Unit 6: Industry and ServicesCh 11: IndustryCh 12: Services

• At 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: Industry• Where 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

industrialization• Identify the different economic sectors

Explain the role of the Industrial Revolution in the growth and diffusion of industrialization

• Industrialization began in response to new technologies and was facilitated by the availability of natural resources

• Water power• Coal• Iron ore

• The diffusion of industrialization led to growing populations and increased food supplies which freed workers to seek industrial jobs in cities

• Increased industrialization led to demands for raw materials and the search for new markets and was a factor in the rise of colonialism and imperialism

• So…Where is Industry Distributed?Origin of Industry• cottage industries to Industrial Revolution • Most significant impact of the IR was to promote concentration rather than

dispersion of industry across the landscape• The Industrial Revolution originated in Britain during the late 18th century because

of the combination of:• Entrepreneurs• Capital• raw materials• available labor

• Three-quarters of the world’s industrial production is concentrated in four regions: • northwestern Europe• eastern Europe• eastern North America• East Asia

Industrial Revolution Hearths• originated in areas of northern England!

• Factories clustered near coalfields.• Textiles Production: Liverpool and Manchester• Iron Production: Birmingham • Coal Mining: Newcastle

Diffusion of the industrial revolutionWhen Where Why

Diffusion to Mainland Europe• early 1800s• Location criteria:

• proximity to coal fields; • Connection via water to a port• Flow of capital

Later Diffusion• late 1800s, innovations diffused to some regions without coal

• Location criteria:• Access to railroad• Flow of capital

Flow of Capital Into Europe , 1775• Flow of capital was needed in order to fuel the Industrial Revolution

Industrial Regions• Europe

• late 19th /early 20th centuries• Western Europe, Central Europe, Russia (Europe/Asia)

• North America• Industry arrived later but spread faster than in Europe

• East Asia:• China and Japan

• Each regions accounts for roughly ¼ 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 Europe• major industrialization regions:

• Britain: oldest• Rhine-Ruhr Valley• mid-Rhine• northern Italy

• Britain’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 France• important proximity to large consumer markets

• The Po valley of northern Italy began with textile manufacturing and has benefited from low labor costs.

Eastern Europe• The oldest industrial areas are the central industrial district:

• centered on Moscow and St. Petersburg• One of Russia’s early nodes of industrial development.

Other industrial areas include:

• Volga: • petroleum and natural gas

• Ural: 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 Silesia•• includes parts of Poland and the Czech Republic.

North America• major industrial region later than Europe

• Textiles were important in the U.S. by 1860.• Manufacturing has been traditionally located in the northeastern U.S. with its

numerous raw materials. • New England• Middle Atlantic• Mohawk Valley• Pittsburgh-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 Asia• Has a HUGE ASSET in its population!!!• Japan:

• Became a world power in the 1950s• “made in Japan”= negative• Trained highly skilled• Areas of centration are in the southeast

• China:• Largest consumer goods market• Areas of concentration are on the east coast• HUGE disparity between rich and poor

• Manufacturing Centers in East Asia• Many 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 sectors

The economy consists of sectors:• Primary:  

• extraction of raw materials • mining, fishing and agriculture

• Secondary:• concerned with producing finished goods• factories making toys, cars, food, and clothes

• Tertiary:• concerned with offering intangible goods and services to consumers. • retail, tourism, banking, entertainment and  I.T. services.

• Quaternary:• Information services• knowledge-based • information technology,  information-generation and -sharing, media,

and research and development• knowledge-based services like consultation, education, financial

planning, blogging, and designing• Quinary:

• human services• high-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 location

How do Location Theories explain Industrial Location?Location Theory• Location Theory – predicting where business will or should be located.

