Define the terms 'industry' and 'industrialisation'

Classify industries into primary, secondary and tertiary industries.INTRO TO INDUSTRYOBJECTIVES:

What is Industry?Any work performed for economic gain.Refers to all forms of economic activities.

Industry/economic activities can be classified into 3 broad categories:-Primary Industry Agriculture Secondary Industry Manufacturing IndustryTertiary Industry TourismQ: Why is manufacturing industry a secondary industry?INTRO TO INDUSTRY

A Secondary IndustryMakes use of raw materials which are extracted by primary industriesAdds values to the raw materialsMay produce semi-processed materials, orFinished products for sale.Process of setting up manufacturing industries is known as industrialisation.

Q: How did industrialisation begin?INTRO TO INDUSTRY

The Industrial Revolution (18th Cen)Invention of machines powered by steam, andDevelopment of mass production.Lead to an increase in urbanisation.Prior to IR, most people were largely subsistence.During the IR, the small scale cottage industries gave way to large-scale factory production using energy sources such as coal.

INTRO TO INDUSTRY

Classification of Manufacturing IndustriesManufacturing industries can be classified into heavy or light industries.Based on types of raw materials used.Based on types of goods produced.Based on the sites they occupy, i.e. how much land it occupy.INTRO TO INDUSTRY

Heavy IndustriesUse of large amount of raw materials.Big and bulky machines.Goods produced are large and bulky.Occupy vast areas of land.Tend to pollute the environment.E.g. Iron and steel industries, ship building, oil refinery.INTRO TO INDUSTRY

Light IndustriesUse of lighter and less bulky raw materials.Big and bulky machines.Goods produced are light.Lesser strain on land usage.Processes tend to be cleaner and produce less pollutants.E.g. textile industry and electronics industries.INTRO TO INDUSTRY

Explain the physical and human factors that influence industrial location

Apply knowledge of factors affecting industrial location to given situations.Factors Influencing Industrial Location OBJECTIVES:

Where are all the Industries?Look at Fig. 4.6 (Pg. 90), what can you say about the distribution of worlds industrial regions?

Most of the manufacturing industries are located in the Northern Hemisphere. Why?Highest concentration in N. Hem?What makes one location more suitable for manufacturing industries compared to another?Factors Influencing Industrial Location

Lights Around the World -- The "Astronomy Picture of the Day" for December 24, 2000

Setting up industries is often a heavy investment.It is an important decision to make as .Most industrialist aim to keep cost low and maximise profits.

Factors influencing Industrial LocationPhysical : Raw materials, Energy and Land

Human: Labour, Capital, Market, Transport, Economies of scale and government.Factors Influencing Industrial Location

Factors influencing Industrial LocationFactors Influencing Industrial Location Raw MaterialsIn early stages of industrialization, many industries would develop near sources of raw materials.Usually if raw materials are bulky / in large quantities or perishable.Less critical with todays transport facilities.Example:Manufacturing of copper wiresDairy products, e.g. butter (lose weight butter 25% of milk)

Factors influencing Industrial LocationFactors Influencing Industrial Location Energy / PowerIndustries tend to locate near energy / power source if they require large supplies of power, e.g. iron & steel ind.Some sources are immovable, e.g. the rivers which powers HEP, e.g. aluminium industries in Siberia.Less critical with todays technology in power generation and transport of energy.

Factors influencing Industrial LocationFactors Influencing Industrial Location Land - Terrain, size and locationVaries with different types of industries.Relatively flat terrain is easy for building and thus, reduces building costs.Manufacturing industries, heavy industries tend to be extensive, therefore requires large areas of land.Also, factories which need a lot of land tend to locate far from city centres where land prices are lower.

Factors influencing Industrial LocationFactors Influencing Industrial Location LabourHigh Tech / IT industries locate in countries where there is highly-educated an skilled workforce; also near universities or R&D centres. Labour intensive industries vast numbers of unskilled and cheap labour.Stability no strikes, strong labour union movementEfficiency low absenteeism rate.

Factors influencing Industrial LocationFactors Influencing Industrial Location Capital Needed for rent or buying of land and machinery, installing facilities and hiring labour.The availability of banks and other financial institutions to provide loans is also a pull factor for industrialists.Besides local investors, capital can also come from foreign investors as well.

Factors influencing Industrial LocationFactors Influencing Industrial Location Market Can be local or oversea; can be general public or other companies.Manufacturers locate near markets for practical reason, esp. if the industry gain bulk. (as oppose to lose weight!)E.g. Locating a drink bottling factory near its market the costs of transporting the drinks is reduced.

