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Unit 6: Industry and ServicesCh 11: IndustryCh 12: ServicesAt the conclusion of this unit you will understand that…The Industrial Revolution, as it diffused from its hearth, facilitated improvements in standards of living. (3)Measures of development are used to understand patterns of social and economic differences at a variety of scales. (3)Development is a process that varies across space and time. (2)Sustainable development is a strategy to address resource depletion and environmental degradation (1)Key Issues: IndustryWhere is industry distributed?Why are situation factors important?Why are site factors important?Why are location factors changing?Lecture 1:Explain the role of the Industrial Revolution in the growth and diffusion of industrializationIdentify the different economic sectorsExplain the role of the Industrial Revolution in the growth and diffusion of industrializationIndustrialization began in response to new technologies and was facilitated by the availability of natural resourcesWater powerCoalIron oreThe diffusion of industrialization led to growing populations and increased food supplies which freed workers to seek industrial jobs in citiesIncreased industrialization led to demands for raw materials and the search for new markets and was a factor in the rise of colonialism and imperialismSo…Where is Industry Distributed?Origin of Industrycottage industries to Industrial Revolution Most significant impact of the IR was to promote concentration rather than dispersion of industry across the landscapeThe Industrial Revolution originated in Britain during the late 18th century because of the combination of:EntrepreneursCapitalraw materialsavailable laborThree-quarters of the world’s industrial production is concentrated in four regions: northwestern Europeeastern Europeeastern North AmericaEast AsiaIndustrial Revolution Hearthsoriginated in areas of northern England!Factories clustered near coalfields.Textiles Production: Liverpool and ManchesterIron Production: Birmingham Coal Mining: NewcastleDiffusion of the industrial revolutionWhenWhereWhy Diffusion to Mainland Europeearly 1800sLocation criteria: proximity to coal fields; Connection via water to a portFlow of capitalLater Diffusionlate 1800s, innovations diffused to some regions without coalLocation criteria:Access to railroadFlow of capitalFlow of Capital Into Europe , 1775Flow of capital was needed in order to fuel the Industrial RevolutionIndustrial RegionsEuropelate 19th /early 20th centuriesWestern Europe, Central Europe, Russia (Europe/Asia)North AmericaIndustry arrived later but spread faster than in EuropeEast Asia:China and JapanEach regions accounts for roughly ? of the world’s total industrial output. Brazil and India account for most of industrial output outside these regions.Paris Basin is the Industrial base of France. Rouen (pictured here) is at the head of navigation point on the Seine River. Western Europemajor industrialization regions:Britain: oldestRhine-Ruhr Valleymid-Rhinenorthern ItalyBritain’s is now attracting high-tech industries, especially Japanese companies. Most British industries locate in southeast England today.The Rhine-Ruhr has been important largely because of coal and iron deposits and steelmaking.The mid-Rhine:Germany and Franceimportant proximity to large consumer marketsThe Po valley of northern Italy began with textile manufacturing and has benefited from low labor costs. Eastern EuropeThe oldest industrial areas are the central industrial district:centered on Moscow and St. PetersburgOne of Russia’s early nodes of industrial development. Other industrial areas include:Volga: petroleum and natural gasUral: source of raw materials but lacks energy sources.Kuznetsk: Russia’s most important industrial region east of the Ural Mountains.Outside the former Soviet Union there are important industrial regions in:eastern Ukraine and Silesiaincludes parts of Poland and the Czech Republic. North Americamajor industrial region later than EuropeTextiles were important in the U.S. by 1860.Manufacturing has been traditionally located in the northeastern U.S. with its numerous raw materials. New EnglandMiddle AtlanticMohawk ValleyPittsburgh-Lake Erie Western Great Lakes: due to the dominance of Chicago as a market center.Canada’s most important industrial area is the region around the St. Lawrence Valley, benefiting from its location and the availability of cheap hydroelectric power.Industrial Areas in North AmericaEast AsiaHas a HUGE ASSET in its population!!!Japan:Became