Bicycles and the wealth of nations

By Jane Jacobs

How bikes gave a tiger its tail

In her 1985 book. Cities and the wealth of nations, Canadian economic and social critic Jane Jacobs discussed the small business and manufacturing components that make cities, and the national economies they sustain, successful. She saw the humble bicycle - especially the home-built variety - as playing a key part in the scheme of things.

Economic life develops by grace of innovating; it expands by grace of import-replacing. These two master economic processes are closely related, both being functions of city economies. Further- more, successful import-replacing often entails adaptations in design, materials or methods of production, and these require innovating and improvising, especially of producers' goods and services....

Cities that replace imports significantly replace not only finished goods but, concurrently, many items of producers' goods and services. They do it in swiftly emerging, logical chains. For example, first comes the local processing of fruit preserves that were formerly imported, then the production of jars or wrappings formerly imported for which there was no local market of producers until the first step had been taken. Or first comes the assembly of formerly imported pumps for which, once the assembly step has been taken, parts are imported; then the making of parts for which metal is imported; then possibly even the smelting of metal for these and other import replacements. The process pays for itself as it goes along. When Tokyo went into the bicycle business, first came repair work cannibalizing imported bicycles, then manufacture of some of the parts most in demand for repair work, then manufacture of still more parts, finally assembly of whole, Tokyo-made bicycles. And almost as soon as Tokyo began exporting bicycles to other Japanese cities, there arose in some of those customer cities much the same process of replacing bicycles imported from Tokyo, rather than from abroad, as had (historically) happened with many items sent from city to city in the United States....

Not only did Japan acquire bicycle manufacturing and develop its own producers' goods for the purpose as it went along, it also acquired an improvised method for reproducing other types of complex imported goods symbiotically in groups of individually small and simple factories, a method put to use for manufacturing sewing-machines, for example, and later radios and electrical goods. A modern derivative of the system, used by the great Nissan automobile works with its close clusters of suppliers who make daily and even hourly deliveries of what is needed for assembly at the time, has recently become the subject of much study and admiration on the part of American industrialists.

At the time when the Japanese developed their own bicycle manufacturing, the bicycles they imported were being made in highly integrated, huge, complete factories in America, as the sewing-machines also were. Had the Japanese tried to import complete factories for these purposes, whether by buying them outright or obtaining them on credit, they would have lost the opportunity to develop their own producers' goods and production methods, and the bicycles, sewing-machines, and so on, would have been more expensive as well, probably too expensive for the Japanese to buy. In- stead, they used their trade with currently more advanced economies only as a springboard for their own development.

Cities and the wealth of nations, by Jane Jacobs, is available from Vintage Books, a division of Random House Inc., 11th Floor, 201 East 50th St., New York. N.Y. 10022, U.S.A.