Competitiveness by Design: An Institutionalist Perspective on the Resurgence of a “Mature” Industry in a High-Wage Economy

In the midst of the widespread, long-term economic downturn throughout the Canadian manufacturing landscape, the contract (or office) furniture sector has demonstrated resilience and vibrancy. The study reported here investigated the institutional foundations of innovation and competitive advantage in this dynamic, design-led, export-oriented manufacturing sector. It connects to ongoing work in economic geography and the social sciences to enhance economic geographers’ understanding of the role of institutions in shaping the practices of firms and competitive outcomes and seeks to advance a more agency-centered institutionalist economic geography. The study focused on three dimensions of industrial practices: (1) the use of training and investments in technology, (2) the nature of employment relations, and (3) the use of design. The analysis reveals that the most globally competitive firms operating in a Canadian institutional context prosper by learning a set of production practices and the value of design-intensive products from the embodied knowledge of their founders, who have lived, studied and worked in high-wage, coordinated market economies of continental Europe. The ability of these entrepreneurs to transfer industrial knowledge from continental Europe to Canada has had direct benefits for learning and innovation processes that are critical to the synthetic knowledge base of this sector. The empirical analysis entails a sector wide survey questionnaire (N = 220) as well as 55 in-depth interviews with senior managers, production workers, and designers from a subset of leading firms.