• Considerations:• Variable costs• Friction of distance

Use 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 economies

• Location Models cont. Explain social and economic measures of development• Measures of social and economic development include:

• Gross National Income (GNI) per capita• sectoral structure of an economy• income distribution• fertility rates• infant mortality rates• access to health care• literacy rates

• Measures of gender inequality include:• reproductive health• indices of empowerment• labor-market participation

• The Human Development Index (HDI) is a composite measure used to show spatial variation in levels of development

So…Why are situation Factors Important?• Proximity to Inputs• Proximity to Markets• Ship, Rail, Truck or Air?• Losch’s Model - Zone of Profitability

Proximity to inputs • Situation factors:

• Proximity to inputs:

• Materials• Energy• Machinery• Supporting services

• Location near markets• Transport choices

• Types of Industries• Bulk-reducing industries: becomes lighter through processing• Examples:

• Copper:• First three need to be NEAR INPUTS

• MINING• CONCENTRATION• SMELTING

• REFINING: location not a huge dealCopper Industry in North America• Copper mining, concentration, smelting, and refining are examples of bulk-

reducing industries. Many are located near the copper mines in Arizona• Steel:

• when relative importance of inputs changes the optimal location for industry changes• Mid 1800s: Pittsburg: iron ore and coal mined• late1800s: Lake Erie and Ohio: locational shift influenced by

discovery of iron ore in the Mesabi Range: shipped by lakes• 1910s: closer to Mesabi Range due to changing technology• 1950s: coastal regions became important and reflect a change in

dropping transportation costs• Late 1900s: most mills closed

• Mini mills• Integrated 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 processing• Examples:

• Fabricated metals: • Located near markets• Motor vehicles

• Globally: 3/4th cars made in USA• Nationally: Auto-alley

• Beverage production • Water =heavy• Located near customers

Location of Beer Breweries• Beer 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 vehicles• Just-in-time: car seats

• Perishable products • Near markets• Milk and bread• Newspapers: dead

• U.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 possible

• Seaports• Airports

Lecture 3:Analyze the spatial patterns of economic and social development• High human development• Medium human development• Low human development  • Unavailable North-South Divide

Analyze the spatial patterns of economic and social development• Models 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 change• emphasizes the world-system (not nation states) as the primary unit of social analysis• Stresses world-systems as the basic unit of social analysis

• International division of labor: Core countries: high skill, capital intensive Semi-periphery countries Periphery countries: low-skill, labor-intensive

• Model makes an attempt to explain one large world economy Historic hegemons: Netherlands, United Kingdom, United States

The U.N. Millennium Development Goals help measure progress in development• Barriers to development: • Lack of education• Lack of healthcare• Pervasiveness of intoxicating drugs• Weak political, social, and

economic institutions• Ineffective taxation• Environmental degradation• Lack of

religious/gender/racial/sexual freedoms

• Indebtedness• Protectionist barriers to trade• Foreign aid• Dependence upon primary

resource exports• Unequal distribution of wealth• Inhospitable climate

• In contrast to the periphery and semi-periphery, the core countries achieved dominance through industrial production of goods

So… Why are Site Factors Important for industrialization?Labor• worlds manufacturing workers:

• China= 25%• India: 20%• All MDCs combined: 20%

• Global Paychecks:• LDC= $5 per hour• MDC= $20 per hour

• The most important site factor • Labor-intensive industries: • most expenses go to paying employees • Examples: textiles: woven fabrics

• Textile and apparel spinning Spinster Low wage workers Rayon, nylon, polyester: synthetic fibers

• Textile and apparel weaving

93% of fabric comes from LCDs• Textile and apparel assembly

Sewing: horns to iron needles 1300s MDCs assemble clothes due to markets

Cotton 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.

