of circulating constant capital. Beside
the obvious advantages of subcontracting and vertical disintegration—in terms of
labor-market segmentation and the role of the lowest echelons in the production
hierarchy as market shock absorbers—the circulation speed of capital can be
greatly increased, while, again, use of machinery for specialized production can be
intensified. The need for continuous innovation and, thus, expanded R&D results
338 F Moulaert, E A Swyngedouw

in an integration of R&D functions within the organizational structure of these new

'filieres'. In short, for the first time in the history of capitalism, it seems possible
to combine flexibility with high productivity or, in other words, to combine
technologically harnessed labor with product and process diversification. The pressure
for innovation and the circulation of material flows promote spatial clustering of
interrelated high-tech and other production firms, which remain, nevertheless, integrated
in the world economy through a host of logistical, market, or financial linkages.
The introduction of flexible production requires a profound reorganization of
the production and circulation functions within the economy. In turn, this means a
revolution in corporate strategy, strategic planning, and day-to-day management of
corporations and their control hierarchy. The spectacular progress of computer
and telecommunication technology allows for a strong expansion of management
information systems. Taken together, these developments, along with the rise of
new service use-values in the consumption sphere, have given an enormous impetus
to the 'tertiarization' of the economy and its production system (Gadrey et al, 1988;
Martinelli, 1989a; 1989b).
4.3.2 A flexible labor force Changes in the organization of production and the creation
of new use-values are only part of the process of countering the Fordist crisis.
Reorganization of the labor process is central to the strategy of overcoming crisis
tendencies. This reorganization creates new contradictions because of the automation
of mental labor and the increased reliance on effective 'collaboration' with the work
force to permit a more flexible and intensive use of labor in production. It also
demands new mechanisms of control and disciplining. A high reserve army of
unemployed may act as an external disciplining device; and the disintegration of
larger into smaller production units, or the introduction of new and individualized
labor contracts and merit-based bonus systems, may undermine workers' collective
responses.
4.3.3 Spatial integration The integration of all functions of the production process
(R&D, management, organization of the production process, organization of the
labor process, and labor relations) demands close monitoring of the entire
production process. This puts a premium on the spatial integration of functional
firm levels (greater autonomy for branches) and/or on an improved transactional
structure. Services, in a way comparable with the functional clustering in the
manufacturing production sphere, have concentrated in space in a hierarchical
manner (Martinelli, 1986; Moulaert et al, 1988).
4.3.4 State regulation This combined system of social and technological reorganization
of production and the expansion of new use-values have led to a restoration of the
profit rate in the "lieux de valorisation" (Mathias and Salama, 1983). Yet the problem
of realization (or of overaccumulation) will remain unsolved in the absence of
regulatory mechanisms to attune social demand to new practices. Of course, high-
income segments of the labor force continue to be the basis for diversified
consumption. But the state will have to play an increasingly important role in
guaranteeing markets (through procurement or other guarantees). This, in turn, will
affect the distribution of social demand over the various layers of society and entails
a shift from a Keynesian 'subsidy' or 'welfare' state to an entrepreneurial state.
Regardless of the spatial implications (such as increased interregional competition),
new contradictions in regulating collective consumption are likely to occur.
At the level of social formations, the collapse of the welfare state negatively affects
redistribution mechanisms and undermines the solidarity principle of Keynesian
postwar society. In the economic realm, the creation of vertically quasi-integrated
Survey 15 339

complexes tends to segment regional labor markets and leads to the emergence of
a highly diversified, socially bifurcated social structure. The entrepreneurial state
favors this process by deregulating and decentralizing the institutional forms of
Fordist wage-labor relations, and by liberalizing private capital initiatives in regional
or local "licux de valorisation" (see Mouiaert and Wilson, 1989; Moulaert et al, 1988).
Several measures are taken in support of this purpose: (a) deregulation of social
security laws and corresponding administrative practices; (b) acceptance of a
quasi-informal economy; (c) state support to profitable instead of less profitable
investment projects (through tax cuts, the establishing of enterprise zones, special
schemes to promote high-tech projects, etc); (d) decentralization of state powers to
intervene in the valorization of capital to regional and local levels of decisionmaking.
Although traditional state support schemes have remained in effect (but are
increasingly less used), the last decade has been characterized by a flood of
initiatives to 'promote' developments believed to accelerate the changes outlined
above. This is not only witnessed on a national scale; regions and cities are also
in the game of adapting to the post-Fordist era. Their re-regulation efforts focus
policy attention toward short-run and long-run productive goals instead of toward
collective consumption and social welfare (Swyngcdouw, 1989a).
The on-going transformation of the whole social fabric toward a new institutional-
regulatory framework leads to the replacement of the 'welfare state': by an
'entrepreneurial state' for the well-to-do'; and by a 'soupkitchen state' for those
caught in the doldrums of persistent unemployment or those unable to adapt to
new standards in the capital accumulation process. The latter form a minority in
'democracy1, so that their chances of obtaining an improvement in their situation
through legal means are slight.
4.3,5 Sociocultural reproduction: ideology and lifestyle The reorganized socioeconomic
mode of development coincides with the emergence of a new urban life-style and
imagery, and distilled in new consumption patterns (Albertsen, 1988; Harvey, 1989).
The new ideology is accompanied by an individualized social and cultural scene
and by a particular reconstruction of the built environment. The latter physically
reflects the heritage of former eras, but is occupied by a new class of urban
dwellers. It is alienated from the cultural and ideological identity of its original
(usually working-class) roots. The new class of urban dwellers are the bearers of a
'postmodern' ideology, based on individualism in consumption behavior, a disjoint
appreciation of aesthetics, and a 'yuppie' culture. They have inspired scholars to
announce the end of the urban crisis (see Harvey, 1987), and to talk about the
'revitalization of the urban center'. The materialization of this ideology tends to
concentrate on the fulfilment of the expanding and varied consumption demands of
the new urban dwellers and to satisfy their taste for new urban 'spectacles'. Examples
of this are manifold: the inner-harbor renovation complexes in Baltimore, Boston, and
Liverpool (with its international garden city festival); renovated industrial complexes
turned into high-class malls (Liverpool, Roubaix), fashionable cultural centres
(Brussels), or expensive condominiums; fancy inner-city renovations as in Antwerp
and Lille; and outright 'spectacles' such as Les Halles, Centre Pompidou and the
Louvre pyramid in Paris, golf terrains in Flanders, or, for that matter, the struggle
(won by Barcelona) to obtain the right to stage the 1992 Olympic Summer Games.