Factors influencing Industrial LocationFactors Influencing Industrial Location Transport Areas which are easily accessible with efficient transport network will attract more industries.Movement of raw materials, finished products and even worker must be on time.Any delays will increase overall production cost.

Factors influencing Industrial LocationFactors Influencing Industrial Location Economies of scale Concept: Industries can achieve costs savings by producing goods on a large scale. Production costs are spread over a large number of goods produced and the costs per unit is reduced.To make 1 car, you need 50 kg of steel.But steel comes in packets of 1000 kg (tonnes)So the cost of building 1 car and 20 cars is same.To reduce cost, you combine with another company.

Factors influencing Industrial LocationFactors Influencing Industrial Location Economies of scale (Cont.)Small industries should be located near larger industries or other similar industries so that they can share facilities together. Apart from facilities, they can also share knowledge, expertise and manpower resources.

Factors influencing Industrial LocationFactors Influencing Industrial Location GovernmentOffer financial incentives and subsidies Build basic infrastructure and sanitary amenities to enhance the attractiveness of an area.A stable government ensures the safety of the investments of the industrialists.Play the role of watchdog body e.g. to reduce pollution

From labour intensive to high technology processesAim is to make end products that worth much moreInvesting more in technology and mechanisation.E.g. IndiaFrom developed to developing countriesGlobal shift in location of industriesMany different reasons, e.g. raw material , government, etcRise of MNCs Multinational CompaniesWhat are the NEW Changes?

Trend of Transference

Rise of MNCs

Impacts of technological changesChange in Global ManufacturingOBJECTIVES:

Trend of transferenceCompanies do not remain stagnantTrend for manufacturing industries to move production to other countries To NIEs in the 1970s and 80sTo Emerging NIEs from 1990s onwards

Change in Global Manufacturing

Positive and Negative of hosting countries to MNCsAdvantagesCreate jobs for localGuaranteed incomeBring in foreign investmentsHelp to diversify local economy

DisadvantagesLocal low skilled jobsLocal labour poorly paidMost profits go back to parent companiesMNCs are free to relocate at anytimeChange in Global Manufacturing

Impact of Changes in TechnologySpace shrinking TechnologiesTransport and communicationActual distance remained the same but time taken to travel or communicate between 2 places (relative distance) have been reduced.Change in Global Manufacturing

Development in TransportBetter and faster mode of transport reduces travel timeBetter infrastructure reduces actual distanceContainerisationReduced loading and unloading timeEncouraged improvement of transport networkChange in Global Manufacturing

Development in TransportBest container port in the worldPort of Tanjung Pelepas (PTP) handled a total of 48,668 TEUs (in the first six months) vs Singapore's PSA Corporation, which turned in first and second quarter figures of 4.2 million and 4.4 million TEUs respectively. The Port of Tanjung Pelepas (PTP) established a new record for vessel productivity last week by handling 185 containers per hour on a Maersk Sealands vessel Carsten Maersk. In 1999, Singapore set world record by handing 234 containers per hourPSA serves more than 30 shipping lines and has 37 container berths, while PTP has six berths and two shipping lines.Change in Global Manufacturing

Development in CommunicationsFax (Facsimile) MachineSatellite TechnologyInternetEmail Fibre Optics networksBroadband internet Video ConferencingE-bankingE-commerce

Change in Global Manufacturing

Phases of Industrial Development IBefore independenceSmall scaleLabour intensiveLittle govt effort

1960s and 70sGovt orchestrated industralisationFocus: labour intensive, e.g. textiles and ship buildingIndustrial estates developedLater: semiskilled e.g. electronic componentManufacturing Industry in SGP

Phases of Industrial Development II1970sLater: semiskilled e.g. electronic componentIndustries which pollute environment moved to offshore islands

1980s and 90s to presentShift towards capital intensiveHigh skill and high value added industriesR & D encouragedRegionalisation strategy adoptedManufacturing Industry in SGP

Strategies for growthIndustrial PlanningDirected by govt through various policies

Use of ITWell developed banking infrastructure strengthened Singapores position as a financial centre for the region.Setting up of NCB (IDA)Manufacturing Industry in SGP

Strategies for growthEncourage R & DInnovations and greater productivityDevelopment of Science Parks