a world power in the 1950s“made in Japan”= negativeTrained highly skilledAreas of centration are in the southeastChina:Largest consumer goods marketAreas of concentration are on the east coastHUGE disparity between rich and poor Manufacturing Centers in East AsiaMany industries in China are clustered in three centers near the east coast. In Japan, production is clustered along the southeast coast.Identify the different economic sectorsThe economy consists of sectors:Primary: ?extraction of raw materials mining, fishing and agricultureSecondary:concerned with producing finished goodsfactories making toys, cars, food, and clothesTertiary:concerned with offering intangible goods and services to consumers. retail, tourism, banking, entertainment and? I.T. services.Quaternary:Information servicesknowledge-based?information technology, ?information-generation and -sharing,?media, and?research and developmentknowledge-based services like consultation,?education,?financial planning,?blogging, and?designingQuinary:human serviceshigh-level decisions are made by top-level executives in the government,?industry, business, education, media and nonprofit organizations. the top economic?sector.Lecture 2:Various models have been created to understand industrial locationHow do Location Theories explain Industrial Location?Location TheoryLocation Theory – predicting where business will or should be located.Considerations:Variable costsFriction of distanceUse Weber’s Model to explain Industrial location:Alfred Weber’s model of industrial location emphasized the owners desire to:minimize transportation and labor costs maximize agglomeration economiesLocation Models cont. Explain social and economic measures of developmentMeasures of social and economic development include:Gross National Income (GNI) per capitasectoral structure of an economyincome distributionfertility ratesinfant mortality ratesaccess to health careliteracy ratesMeasures of gender inequality include:reproductive healthindices of empowermentlabor-market participationThe Human Development Index (HDI) is a composite measure used to show spatial variation in levels of developmentSo…Why are situation Factors Important?Proximity to InputsProximity to MarketsShip, Rail, Truck or Air?Losch’s Model - Zone of ProfitabilityProximity to inputs Situation factors:Proximity to inputs:MaterialsEnergyMachinerySupporting servicesLocation near marketsTransport choicesTypes of IndustriesBulk-reducing industries: becomes lighter through processingExamples:Copper:First three need to be NEAR INPUTSMININGCONCENTRATIONSMELTINGREFINING: location not a huge dealCopper Industry in North AmericaCopper mining, concentration, smelting, and refining are examples of bulk-reducing industries. Many are located near the copper mines in ArizonaSteel: when relative importance of inputs changes the optimal location for industry changesMid 1800s: Pittsburg: iron ore and coal minedlate1800s: Lake Erie and Ohio: locational shift influenced by discovery of iron ore in the Mesabi Range: shipped by lakes1910s: closer to Mesabi Range due to changing technology1950s: coastal regions became important and reflect a change in dropping transportation costsLate 1900s: most mills closedMini millsIntegrated steel mills in the U.S. are clustered near the southern Great Lakes, which helped minimize transport costs of heavy raw materials.Proximity to markets Bulk-gaining industries: gets heavier through processingExamples: Fabricated metals: Located near marketsMotor vehiclesGlobally: 3/4th cars made in USANationally: Auto-alley Beverage production Water =heavyLocated near customersLocation of Beer BreweriesBeer brewing is a bulk-gaining industry that needs to be located near consumers. Breweries of the two largest brewers are located near major population centers. Single-market manufacturers Producer of parts for vehiclesJust-in-time: car seatsPerishable products Near marketsMilk and breadNewspapers: deadU.S.-owned parts plants are clustered near the main final assembly plants. Foreign-owned plants tend to be located further south, where labor unions are weaker.Ship, rail, truck, or air? The farther something is transported, the lower the cost per km/mile Cost decreases at different rates for each of the four modes Truck = most often for short-distance travel Train = used to ship longer distances (1 day +) Ship = slow, but very low cost per km/mile Air = most expensive, but very fast Regardless of transportation mode, cost rises each time inputs or products are transferred from one mode to another!Break-of-bulk point: location where transfer among transportation modes is possibleSeaportsAirportsLecture 3:Analyze the spatial patterns of economic and social developmentHigh human developmentMedium human developmentLow human development??Unavailable?North-South DivideAnalyze the spatial patterns of economic and social developmentModels explain spatial variations in developmentRostow’s Stages of Economic Growth:Traditional society.Preconditions for take-off.Take-off.Drive to maturity.Age of high mass consumption.Wallerstein’s World System Theory macro-scale approach to?world history?and?social changeemphasizes the?world-system?