Land• Rural sites:• Cities

• attractive situation and site• large local market and shipping by rail to the national market• labor and capital• Negative cite factor for a city= LAND

• Early factories = multistory• Price:

• cheaper in suburban or rural locations • Expensive in the center of a city

• truck transport= factories located near major highways • clustered in industrial parks located near suburban highway junctions

• Environmental factors• Attractions • From coal to electricity:

• 20th century• Industries with a high demand for electricity choose locations based on

lower electrical rates• Aluminum industry= dams

Capital • Manufacturers borrow funds to establish new factories or expand existing ones• The ability to borrow money has become a critical factor in the distribution of

industry in LDCs:• Unstable political system• High debt• Ill-advised economic policies

• Michigan:• Hub of motor-vehicles due to the eastern banks NOT lending

money• Silicon Valley:

• People are more willing to RISK money on new technologySite Selection for Saturn

• GM 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 MDCs• United States: Interregional shift

• Northeast TO South and West• Europe: relocation to economically distressed peripheral regions

• Right-to-work laws:• Predominate in the south • Open-shop vs. closed-shop= don’t have to join a union/MUST join a union• Gulf Coast = important industrial area

• Textile production • U.S.: shifted from Northeast (New York) to the Southeast

• 1950s: easy reach to markets from opened highway system• Interregional shifts in Europe

• Manufacturing diffused from northwest to South and Eastern Parts• CONVERGENCE: east and southern Europe/ bad economies• COMPETITIEE AND EMPLOYMENT REGIONS:

• western Europe• core industrial areas• manufacturing job loss

• Changing 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 regions

• China, Japan, South Korea (LEADING producer of container ships)• South Asia: lead by India

• Fastest growing textiles and motor-vehicle economy• India's GDP will= USA by 2050

• Latin America: • nearest low wage region to the United States• Maquiladora plants are in the NORTH of Mexico• Brazil is the leading economy in Latin America

• Changing distributions • Shift seen in steel and clothes• China = worlds leading steel producer at 38%• Labor-intensive regions love LDC’s• Clothes that USED to be made in the U.S. = now made in LDCs because of cheap

transportation costs.

World Steel Production

• Outsourcing• Transnational corporations = aggressive in LDCs

• New international division of labor: • picking LDCs who pay almost NOTHING to employees to cut the cost

of shipping BACK to MDCs• Highly 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 production

• Dominant in the 20th century• Workers on an assembly line repeating tasks• Consumer goods produced at a single site

• Post-Fordist: lean production:• Production dispersed and accelerated around the globe• Teams decide best approach• Problem solving:

• talking rather than paper pushing• Leveling: everyone is on the same level

• Just-in-time delivery:• Strict timetables• Saves money on STOCKED inventory• 2 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

opportunities• Microloans have provided opportunities for women to create small local businesses,

which have improved standards of living

Chapter 12 Serviceshttps:// www.ted.com/talks/lisa_kristine_glimpses_of_modern_day_slavery

Key Issue #1: Where did services originate?Services• any activity that fulfills a human want or need!• located in settlements• Location is important for profitability • Affluent regions tend to offer more services

Three types of services1.Consumer services

About 44 % of all jobs in the United Stateso Retail and Wholesale Serviceso Education Serviceso Health Serviceso Leisure and Hospitality Services

2. Business services About 24 % of all jobs in the United States Financial sector Professional services Transportation and information services

3. Public services About 17 % of all jobs in the United States Federal, state and local government workers

Changes in the # of Employees United States: all employment growth occurs in the services sector Growth: engineering, management, law, data processing, advertising Decline: transportation and finance

o Efficiency!

Services in early rural settlements• Early consumer services

societal needso burial of the deado religious centerso manufacturing centers

• Early public services: religious• Early business services: food

Services in early urban settlements• Services in ancient cities

Earliest urban settlements: Ur in Mesopotamia or present day Iraqo “Fire”: Abraham 1900 B.C.o Titris Hoyuk: well patterned

Ancient Athens:o Govt/ military protection and public services for surrounding hinterlandso Athens was the largest

Characteristic urban settlementCulture AND public services

Other examples:o Knossos on the Island of Creteo Troy in Asia Minoro Mycenae in Greece

• Services in ancient cities Ancient Rome:

o 250,000 peopleo “all roads lead to Rome”o Extent of its empire allowed for the establishment of administrative centerso Contracted roads, aqueducts, securityo Rome fell in the 5th century

• Services in medieval cities Cities reemerged in the 11th century Urban residents: ONCE GIVEN A charter, started to trade Power centers:

o Lordo Churcho markets

Largest settlements were in Asia European cities developed with feudalism

Key Issue #2: Where Are Contemporary Services Located?

