December 3, 2003

TERRITORIES OF PROFIT: New Book Uncovers Precedents
for Innovation at Dell Computer in 19th Century Meatpacking Firm
By Barry Jagoda

In a provocative new book, Gary Fields, a professor in the Department of Communication at the University of California, San Diego reveals how the Internet age and Dell Computer have historical parallels with the late 19th century experience of the G.F. Swift Meatpacking Company. Focusing on the use of communications technology and building on the role of innovation in capitalist development, Territories of Profit tells the story of the creation of a mass production economy and a national market in the late 19th century, and the Internet economy and globalization in the current period, using Swift and Dell as protagonists.

“The comparison of Swift and Dell is compelling,” insists William Lazonick, professor of economic history at the University of Massachusetts and Paris/INSEAD. “An amazingly original book” is how Ann Markusen, professor at the Humphrey Institute, University of Minnesota describes Fields’ study.

The Swift case describes how the Company used the railroad and telegraph in pioneering a revolutionary system of mass production and mass distribution for fresh beef that helped establish a national market. The Dell case reveals how the PC maker used the communications revolution of the Internet to ignite a process of innovation in procurement, production, and distribution resulting in the creation of a global territory for profit making. Fields details the symmetries in this route from communications revolutions to innovation and territorial reconfiguration during the two periods in challenging the notion about the uniqueness of the Internet Age.

“There is nothing like a nineteenth century viewpoint to put the twentieth into perspective,” notes Richard Langlois, professor of economics at the University of Connecticut in commenting on Fields’ book.

Readers will find the detailed case studies of the two firms to contain fascinating material. One learns for example, that Swift customized many different grades and cuts of beef for retail butchers in real time by means of orders transmitted by telegraph technology. Such a system anticipates by a century Dell’s Internet-based system of just-in-time customization of PCs. From interviews with Dell managers and its suppliers, Territories of Profit describes the unique system of planning and logistics developed by Dell in ways never before revealed in existing studies of the PC maker.

According to Fields the lessons to be learned from Territories of Profit are threefold: first, while the Internet is different from earlier communications breakthroughs, its impact is most intelligible as part of a much broader historical revolution in communications; second, business innovation is the outcome of firms creating organizations and using mechanisms of power strategically in pursuit of profit; and third, in pursuing this mission of crafting more innovative routes to profit-making, firms use power and organization to reconfigure territory such that the continental economic empire building of the vertically integrated firm and the global market development of the network firm share similar histories.

Ultimately, Territories of Profit addresses two of the most fundamental questions in economic development studies and business history: how do economies grow and change, and what is the role of innovative business organizations in this process of economic transformation. The book uncovers a common pathway of economic development in different historical periods in which firms, responding to communications revolutions, innovate their business processes and organizations, and reshape the territorial organization of economic activity, and contributes new theory on the role of communications and organizational innovation to economic transformation over time.

Media Contact: Barry Jagoda, (858) 534-8567