Regional dynamics of manufacturing and non-manufacturing investment in Canada

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Abstract
Gertler M. S. (1986) Regional dynamics of manufacturing and non-manufacturing investment in Canada, Reg. Studies 20, 523–534. Much has been made of the recent structural changes in national and regional economies in which non-manufacturing activities have become increasingly important providers of employment. Yet, traditional models of local economies have long implied that manufacturing activity is the propulsive force in cities and regions. This paper seeks to determine the changing importance of manufacturing versus non-manufacturing investment in local and regional economies. The analysis focuses on two interrelated questions. First, how prominent are manufacturing and non-manufacturing sectors in particular locations and how has this relative prominence changed over time? Second, how consistently does manufacturing investment drive capital accumulation in other sectors of the local/regional economy? An empirical analysis is performed for ten provinces and fifteen metropolitan areas in Canada over the period 1955 to 1983. Manufacturing continues to contribute a major proportion of total private capital accumulation and consistently leads investment in other sectors of metropolitan economies. This implies that technological change has involved the replacement of labour with capital over time.

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