Services in rural settlements Dispersed rural settlement: typical in North America 50% of the world lives in rural settlements Two types of rural settlements:

1. Clustered o Works when the population is low!o Circular:

Kraal Villages: South Africa Gewandorf: Germany

Studied by Von Thuneno Linear:

St. Lawrence river Quebec French Long-lot system:

Houses erected along rivers French law= sons inherit equal portion of estate Rows constructed inland

o In Colonial America around a “common” area

Church School Homes Public buildings

Favored by New Englanders because: Traveled in a group Shared culture encouraged close living Indian attacks!!!

2. Dispersed rural settlementso United States:

Middle Atlantic colonies Germany, Dutch, Irish, Scottish, Swedish, English

o ALONE Bought land individually

Dominated American Midwest 1700s: New England dispersed replaced clustered

o Europeans converted clustered to dispersed with new technology!o Great Britain

Enclosure movement 2nd agricultural revolution technology 1750-1850 British government consolidated agricultural land

Rural Settlement Patterns 1800: only 3% of Earth lived in cities

o Beijing was the only city to have over 1 million 2000: 47% of people live in cities:

o 400 cities with over 1 million people

Services in urban settlements Differences between urban and rural settlements

o 1930s Louis Wirth: Believed that what sets cities apart from rural areas are their: Large size: different social relationships

Rural: know everyone Urban: know very few

High density: Everyone has a specific role!= specialization Very competitive

Social heterogeneity: Urban: More freedom yet lonely Rural: less freedom to be YOU but more connected

Increasing percentage of people in citieso Large # reflects developmento 75% MDC to 40% LDC:

exception LATIN AMERICA: closer to MDCso Due to: 19th cent Industrial Revolution and 20th cent growth of services

Increasing % of people in citieso LDCs experience being pushed from farms but are not sure of jobs in cities because of growth in

population Increasing number of people in cities

o MDCs have higher % of urban residents BUT LDCs have more of the large urban settlementso So they are urban…SHOULDN’T THEY HAVE ECONOMIC DEVELOPMENT?o 50% growth from Migration from the countrysideo 50% results from high natural increase rates

Analyze the causes and consequences of international trade and growing interdependence in the world economy• Complementary and comparative advantage establish the basis for trade:

• Ex. Four Asian Tigers• South 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 electronics• high quality-university and primary education system• access to worldwide markets thanks to port cities like Pusan and Kwangju

• 2. Taiwan: Who controls Taiwan? • The United States recognizes Taiwan as independent due to their more

capitalist economic system• China claims Taiwan is a part of their country. • Grown in economic status due to exports with Kaohsiung handling most

exports• 3. Singapore: example of an entrepôt; 

• busiest port in the world• one 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 regions• 4. Hong Kong:

• Britain gave up its control of this port in the 1990s • Example of an entrepôt   with its main industry being the re-export of industrial

products especially those made in mainland China• International 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 crises• shift in manufacturing to newly industrialized countries• imbalances in consumption patterns• the roles of women in the labor force

Explain how economic restructuring and deindustrialization are transforming the contemporary economic landscape• Outsourcing and economic restructuring have led to:

• a decline in jobs in manufacturing regions • the relocation of a significant segment of the workforce to other areas

• In countries outside the core, the diffusion of industry has resulted in the emergence of the international division of labor and manufacturing zones

• Maquiladoras• special economic zones

• free trade zones• The contemporary economic landscape has been transformed by the emergence of:

• service sectors• Technopoles: high technology industries and growth poles:• Silicon Valley• Research Triangle

• Government initiatives at all scales may help promote economic developmentAnalyze sustainability issues related to industrialization and development • Sustainable development addresses issues of:

• natural resource depletion• mass consumption• the costs and effects of pollution• the impact of climate change• issues of human health, well-being, and social and economic equity

• Ecotourism is a strategy used by some countries to help protect the environment and generate jobs!