Projects

Policy, innovation: Historical Perspectives

Project Description

Our research will utilize a variety of techniques developed by business historians to analyze industries, firms, and economic policy. In preparing a macro-level survey of major developments and watersheds, for instance, we will draw primarily upon the records of industry trade associations, including the extensive runs of trade journals available at the Institute of Paper Science and Technology (see attached bibliography), and upon federal government records such as those of the Federal Trade Commission. Preliminary surveys have already identified several useful summaries available in these sources, which we will supplement with a variety of published studies identified in the bibliography. A reading of the trade literature has also pointed us toward key moments of transition, such as the shift toward absorbent materials and building supplies that followed World War I.

In developing more detailed case studies of particular firms and transitions, we will supplement the trade literature with materials from a variety of sources. These include corporate archives and papers of key figures available in various historical repositories. Preliminary surveys have identified important bodies of material pertaining to the twenties and thirties at the Wisconsin Historical Society (the Everest papers), Cornell University (the Westvaco papers), the Weyerhauser Archives in Seattle-Tacoma (which are especially strong on legislative materials), Duke University (the Forest Historical Society), and the Hagley Museum and Library (which has a large collection pertaining to papermaking and also possesses records of the FTC and the National Association of Manufacturing). We also plan to consult state archives in Georgia, Washington, and Maine for materials pertaining to state regulatory activities. We are confident that such resources will point the way to especially useful case studies that will illuminate in greater detail the transformations identified in our survey. As with all research of this nature, the precise path of research will not become clear until we examine materials more closely.

For the more recent period, we plan to make particular use of two resources available to us in Georgia. The Carter Center, located in Atlanta, contains a variety of materials pertaining to environmental and economic policy at a key moment in the development of modern American political economy. We will incorporate an international comparative dimension into our research largely through use of government documents and trade literature available at IPST (see bibliography). Our principal research assistant, who is Finnish, has language skills and experience in studying nationalized industries that should be of enormous utility in this aspect of our research.

Our research seeks ultimately to generate detailed studies of behavior at the level of individual firms. As a first step toward that aim, we will during the first month of the project conduct a thorough preliminary survey of historical records. During this same period we will complete an overview of major developments in the regulatory history of the paper industry, building upon previous reading in the secondary literature. As part of this exercise, we will consult with our Industry Liaison Panel including Dr. Art Dreshfield and other key figures in the industry. In addition to providing valuable perspective, these contacts will hopefully point us toward additional sources of business records.

With these two surveys in hand, we will during the first year concentrate on generating a detailed study of one significant regulatory episode in the history of the industry. At present, we anticipate that this first study will focus on the period from World War I into the mid-thirties. This was a period of significant structural change in the industry accompanied by new regulation, including significant activity pertaining to antitrust and tariffs. Much attention focused on production, pricing, and standardization (a subject we believe deserves further analysis). But this period also saw some movement toward product differentiation, with introduction of new absorbent papers. The period was also one of significant labor activity. These features make the period especially resonant with current conditions in the industry. Early findings, moreover, suggest that rich records exist documenting events at the level of individual firms as well as at the industry-wide level and in government. We plan by the summer of 2002 to have a draft of at least100 typescript pages pertaining to this topic. This will be the primary task of our principal research assistant, Hannes Toivanen, working under the supervision of Usselman. Toivanen is already deeply involved in this project and is currently scheduling trips to relevant archives at Cornell, the Wisconsin State Historical Society, and the Weyerhauser Corporation in Seattle.

While targeting the twenties and thirties for particular focus, we plan also during this first year to lay the groundwork for two additional detailed studies. The first of these will likely concentrate on developments during the fifties, sixties, and early seventies. We are drawn to this period by three features: 1) a new round of attention to antitrust; 2) the beginnings of environmental regulation; and 3) the beginnings of a shift in geographic location toward the South. We need during this first year to identify opportunities for detailed, firm-level study of these developments. Usselman will assume primary responsibility for this task during the first year, with a research assistant under his supervision embarking on the detailed program of study during the second and third years. We anticipate that this element of the project will generate additional draft reports during the second and third years.

In addition to charting this second archival study, we plan to organize an ethnographic investigation of developments at one or two mills in Georgia during recent decades. Giebelhaus, working with members of the Industry Liaison Panel and contacts at the mills, will take primary responsibility for this task during the first year. We propose, for example, to incorporate a case study of the affects of environmental policy regulation on the Rome, Georgia plant of the Inland Paper Company. Through direct observational research with the managerial staff and environmental compliance officer of this facility, we hope to disentangle the relationships between state, local, and federal policy and corporate decision making over time. The study will go forward during the second and third years under supervision of both Giebelhaus and Usselman. We cannot yet specify the outcomes we anticipate from this aspect of the project, but the research should dovetail nicely with CPBIS research proposal B-4, "Integrated Environmental and Economic Performance Monitoring of a Paper Manufacturing Facility" (Bras, McGinnis, and Zhou).

