148 SECTIONAL ADDRESSES 



about the comparative efficiency of large or small firms supplying current,^ ^ 

 but the policy of uniformity has, according to all competent observers,*" 

 led to great savings in equipment by massing reserve capacity in central 

 hands. 



§ 6. To Sum Up. 



Hovs? far is economic research helpful to current industrial policy in 

 determining the optimum, most efficient, site, size and scope of industrial 

 organisations ? 



1. The first conclusion to be reached is that the methods of realistic 

 economic research that try to check theory by observed fact are still in 

 the imperfect tense. Index measures of size, scope and concentration of 

 sites are being devised, tests of the efficiency of degrees of size, scope and 

 site concentration are being worked out, and the conditions where various 

 degrees of size, scope and site concentration may be found efficient are, 

 very imperfectly, being discovered. But this research is, I believe, on 

 helpful lines. It does take account of all the facts without assuming other 

 things equal ; it does necessitate a grasp of the real complexities of the 

 industrial situation without inventing hypothetical cases ; and it does 

 aim at expressing its discoveries in specific terms and fairly exact measured 

 degrees. 



2. The discovery about industrial structure that is preliminary to all 

 others is its diversity requiring, probably, diverse policies. Different 

 industries have vastly different sorts of site, size of firms and plants, and 

 scope. This diversity is also true within most industries ; yet the sum- 

 mary measures devised by statistics show that individual industries 

 usually have some prevailing sort of site, size and scope. Thus electrical 

 engineering has predominantly large plants, associated with high mechan- 

 isation ; pottery has predominantly medium-sized plants and high localisa- 

 tion ; the ' dealing ' or distributive trades small plants and low localisation. 

 So many industries follow each of these three examples not only in Britain 

 but also in America and Germany that it is permissible to speak of three 

 types to each of which a common policy can perhaps be applied. 



3. If tests of efficiency beyond the mere predominance or prevalence of 

 a type be also consulted, it appears that in most manufacturing industries 

 there is little sign of a limit to size of plant or firm, though there are signs 

 that with the changing importance of the marketing and the production 

 factors, the growth of localised industries may now halt. Some industries 

 are absolutely dependent on local raw material or skill and are marked 

 by a very high coefficient of localisation. But the policy of developing 

 fairly localisable manufacturing industries away from their original sites 

 may be justified as a short cut to a position that would be reached by 

 economic forces anyway, but only after many and wasteful trials and 

 errors. The newer site of the industry must not, of course, be just any- 

 where away from the old site. It should be carefully selected by research 

 inter alia into the industry's previous development there (measured by 



^' P. E. P. Report on Electricity , 1937. 



*" G. Haldane in Public Enterprise, ed. Robson, p. 129. 



