The Producer Service Complex of Edmonton: The Role and Organization of Producer Services Firms in a Peripheral City

Abstract

In this paper the authors examine the subcontracting behaviour of producer service firms in a peripheral metropolitan city. The objective of this empirical investigation is to uncover spatial and organizational linkages of producer services that have developed in response to changes in the industrial organization of a modern capitalist production system. The focus is on three types of linkages, namely subcontracting, inputs of producer services, and inputs of goods and final services. The data collected through a survey of producer services in Edmonton reveal that subcontracting rather than internalization is the main mode of production. Therefore the producer service sector can play an important role as a supplier of indigenous higher-order services and innovations, inducing better productivity rates in other industrial sectors including resource-oriented local producers.

Are advanced producer services connectors for regional economies? An exploration of the geographies of advanced producer service procurement in Belgium

“…In this context, the business networks and linkages between APS firms and their consumers are part of a much broader dynamic involving vertical disintegration and the new geographies this brings about (Michalak and Fairbairn, 1993;Thierstein et al, 2008; for an overview, see Bryson et al, 2004). As a corollary, firms providing APS have in part flourished because of vertical disintegration (i.e., the outsourcing of management consultancy and advertising), and have purportedly become part of large regional production complexes that are increasingly functioning as the territorial platforms for entering global markets.…”

Geographies of Subcontracting

“…For Michalak and Fairbairn (1993), their analysis of producer services in Edmonton, Canada reveals that ‘technical and non‐routine types of producer services’ (e.g. engineering consulting and design services, computer programming, and data‐processing services) are more prone to subcontract than ‘routine and standardized producer services’ (e.g.…”

“…legal advice, auditing and employment placement services). Although, for the former group of firms, the desire to maintain high flexibility is one of the primary reasons for subcontracting; their study suggests that ‘flexible organizational structure’, afforded by (amongst other things) subcontracting, ‘is not universally shared by all types of producer services (Michalak and Fairbairn 1993: 770).…”

“…To elaborate, it is ''an actual contract between the two participating firms setting out the specifications for the order'' (Holmes 1986: 84). These contracts, which can formal or informal, include production, service support (Michalak and Fairbairn 1993), research and design (MacPherson 1988;Suarez-Villa and Karlsson 1996) and even resource extraction (Prudham 2002). Clearly, the nature of subcontracting as a mode of economic production and a vertical disintegration strategy varies dramatically across different industries, spatial scales, places and impacts (Imrie 1986).…”

Entrepreneurship and Extraregional Trade in the Producer Services

“…At the other end of the continuum lie more risk-averse behaviors like collusion, franchising, subcontracting, and networking. Corporate networking is widely recognized in the manufacturing literature (Beije and Groenewegen 1992;MacPherson 1994;Young and Francis 1991), as well as in producer services (Coffey and Polese 1987;Michalak and Fairburn 1993;Schmenner 1986), as a means by which one firm can gain access to the markets of other firms. The upshot of these behaviors is a breakdown in any regular geography of trade in services.…”