REGIONAL ECONOMIC POLICY AND THE LONG-RUN: INNOVATION AND LOCATION IN THE IRON AND STEEL INDUSTRY.

Major technological changes are currently planned in an investment programme for the British steel industry. The relatively inefficient open-hearth technology is to be made redundant and production concentrated in large-scale plants employing the basic oxygen process. Further, rich foreign ores are more cheaply transported in large bulk carriers and therefore, production costs will be lowest at integrated plants with ready access to deep water ports. The impact of innovation must have consequences for the geographical distribution of the steel industry's workforce, irrespective of whether it foreshadows a change in the capital-labour ratio and/or in the total labour requirements. The British Steel Corp. and the government recognize that, the concentration of modern steelmaking at a few large works mean that older and smaller units at less suitable sites must be phased out, with the loss of the jobs in them. However, the proposed development strategy is, in the government's judgement, the course best calculated to assure for Great Britain an efficient, profitable, modern industry able to compete with the rest of the world and to assure future employment. In fact, given that the technological development of the British steel industry lags behind many of its competitors, it is perhaps surprising that innovation was not introduced earlier.