chapter 12 industry and services. industrial revolution some industry existed before the industrial...
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Chapter 12
Industry and Services
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Industrial Revolution• Some industry existed before the industrial revolution
– “cottage industries” in India and China– Europe’s revolution made industry cheaper and faster– Companies created during the Industrial Rev. were
aggressive and promotes the future of colonization • British East India Tea Company
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• Revolution began late 1700s in Europe– New machines, used steam power– Built factories and cities near coal mines and railroads
• Revolution diffused from London to Europe mainland in 1800s– Built along coalfields still and ports built on rivers– Railroad created new manufacturing cities (Paris)
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Location Theory• Location theory- explains the location of an
economic activity based on the factors that influence the activity– Primary- based on location of resources– Secondary- based on human behavior
(culture, customers)• Friction of distance- further away you ship
raw materials, more time and money
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Weber’s model• German who created a model to explain
location of manufacturing– Least cost theory: based on transport cost,
labor cost and agglomeration (companies cluster in the same area)- create a least cost combo of the three
• Big cities = high rent and high labor causing deglomeration where companies leave the city for suburbs (Lake Mary)
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Hotelling’s model
• Locational interdependence- location of an industry is intertwined with it’s competition (pg. 368 ice cream)
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Losch’s model
• Tried to find where to put manufacturing plants to maximize profits based on consumer demands
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Economic Sectors• Primary- jobs that deal with taking things from
the earth (farmer, coal miner)• Secondary- processing raw materials (paper
company, making boxes of cereal)• Tertiary- service jobs that aid or help people
(waitress, doctor)– Quaternary- exchange of money (bankers)– Quinary- exchange of information (scientist)
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Major industrial regions of the world
• Four main industrial regions: West/Central Europe; East North Am.; Russia/Ukraine; Eastern Asia
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• Europe- principal coal deposits in France, Belgium, Germany, Czech Republic, and Poland– Major industry boom in Germany (still today)
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• North America– Began in New England– Grew in power after WWI and WWII– Manufacturing belt (pg. 372) Iowa, Ohio, and
down the Miss. River– Break of bulk point- cargo is transferred from
one type of transport to another (ship to train) • Mainly NY
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• USSR_ focused on industry in the western area (Moscow to St. Petersburg)
• Ukraine became an industrial powerhouse that was annexed by USSR
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• East Asia- Japan and China- both avoided colonization and grew as industrial countries
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• Energy a new factor in the world with US consuming 27% if the world’s oil but only producing 18%– Heavily dependent on foreign oil
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Industrial Production Change• Twentieth century boom began with Henry Ford
and the assembly line– Mass production called Fordist
• Currently in Post Fordist where production is distributed across the globe though “outsourcing”– Time space compression (use of technology)
makes global interaction easier
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Industrial belts today• Deindustrialization- where companies
move to areas of cheaper labor; then richer countries become service oriented– Europe and US highly deindustrialized– Manufacturing belt of US now the Rust Belt– China is the main source of outsourced work
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Service Economy• Fordism began to decline after WWII with
the decline in the cost of transport of goods– If oil prices go up then the price of transport
goes up
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• Shift for the US to service and technology industries– Tertiary- service sector– Quaternary- collection of information and
finance– Quinary- research and higher learning– All grown rapidly in past 30 years
• Service industries growing mainly in the core
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• Service industries expanding in mainly the core countries and labor dispersed to other countries– This shift encourage the core-periphery model– Still some poor areas in core countries
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• Service industries moving to the Sunbelt (SW and SE)
• Location now less of an issue because of technology– Some service industries depend on
location (hotels; retail)• Location of service industries can completely
change cultural landscape (Wal-Mart)• Quaternary services can be located anywhere
(small towns)
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• High tech corridors (Silicon Valley, CA) where research and tech development are clustered together (Techno pole)– Boston area creating a new techno pole– Only need to be near transport and
communication networks
• Footloose industries- business that have no storefront