(not?nation states) as the primary unit of?social analysisStresses world-systems as the basic unit of social analysisInternational division of labor:Core countries: high skill, capital intensiveSemi-periphery countriesPeriphery countries: low-skill, labor-intensiveModel makes an attempt to explain one large world economyHistoric hegemons: Netherlands, United Kingdom, United StatesThe U.N. Millennium Development Goals help measure progress in developmentBarriers to development: Lack of educationLack of healthcarePervasiveness of intoxicating drugsWeak political, social, and economic institutionsIneffective taxationEnvironmental degradationLack of religious/gender/racial/sexual freedomsIndebtednessProtectionist barriers to tradeForeign aidDependence upon primary resource exportsUnequal distribution of wealthInhospitable climateIn contrast to the periphery and semi-periphery, the core countries achieved dominance through industrial production of goodsSo… Why are Site Factors Important for industrialization?Laborworlds manufacturing workers:China= 25%India: 20%All MDCs combined: 20%Global Paychecks:LDC= $5 per hourMDC= $20 per hourThe most important site factor Labor-intensive industries: most expenses go to paying employees Examples: textiles: woven fabrics Textile and apparel spinning SpinsterLow wage workersRayon, nylon, polyester: synthetic fibers Textile and apparel weaving93% of fabric comes from LCDsTextile and apparel assembly Sewing: horns to iron needles 1300sMDCs assemble clothes due to marketsCotton Yarn Production Production of cotton yarn from fiber is clustered in major cotton growing countries, including the U.S., China, India, Pakistan, and Russia.Woven Cotton Fabric Production Production of woven cotton fabric is labor intensive and is likely to be located in LDCs. China and India account for over 75% of world production.Production of Women’s Blouses Sewing cotton fabric into women’s blouses is more likely to be located near customers in MDCs, but much production now occurs in LDCs.LandRural sites:Cities attractive situation and sitelarge local market and shipping by rail to the national marketlabor and capitalNegative cite factor for a city= LANDEarly factories = multistoryPrice:cheaper in suburban or rural locations Expensive in the center of a citytruck transport= factories located near major highways clustered in industrial parks located near suburban highway junctionsEnvironmental factorsAttractions From coal to electricity:20th centuryIndustries with a high demand for electricity choose locations based on lower electrical ratesAluminum industry= dams Capital Manufacturers borrow funds to establish new factories or expand existing onesThe ability to borrow money has become a critical factor in the distribution of industry in LDCs:Unstable political systemHigh debtIll-advised economic policiesMichigan:Hub of motor-vehicles due to the eastern banks NOT lending moneySilicon Valley:People are more willing to RISK money on new technologySite Selection for SaturnGM considered a variety of economic and geographic factors when it searched for a site for producing the new Saturn in 1985. The plant was eventually located in Spring Hill, TN.Lecture 4:So… Why are Location Factors Changing?Attraction of new industrial regions Changing industrial distribution within MDCsUnited States: Interregional shiftNortheast TO South and WestEurope: relocation to economically distressed peripheral regionsRight-to-work laws:Predominate in the south Open-shop vs. closed-shop= don’t have to join a union/MUST join a unionGulf Coast = important industrial areaTextile production U.S.: shifted from Northeast (New York) to the Southeast1950s: easy reach to markets from opened highway systemInterregional shifts in Europe Manufacturing diffused from northwest to South and Eastern PartsCONVERGENCE: east and southern Europe/ bad economiesCOMPETITIEE AND EMPLOYMENT REGIONS: western Europecore industrial areasmanufacturing job