Sometime during the second year, we will begin presenting preliminary results from our first detailed study at professional conferences. We should also submit at least one essay for scholarly publication during that year. Additional presentations and papers should follow in due course as we complete subsequent studies. By the end of the third year, we should have completed a preliminary draft of a book manuscript and secured a publisher.

As this project unfolds, the co-PIs will seek to incorporate findings into educational endeavors, such as development of modules for undergraduate and graduate teaching. The PIs are well positioned to conduct such activity, as one has responsibility for coordinating CPBIS educational initiatives and the other coordinates graduate programs in a unit of great relevance to the mission of the Center. Materials generated during the first year should be "course ready" by Fall 2002. Additional modules will appear within a similar time frame in subsequent years as the results become available.

In addition to providing valuable new perspectives on the pulp and paper industry, our research will contribute in a variety of ways to the growing body of research aimed at comprehending how government policies and firm strategies have influenced the course of technical change, the competitiveness of industries, and, ultimately, the public good.

Both the macro-level survey and the case studies should tell us a great deal, for instance, about how firms and industries learn and develop technical competencies. Our findings should, in particular, shed new light on the relationship between individual competitive units and industry-wide associations in the learning and innovation process (Fligstein, 1990; DeBresson and Walker, 1991; Galambos and Sewell, 1995; Mowery and Nelson, 1999). We hope also to comprehend how local and regional knowledge complements or conflicts with broader programs of research conducted at the national and firm level (Nelson, 1993 and Wright, 1999). In this way, our study will fit within a vibrant body of literature pertaining to the organization of innovation (Lamoreaux, et.al., 1999).

Our work promises also to open important insights into the emergence and impact of economic policy during the twentieth century. Recently, for instance, scholars from a variety of disciplines have sought to assess how antitrust not only shaped competition, but also served to refocus innovative activities, often in unanticipated ways (Temin, 1987; Hovenkamp, 1989 and 1995; Mueller, 1996; Usselman, 1996, 1999, and 2000; Fischer, 2000). Our research will seek actively to address this issue in a prominent industry across time.

By pursuing this theme across several decades, we hope also to gain new insights into how policies aimed at fostering competitiveness within American industry were altered by changing attitudes and economic circumstances. In particular, we see in the pulp and paper industry particularly rich opportunities first to examine how antitrust and deregulation coexisted with heightened concern for the environment and worker safety during the seventies, then to trace how that mix of policies took on still a different cast as Americans grew concerned about international competitiveness during the eighties. Our study will thus help elucidate the inherent tensions between the concern with protecting workers and the environment and the desire to promote economic competitiveness in a global context.

As with our analysis of business strategy and firm behavior, our studies of government policy should contribute especially valuable insights into the ways in which local and regional regulation interfaced with activities at the national level. As such, it will fit within bodies of research pertaining to American federalism and to the importance of policy in fostering regional economic development (Freyer, 1992).

We plan to make these results known to the academic community through a variety of publications and presentations. Our project should result in a comprehensive history written initially as a doctoral dissertation and published subsequently by a major academic press. Findings will be incorporated as well into the ongoing series of studies by Usselman into the role of government in structuring technological innovation in the American context. We anticipate presenting our findings at national and international conferences to business and economic historians, to legal and policy historians, to historians of technology and to scholars interested in organizational behavior and the dynamics of technical innovation.

The authors of this proposal believe in the power of historical analysis to provide concrete lessons from past experience to help formulate future policy. By clarifying our understanding of the competitive structure of the pulp and paper industry, and its relations with state, local, and federal government, we believe that the industry will be in a better position to adapt and integrate its actions in the arenas of policy, competitive positioning, and technological innovation.

The compilation of an integrated history of the pulp and paper industry focusing on changes in competitive structure which link those changes to the course of innovation will provide a valuable tool to the industry. Industry leaders may use this information, for example, to create a matrix of decision-making tools that will allow it to be more responsive in the future to changes in product and product innovation and the regulatory environment. More specifically, a greater understanding of change over time will provide insights into enterprise pressures emanating from the antitrust or regulatory quarters (e.g. issues related to environmental compliance).

Through direct observational research with officials at the Rome, Georgia, production facility of the Inland Paper Corporation the team will have an opportunity to investigate directly a host of issues related to environmental compliance. This will be an opportunity to reconstruct a story of the tangle of state, local, and federal requirements and how compliance with these policies has shaped corporate policy decisions in the past. The combining of this observational approach with the broader investigation of the interaction of regulatory policy in pulp and paper will constitute an innovative and valuable analytical case study.

Industry leaders and government officials who currently face major issues in the paper industry dealing with restructuring, regulation, and innovation will gain valuable insights from the results of this historically based inquiry.

Duration: 3 years