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Services &Settlements

• Services• Central Place Theory• Cities & Services• Rural Settlements

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According to your book "A service is any activity that fulfills a human want or need and returns money to those who provide it."

This is a definition it's fairly easy to poke holes in - charitable services don't charge, so are they still services?

The dictionary has what may be a slightly better definition: service \ 's«r-v«s \ n. [ME, fr. OF, fr. L. servitium condition of a slave, body of slaves, fr. servus slave] 4b. useful labor that does not produce a tangible commodity.

Services: Terms

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People have always provided other people with services.

However, from a very early period, services have tended to cluster in communities.

Early services: Burial and religion. Food storage. Education and entertainment Trade. Defense.

Origins of Services

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Traditionally, economists have divided economic activities into three categories: PRIMARY - those economic activities that harvest

or extract directly from the natural environment (agriculture, forestry, fishing, mining).

SECONDARY - those economic activities that involve manufacturing, construction, or adding value to the products of the primary industries.

TERTIARY - the service sector. Most people in the developed world work in

the service sector of the economy - in the US, about 80% of all jobs are in the service sector.

Economic Categories

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We can break the service sector down further into three categories: CONSUMER - services provided mostly to

individual consumers. BUSINESS - services provided mostly to facilitate

other businesses. PUBLIC - services provided for all citizens and

businesses. Although your book acts at times as if these

were neat water-tight compartments, they aren't - as even your book notes in a thundering understatement when it admits that "the distinction among services is not absolute."

The Service Sector

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Consumer services are provided to individuals.

About half of all US jobs today are in consumer services.

There are four main categories of consumer services: RETAIL

Please note: Your book, in a bizarre fit of insanity, has categorized wholesaling as a form of retail service!

EDUCATION HEALTH SERVICES LEISURE AND HOSPITALITY

Consumer Services

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Business services are provided to other businesses.

About 25% of all US jobs today are in business services.

There are three main categories of business services:

FINANCIAL SERVICES “FIRE”: Finance, Insurance and

Real Estate PROFESSIONAL SERVICES TRANSPORTATION AND

INFORMATION SERVICES Does this really make sense?

Don’t individuals need insurance? Transport? Information???

Business Services

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When we say “public” we’re usually saying government.

Public services are provided to everyone - individuals and businesses. They include security and protective services (and administrative services, too – but not educators, who are included under consumer services): 15% Federal government 25% State governments 60% Local governments

About 16% of all US jobs today are in the public sector (mostly at the State and local levels).

Public Services

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Consumer: 50%Business: 25%Public: 16%

>80% of all US jobs are in the service sector!

So – Add it Up!

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U.S. Jobs by Sector, 1972-2009

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Service Sector: Top 20 Countries (2011)

CountryOutput

(billions $)United States 12,015Japan 4,203China 3,146Germany 2,525France 2,204UK 1,881Brazil 1,670Italy 1,614Canada 1,233Russia 1,084Australia 1,063Spain 1,060India 945Mexico 716South Korea 650Netherlands 614Turkey 487Switzerland 454Belgium 398Sweden 382

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2011 Output (billions $)

Every city provides both consumer and business services. But not every city has the same number or kind of services. And consumer services and business services do not necessarily have the same distributions.

Consumer services tend to show a pattern based on the size of settlements.

Business services tend to cluster very heavily in certain major cities.

Distribution of Services

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In the 1930s the German geographer Walter Christaller devised a way of describing how towns of different sizes were arranged - and how the services they supply is also arranged. This is called central place theory.

A central place is a market center. Central places (ideally) are located centrally - to

maximize access from the surrounding region. Central places compete against each other to

market goods and services. Surrounding every central place is a market area

(or hinterland) - the area from which customers come to the central place.

Central Place Theory

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Christaller’s Reality

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We assume we are dealing with a flat, featureless plain - no mountains, rivers, deserts, etc.

Labor is assumed to be available in all locations, and the population is evenly spread across the landscape.

Transportation is possible in all directions - there are no major rivers or roads to distort the pattern.

People will always travel the minimum distance necessary to get the goods and services they want.

The size of the market area is determined by two factors: the range and the threshold

for each service offered in the central place.

Assumptions of Central Place Theory

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The range of a good or service is the maximum distance people are willing to travel.

Range varies with the kind of service: Everyday goods and services (groceries,

dry cleaning, etc.) have short ranges - people are not willing to travel very far for them.

Special goods and services (sporting events, concerts, etc.) have long ranges - people are willing to travel long distances for them.

Range

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The threshold is the minimum number of people (customers) needed to support a good or service.

Threshold varies with the kind of service: Businesses selling common, inexpensive items

(groceries, fast food, etc.) need large numbers of customers who spend relatively small amounts of money.

Businesses selling expensive, uncommon items (jewelry, antiques, etc.) need small numbers of customers who spend large amounts of money.

Businesses spend a great deal of time and money engaged in market area analysis when they select the best location for a business.