lossChanging U.S. Manufacturing Manufacturers of Men’s and Women’s Socks and Hosiery International shifts in industry OUTSIDE Europe and North America East Asia : 1 of 3 major industrial regionsChina, Japan, South Korea (LEADING producer of container ships)South Asia: lead by IndiaFastest growing textiles and motor-vehicle economyIndia's GDP will= USA by 2050Latin America: nearest low wage region to the United StatesMaquiladora plants are in the NORTH of MexicoBrazil is the leading economy in Latin AmericaChanging distributions Shift seen in steel and clothesChina = worlds leading steel producer at 38%Labor-intensive regions love LDC’sClothes that USED to be made in the U.S. = now made in LDCs because of cheap transportation costs. World Steel Production OutsourcingTransnational corporations = aggressive in LDCsNew international division of labor: picking LDCs who pay almost NOTHING to employees to cut the cost of shipping BACK to MDCsHighly skilled work remains in MDCs Apparel Production and Jobs in the United States Renewed attraction of traditional industrial regions Proximity to skilled labor:Fordist: mass productionDominant in the 20th centuryWorkers on an assembly line repeating tasksConsumer goods produced at a single site Post-Fordist: lean production:Production dispersed and accelerated around the globeTeams decide best approachProblem solving: talking rather than paper pushingLeveling: everyone is on the same levelJust-in-time delivery:Strict timetablesSaves money on STOCKED inventory2 ways this may not be a good thing:Labor unrest!Acts of God!Electronic Computing Manufacturing Women’s and Girls’ Cut and Sew Apparel Manufacturing What is the role of women in economic development and gender equity in the workforce?Although more women work, they do not have equity in wages or employment opportunitiesMicroloans have provided opportunities for women to create small local businesses, which have improved standards of living Chapter 12 Services Key Issue #1: Where did services originate?Servicesany activity that fulfills a human want or need!located in settlementsLocation is important for profitability Affluent regions tend to offer more services Three types of servicesConsumer servicesAbout 44 % of all jobs in the United StatesRetail and Wholesale ServicesEducation ServicesHealth ServicesLeisure and Hospitality Services2. Business servicesAbout 24 % of all jobs in the United StatesFinancial sectorProfessional servicesTransportation and information services3. Public servicesAbout 17 % of all jobs in the United StatesFederal, state and local government workersChanges in the # of EmployeesUnited States: all employment growth occurs in the services sectorGrowth: engineering, management, law, data processing, advertisingDecline: transportation and financeEfficiency!Services in early rural settlementsEarly consumer services societal needsburial of the deadreligious centersmanufacturing centersEarly public services: religiousEarly business services: foodServices in early urban settlementsServices in ancient citiesEarliest urban settlements: Ur in Mesopotamia or present day Iraq“Fire”: Abraham 1900 B.C.Titris Hoyuk: well patternedAncient Athens:Govt/ military protection and public services for surrounding hinterlandsAthens was the largestCharacteristic urban settlementCulture AND public servicesOther examples:Knossos on the Island of CreteTroy in Asia MinorMycenae in GreeceServices in ancient citiesAncient Rome:250,000 people“all roads lead to Rome”Extent of its empire allowed for the establishment of administrative centersContracted roads, aqueducts, securityRome fell in the 5th centuryServices in medieval cities Cities reemerged in the 11th centuryUrban residents: ONCE GIVEN A charter, started to tradePower centers:LordChurchmarketsLargest settlements were in AsiaEuropean cities developed with feudalism Key Issue #2: Where Are Contemporary Services Located?Services in rural settlementsDispersed rural settlement: typical in North America50% of the world lives in rural settlementsTwo types of rural settlements:Clustered Works when the population is low!Circular:Kraal Villages: South AfricaGewandorf: GermanyStudied by Von ThunenLinear:St. Lawrence river QuebecFrench Long-lot system:Houses erected along riversFrench law= sons inherit equal portion of estateRows constructed inlandIn Colonial Americaaround a “common” areaChurchSchoolHomesPublic buildingsFavored by New Englanders because:Traveled in a groupShared culture encouraged close livingIndian attacks!!!Dispersed rural settlementsUnited States:Middle Atlantic