5 Theory of regulation: a critique

Analysis of the interplay between regime of accumulation and mode of regulation
in the flexible or post-Fordist production era has just started. Until now it has
focused on: (a) the role of the new technological systems in (re)structuring production
340 F Moulaert, E A Swyngedouw

processes and capital - labor relations; (b) the institutional forms adopted for the
regulation of labor; (c) state regulation with respect to capital innovation, market
liberalization, the wage-labor relation, and administrative control; and (d) the
(re)production of social space.
Not all four focuses have been developed equally and some are dominated by
others. There is a tendency in the literature toward technological determinism, that
is, to explain the reorganization of production process, the segmentation and
flexibilization of labor as dictated by technological exigencies. There is also a
tendency to reduce regulation to state regulation. In reality, however, there is an
interplay between technological systems and social forces. New technologies are
introduced in concrete social organizations, so that technological trajectories and
the way they are socially embodied differ significantly among organizations.
Moreover, regulation involves more than just state regulation, but also implies
regulation by other institutions, formal or informal.
Spatial analysis traditionally devotes particular attention to the differences
between socioeconomic structures of territories and regions. In this discipline too,
scholars are seduced by the power of new technological systems to structure labor,
production and circulation networks, and territorial communities into technically
defined professional classes with their own life-styles. This might lead to an
oversimplified classification of the geographic forms which are produced under the
new regime of accumulation. Walker (1988) warns against such simplification and
recommends a revalorization of the organizational dynamics which constitute the
history of production and circulation spaces.
It is our conviction that a broader definition of regulation and regulatory forms
might transform regulation theory into a powerful tool to study organizational
dynamics in the construction of social spaces. As argued elsewhere (Moulaert,
1987), regulation theory contains a number of bridgeheads to deal with regulatory
forms other than the state: the market (as part of the accumulation regime),
professional institutions (organizations, deontological rules), social and cultural
organizations, ethical norms, and formal and informal custom formation (for example,
see Albertsen, 1988). These bridgeheads can be fully developed by reasserting the
status of the 'mode of consumption' in defining the regime of accumulation. In
fact, the 'mode of consumption' has been understated in the regulation approach in
favor of the concept of 'regime of accumulation'. Consequently, consumption norms
and consumer reference systems, which play an important part in the regulation of
demand patterns, have been omitted. But reassertion of the 'mode of consumption'
can have an even greater impact on the regulation approach. From the mode of
consumption, it is only a small step to the 'mode of reproduction'. The dynamics
of the mode of reproduction are assured by a number of social and cultural
institutions (family, educational system, religion, etc) regulating what Markusen calls
the "reproduction of people" (as a complement to the 'reproduction of labor').
Overemphasizing the technico-organizational structure of flexible accumulation
tends toward an implicit or explicit economism. It often results in a pure economic -
functionalist interpretation of change in the socioinstitutional and regulatory framework
(for a critique, see Amin and Robins, 1989). The core of the regulation approach
is to understand how regulatory and institutional forms arise in particular places,
and how these forms relate to and are influenced by new patterns of accumulation.
The global mode of development is the outcome of a combination of economic and
institutional forms. Regulation refers to the mechanism of control in the production-
consumption linkage; therefore, regulation is always functional in terms of organizing
this linkage. This does not imply, however, that the institutional organization can
be simply read off from the dynamics of capitalist accumulation; on the contrary,
Survey 15 341

the dynamics of accumulation work through the combination of economic and

institutional forms. The characteristics of crisis within capitalism arc themselves
the outcome of the particular intertwining of institutional and economic forms.
These crises require successive upheavals in the economic-institutional organization.
The task ahead is to reconstruct the space-history of Fordist regulation and
organization; how it resulted in the formation of a globally dominant system
integrating highly uneven spaces during the postwar years; and exactly how this
spatial unevenness finally resulted in the breakdown of the Fordist regime of
accumulation. Further how did the particular spatial forms of global Fordist crisis
result in a set of specific spatial economic-institutional responses which, in turn,
reconstructed the functioning of the capitalist mode of production on a global
scale. There is no contradiction here between the formulation of metatheoretical
propositions and the empirical observation of spatial differentiation or local
uniqueness. It is something else, however, to dismiss metatheoretical explanation
on the basis of the existence of spatial differentiation. As argued elsewhere
(Swyngedouw, 1989b), the deepening of spatial differentiation, in the context of
(a) an increasingly intertwined and extremely mobile global system and (b) a
volatile regulatory environment, may well be one of the key global results of the
transition from Fordism to flexibility.
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