The integration of high tech industry in a local economy: A study of linkage structure in the Chicago region

The study focused on two objectives: first, to investigate the degree of local integration exhibited by a sample of high tech plants located within the Chicago metropolitan region; second, to establish the determinants of the variation in the degree of local integration exhibited by the high tech plants. The strength of local integration was estimated by an analysis of plant linkage structure, both forward and backward.Primary data was collected for the study using a mail questionnaire survey method. The data revealed that the high tech plants surveyed were strongly integrated with their local economy, and disproved the generally held belief that high tech plants act as an enclave sector within a region. A qualitative analysis of purchase patterns suggested that Chicago's high tech plants purchase many "high tech" inputs from existing high tech core areas outside the Chicago region, while purchasing predominantly "low tech" inputs from local sources. An OLS regression analysis was undertaken to establish the determinants of the strength of local integration exhibited by the plants. A number of plant characteristics were adopted as explanatory variables. The analysis found that plants purchasing predominately from the local economy were small in size, young, producing custom products, and relatively technology intensive. Alternatively, plants selling predominately within the local economy were small, single/independently owned plants, producing custom products. It is suggested that the findings of the models may prove useful to economic development agencies is targeting those plants that they may find attractive for generating growth in their local economy.The study concludes by suggesting that high tech plants are very complex organizations and that to fully understand such establishments more in depth case studies are needed, both sectorally and geographically. Only from such case studies can the behavior of high tech firms be more fully comprehended and their implications for development uncovered.U of I OnlyETDs are only available to UIUC Users without author permissio