coloniesGermany, Dutch, Irish, Scottish, Swedish, EnglishALONE Bought land individuallyDominated American Midwest1700s: New England dispersed replaced clusteredEuropeans converted clustered to dispersed with new technology!Great BritainEnclosure movement2nd agricultural revolution technology 1750-1850 British government consolidated agricultural landRural Settlement Patterns1800: only 3% of Earth lived in citiesBeijing was the only city to have over 1 million2000: 47% of people live in cities:400 cities with over 1 million peopleServices in urban settlementsDifferences between urban and rural settlements1930s Louis Wirth: Believed that what sets cities apart from rural areas are their: Large size: different social relationshipsRural: know everyoneUrban: know very fewHigh density: Everyone has a specific role!= specializationVery competitiveSocial heterogeneity:Urban: More freedom yet lonelyRural: less freedom to be YOU but more connectedIncreasing percentage of people in citiesLarge # reflects development75% MDC to 40% LDC: exception LATIN AMERICA: closer to MDCsDue to: 19th cent Industrial Revolution and 20th cent growth of services Increasing % of people in citiesLDCs experience being pushed from farms but are not sure of jobs in cities because of growth in populationIncreasing number of people in citiesMDCs have higher % of urban residents BUT LDCs have more of the large urban settlementsSo they are urban…SHOULDN’T THEY HAVE ECONOMIC DEVELOPMENT?50% growth from Migration from the countryside50% results from high natural increase ratesAnalyze the causes and consequences of international trade and growing interdependence in the world economyComplementary and comparative advantage establish the basis for trade:Ex. Four Asian TigersSouth Korea, Singapore, Taiwan, and former British colony Hong Kong were amongst the first Asian areas to embrace international trade; trade is considered complementary?(meaning both sides benefit)1. South Korea: exports automobiles and electronicshigh quality-university and primary education systemaccess to worldwide markets thanks to port cities like Pusan and Kwangju2. Taiwan: Who controls Taiwan? The United States recognizes Taiwan as independent due to their more capitalist economic systemChina claims Taiwan is a part of their country. Grown in economic status due to exports with Kaohsiung handling most exports3. Singapore: example of an?entrep?t;?busiest port in the worldone of the cleanest and safest places in the world due to tough laws against crime ports take in goods and re-export to places like Japan, Europe, the USA and other regions4. Hong Kong: Britain gave up its control of this port in the 1990s Example of an entrep?t?with its main industry being the re-export of industrial products especially those made in mainland ChinaInternational trade and trading blocs (e.g., EU and NAFTA) have become more important as a result of globalization!!Ex:European Free Trade Association (EFTA)Eurasian Economic Community (EAEC)ASEAN Free Trade Area Agreement (AFTA)Central European Free Trade Agreement (CEFTA)North American Free Trade Agreement (NAFTA)South Asian Association for Regional Cooperation (SAARC)Pacific Islands Forum (PIF)Geographies of interdependence in the world economy include:global financial crisesshift in manufacturing to newly industrialized countriesimbalances in consumption patternsthe roles of women in the labor forceExplain how economic restructuring and deindustrialization are transforming the contemporary economic landscapeOutsourcing and economic restructuring have led to:a decline in jobs in manufacturing regions the relocation of a significant segment of the workforce to other areasIn countries outside the core, the diffusion of industry has resulted in the emergence of the international division of labor and manufacturing zonesMaquiladorasspecial economic zonesfree trade zonesThe contemporary economic landscape has been transformed by the emergence of:service sectorsTechnopoles: high technology industries and growth poles:Silicon ValleyResearch TriangleGovernment initiatives at all scales may help promote economic developmentAnalyze sustainability issues related to industrialization and development Sustainable development addresses issues of:natural resource depletionmass consumptionthe costs and effects of pollutionthe impact of climate changeissues of human health, well-being, and social and economic equityEcotourism is a strategy used by some countries to help protect the environment and generate jobs! ................
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