Flexible specialization, supply-side institutionalism, and the nature of work systems

Alongside neo-classical supply-side analysis, there was the emergence in th e 1980s of a new strand of anlysis seeking to develop a social-institutiona l perspective on the supply-side of modern industrial economies. This paper contrasts the views of labor market "flexibility" provided by neo-classica l analyses and supporters of deregulation with those of the Flexible Specia lization and Diversified Quality Production theorists and assesses the stre ngths and weaknesses of Flexible Specialization in comparison to its main " institutionalist" rival. It concludes that the anlysis of "supply-side inst itutionalism" and the evidence provided by important empirically based stud ies, suggests that public policy directed towards: optimizing job training, promoting employee participation and inter-firm co-operation, and restrict ing the ability of firms to indulge in short-termism will be most productiv e in promoting the cause of socially progressive industrial production and "good work".