Improve skillsContinuous training and upgradingSDF skill development fund

Manufacturing Industry in SGP

Strategies for growthRegionalisation strategyEconomic co-operation with neighbouring countriesGrowth Triangles (SIJORI)BatamSuzhou Industral ParkManufacturing Industry in SGP

Industrializationa)British defence spending accounted for 20% of GDPCreated employment for more than 10% of workforce30 000 employed by their military10 000 employed as domestic helpExercise Pg 32

Industrializationb)Fall in GDPProblem of unemployment because a large number of people depended on the British for jobs; problems was worsened by rapid population growth.Pressure on government to provide education, health services and housing.Exercise Pg 32

Industrializationc)Provision of jobs for growing populationDiversification of economyExercise Pg 32

Industrialization2a)Secondary economic activities involve the processing of resources extracted by primary industries. (1m)

Manufacturing processes make use of extracted raw materials to produce useful products and are thus considered as secondary economic activities. (1m)Exercise Pg 38

Industrialization2b) i)Heavy industries use large amounts of bulky raw materials to produce large and bulky goods, (1m) Eg iron and steel industry (1m) Light industries use light and less bulky raw materials and produce lighter finished products, (1m) Eg electronics industry (1m)Exercise Pg 38

Industrialization2b) ii)The industries located there are light Industries. (1m)The buildings are high-rise unlike heavy industries which are low-rise and spread over large areas of land (1m)The industrial area is also located close to a housing estate which suggests that the industries are non-polluting and therefore more likely to be light industries. (1m)Exercise Pg 38

Industrialization2b) iii)Heavy industries often require large areas of flat land to accommodate their bulky machines and raw materials. Light industries usually do not need as much space as their inputs and finished products are lighter and less bulky. (2m)

Heavy industries tend to be located far from housing areas because their production processes can pollute the environment. Light industries are often located close to housing areas as they do not produce as much pollutants. (2m)Exercise Pg 38

Industrialization2b) iii)Light industries need to locate close to a source of highly-skilled labour because they use more high-technology processes and machines. Heavy industries do not rely on skilled labour as much and can locate in areas where there is a large pool of unskilled or semi-skilled labour (2m)Exercise Pg 38

Industrializationa) Bangalore has good transport facilities which are important for importing raw materials and exporting processed goods. This is important as multinational companies (MNCs) have operations in more than one country. Different parts of one product may be produced in different parts of the world. (2m)

There are also global communication facilities which will allow the branch companies and headquarters to keep in touch with each other (2m)Exercise Pg 40

Industrializationa) As the MNCs are likely to place some skilled staff in India to oversee the manufacturing operations, urban centres which offer a good quality of life are important as they attract staff to slay and work there. (2m)

The availability of high quality local staff will also attract MNCs as they would want to locate where there is a sufficient and well-trained workforce. (2m)Exercise Pg 40

Industrializationb) The electronics industry provides jobs for the local people (1m) The establishment and growth of this industry encourages the development of transport and communication facilities, and this benefits the local people as well and improves their lives. (1m)

The rapid development of the electronics industry results in the rapid urbanisation of Karnataka, and this changes the lives of the local people. (1m) The presence of foreign companies in Karnataka could introduce lifestyles and beliefs that are different from the local way of life. (1m)Exercise Pg 42

Industrializationc) Labour costs in India are lower than in Singapore. (1m) Production costs are reduced, especially for operations that require a large workforce. This means that profits increase. (1m)

Singapore companies can capitalise on India's large pool of skilled labour which is trained specifically for the electronics industry. (1m)Exercise Pg 42

Industrializationc) Many areas such as technology parks and industrial parks are specially developed for the electronics industry. Singapore companies can benefit from the available infrastructure. (1m) Eg International Tech Park in Bangalore. Karnataka (1m)

Locating in these areas allows Singapore companies to be near other similar industries to enjoy economies of scale. (1m)Exercise Pg 42

Industrializationc) India has natural resources which Singapore lacks. Locating in India allows Singapore companies greater access to these resources. (1m)

More land is available in India, allowing companies freedom to expand operations. (1m)

Well-developed transport facilities allow companies to import raw materials easily. Finished products can also be exported to global markets. (1m)Exercise Pg 42

Industrializationc) Well-developed telecommunication facilities allow companies located in India to remain in touch with head offices in Singapore (1m)

India has a large domestic market which Singapore manufacturers can tap. (1m) Goods can be sold at a cheaper price in India as they do not need to be transported. (1m)

Urban centres which provide a good quality of life attracts Singaporeans to work there.(1m)Exercise Pg 42