Explaining Economic Restructuring: An input-output analysis of organisational change in the European Union

This article investigates the extent to which the European economy (as a whole) has entered a period of restructuring from 1970 to the present, and assesses whether different theories of restructuring can explain the processes involved.Three political economy perspectives on restructuring are presented: flexible specialisation, neo-Schumpeterian/long wave, and Regulation. The extent of organisational restructuring is identified using an input-output methodology that separates supply-side and demand-side change. Supplyside output change indicates the importance of vertical externalisation, which all restructuring theories identify as important. This empirical methodology is applied using EU wide input-output tables for 1970, 1975, 1980, 1985 and 1991. Considerable restructuring is indicated as having occurred, particularly in European manufacturing industry. But this restructuring seems not to be consistent with any single perspective; rather all three are relevant in different circumstances. Finally, an attempt is made to sketch a theory of the firm consistent with the evidence presented.