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The object of this paper is (1) to bring together and integrate the various concepts of flexibility found in the economic literature, (2) to “flesh out” the meaning of various aspects of flexibility and their implications, thereby bridging the gap between the existing highly abstract theories and the empirical facts, and (3) in the process to give a rich and comprehensive enough description of an industry to stimulate further theoretical as well as empirical work. The study tries to combine inductive and deductive reasoning, using empirical observations based on indepth interviews with manufacturers in the metalworking industry in the United States and Sweden.