in the highly developed economies of the future, it is probable that cities will become huge, rich and diverse mines of raw materials. These mines will differ from any now to be found because they will become richer the more and the longer they are exploited. The law of diminishing returns applies to other mining operations: the richest veins, havi

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So what we have here, if this summary is correct, is another reciprocating system of growth, though more complex than the one described in the preceding chapter. Its workings can be stated this way: a city builds up its imports and thus becomes capable of replacing many of them. By doing so it becomes capable of generating more exports. It thus bui

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Japan, reinventing its agriculture, has accomplished abruptly and rapidly what the United States did somewhat more gradually and Western Europe more gradually still. It created rural productivity upon a foundation of city productivity. There is no inherent reason why this cannot be done by other nations even more rapidly. Modern productive agricult

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In an economy where many new goods and services are being added, new divisions of labor multiply more rapidly than old divisions of labor become obsolete. In this way, kinds of work literally multiply, not by any economic “spontaneous generation” but rather as one thing leads explicitly to another. The greater the sheer numbers and varieties of div

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We might say of this way of launching a new exporting enterprise that the exporter adds an export to other people’s local work. The relevant local work consists of preexisting divisions of labor. To be sure, the new export work proliferates subsequent new divisions of labor of its own. But to begin with, it ordinarily depends heavily on local produ

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While all but the largest enterprises in a modern city are apt to use local producers’ goods and services, new exporters depend especially heavily, for a reason, upon this local supply. To produce something for a city’s own local market, and at the same time build up a reasonably complete organization to do the work, without extreme dependence upon

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Division of labor is a device for achieving operating efficiency, nothing more. Of itself, it has no power to promote further economic development. And because it does not, division of labor is even extraordinarily limited at improving operating efficiency in any given work. All further increases in efficiency, once existing work has been suitably

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When cities that have already had import-replacing episodes in their past, and thus already have large and comprehensive local economies, go on to replace imports rapidly yet again, they garner an economic margin in their local economies for adding extraordinary, even unprecedented, goods and services. It was just such cities, already big but growi

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We have been considering three different processes by which organizations can first become exporters: • They can add the export work to other people’s local work. • They can add the export work to different local work of their own. • They can export their own local work. The significant fact about these processes is that they all depend directly on

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