Radio Shack declared bankruptcy today.
In a way it’s a funeral for the American consumer electronics industry. Though the slow death of the American electonics industry has been happening for some time, like many other industries here in America, the consumer electronics industry died the slow death, as company by company the factories closed and people went elswhere for their stuff. There are many reasons this happened. We can look at big company sterility, high business taxes making American companies vulnerable to takeover from foreign companies not carrying the tax burden or Larry the liquidator types selling things off for a fast buck. None of these things would matter if the companies that went away were replaced by innovative new companies making new stuff here. Why that didn’t happen leads to a question.
Did David Rockefeller kill the American consumer electronics industry? I asked myself this because I was reading about radio row recently. Now from the late 1920’s to the mid 1960’s radio row in New York City was the place to go for the latest audio and radio gear. Here it is in it’s early days:
By the late 1940’s the area for six square blocks was filled with strores not only selling radios, but all the parts and equipment to build radios and audio equipment. The area was world famous as the go to place for electronics.
This is what is known as a business cluster: http://en.wikipedia.org/wiki/Business_cluster
Technologies tend to evolve these clusters. There are distinct advantages to having several enterprises in the same technology close together. They can share workers and cross fertilize to produce new ideas. They also help to avoid the echo chamber effect that causes companies to create so many bad products. They also provide new life for the recycled leftovers that inevitably happen.
For Nineteenth Century New England it was clocks and watches, along with the toolmaking cluster,the gunmaking cluster and the machine tool cluster because hing tech machine tools were needed to make the other stuff. All of these clusters were why Souhern New England was an economic powerhouse from the 19th Century through the mid 20th Century.
As a cluster Radio Row was a tremendous asset. Many of the distributers and manufacturers that are still electronics powerhouses got their start. Radio Row spun off companies large and small as innovators created new products from the stuff in bins and behind the counters. Having all the parts there ready to grab makes product development so much easier. When you have the the parts the rest becomes easy. In a company, that’s usually not a problem. The place I’ve worked at had stuff in parts bins galore. At least to the stuff related to say, analytical instruments. But for something else that I might want to make, it’s not so easy. There’s no place I can go and just scrounge for parts and ideas.
For an idea of what that may be like, lets go to Japan. Specifically lets go to Akihabara. Akihabara is a district of Tokyo two stops above Tokyo Station on the Yamanote Line. The district started as a vedgetable market that evolved into a black market which evolve into a market for radio and electronic goods. More importantly, all sorts of small stores selling supplies and parts for electronics opened up in the warrens underneath the railroad tracks.
Akihabara was fed by an army of small factories that can still to this day make small runs of parts for your projects and get you started. This is invaluable for startups.
The same sort of attitude has also evolved in China.
Here in the US, though, it seems that we have been blinded by big. Unfortunately that has been expensive. We are losing manufacturing diversity because the creative infrastructure is disappearing.
Why did such a great thing as radio row disappear. Well it happened to be in the wrong place, being just South of the Hudson and Manhattan Tube Station in the south end of Manhattan. The same station that became part of David Rockefeller’s plan to “revitalize” southern Manhattan with a massive new office project spearheaded by the Port Authority of NY and NJ called the World Trade Center. This was a big project and radio row was in the way. Eminent domain fixed that.
The problem was that forcing all those stores or shut down to move broke the cluster. The electronics businesses scattered all over the city and outside, but the important interelationships were gone. You couldn’t go down and do your one stop shopping for tubes, connectors and somebody to build your custom chassis. So getting a project going got much harder and fewer people even tried. Meanwhile the manufacturing infrastructure closed up.
The chip companies in California chased the big sales. And after Radio row closed and electronic R&D gave way to manipulating the stock as a way to make money, the big sales and shortly thereafter were in Japan, Korea and China. The small computer revolution changed that for a while, but there was no one place for manufacturers to dump their surpluses and people to scrounge for computer parts and play. So much of the manufacturing and innovation for projects went to Asia while companies in the US became more interested in producing IP than actual product.
We here in the US may be getting a reprieve. The small 3D printer industry is driven by business startups largely in Brooklyn. It’s only a matter of time before a supporting infrastructure recreates itself. Hopefully in a part of Brookly that nobody will want for some grand project later. And Akihabara and Shizen are having their own development issues. so maybe we will see a new 3D printer row and masses of hobbyists playing with exotic materials and advanced motion controls to create the revival of our economy and create a new future. One can only hope.