Threshold

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Hierarchy of Consumer Services

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• Market areas don’t exist in isolation – they’re nested, with larger centers having larger market areas, and within those areas smaller centers serving smaller market areas.

• Ideally, we would use circles to show these relationships, but since you can't cover a plane with circles evenly, we use a hierarchy of interconnected hexagons.

Central Place Theory: Summing Up

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• Central places are market areas.• Central places compete against each other.• Small settlements only offer a small number

and a small variety of services.• Larger settlements offer a greater number and

a greater variety of services.• Settlements arrange themselves in a nested

hierarchy - small market areas within larger market areas, within still larger market areas.

• Obviously, the real world is more complicated than central place theory - but central place theory does give us insights into the ways that services and settlements tend to be arranged.

Minot, ND (pop. 41,000) is an example of a city which has developed relative to Central Place Theory: with 7 small towns, 15 villages, and 19 hamlets spreading out in a ‘hexagonal manner’. Identify, according to the Rank-Size rule how

large the second largest settlement should be if the Rank-Size rule is accurate.

Identify and Explain two (2) factors which would explain why settlements become smaller as distance increases from Minot.

Analyze two (2) common assumptions about the Central Place Theory that might not hold up in a different large market city. 20

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Rank-Size vs. Primate City

Different sizes of cities have different numbers and varieties of services.

By ranking the cities in a country by population we can get an idea of how services are distributed.

Many countries follow the rank-size rule – cities follow a regular pattern (the second largest is ½ the size of the largest, the fourth largest is ¼ the size of the largest, etc.)

In some countries there is a primate city – one large city more than twice as big as any other city, which dominates politically, culturally and financially.

Countries that follow the rank-size rule have a wide distribution of goods and services. Primate city rule countries do not.

Market Area Analysis

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• In a primary industry you have to locate where the resources are. In secondary and tertiary industries you can choose your location.

• By analyzing range and threshold characteristics, business can choose (in theory) an optimal location.

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Distribution of Cities

What’s the difference between a “town” and “city?” Different countries have different criteria.However, we can use common sense – and by any reasonable standard, we can say that we live today in an urban world.

Source (11-19-01): http://www.gsfc.nasa.gov/gsfc/earth/pictures/citylights/flat_earth_nightm.jpg

Urbanization

“Urbanization” is the process by which cities grow, and more and more people come to live in cities.

It’s made up of both the growing number of people living in cities and the increasing percentage of people living in cities.

Since 1800 both of these have been increasing – and recently, they’ve increased a lot.

Today, for the first time in history, most people on earth live in cities.

World Population: Percent Urban1800 3% 1850 6%1900 14% 1950 30%2000 47% 2010 50.5%

Data source: http://esa.un.org/unup/

Changing Rates of Urbanization

There is greater urban population today in the More Developed Countries.

There is greater urban growth today in the Less Developed Countries.

Globally, the rate of urbanization is increasing by about 1.85% per year.

The World’s Largest Cities

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Today there are 177 cities with populations over 2 million 100 cities with populations over 3 million 55 cities with populations over 5 million 22 cities with populations over 10 million 3 cities with populations over 20 million

Source: http://nordpil.com/go/resources/world-database-of-large-cities/

There are 9 cities in the US with populations over one million.

There are at least 90 cities in China with populations over one million.

WORLD CITIES World cities are outstanding centers for business services. The most important world cities are New York, London, Tokyo

and Paris. COMMAND AND CONTROL CENTERS

Outside the world cities are regional centers – which are also major financial and business centers (but not quite as important).

SPECIALIZED PRODUCER-SERVICE CENTERS Cities that provide a narrower range of services, specializing

in activities such as research, government or education. DEPENDENT CENTERS

Cities which are dependent for their economic health on the decisions that are made by those above them in the hierarchy.

Dependent centers provide less skilled jobs, and specialize in certain areas, including:

Resort, retirement and residential Manufacturing Industrial and military Mining and industrial

Distribution of Business Services

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A Slightly Different Approach:Global Urban Metageography

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• The Globalization and World Cities (GaWC) Study Group has a slightly different interpretation of “world cities”; it has ten “alpha world cities.”

• According to this scheme New York, Chicago, and Los Angeles; London, Frankfurt, Paris and Milan; and Tokyo, Hong Kong and Singapore are all "alpha" cities.

Source (4-16-2006): http://www.lboro.ac.uk/gawc/citymap.html

US Cities: The Business Services Hierarchy

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Less developed countries may offer specialized business services: Offshore financial

services (low/no taxes, bank secrecy laws, short statues of limitation)

Business-process outsourcing (or “back-office functions”) – basically clerical and service functions.

Business Services in LDCs

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The Cayman Islands – a population of 55,000 and 60,000 corporations (including 6,000 hedge funds and nearly 300 banks) – with no taxes.

Call centre in Bangalore – nearly half a million people in India work in places like this today.

Sources): http://gocaribbean.about.com/od/caymanislands/Cayman_Islands.htm; http://www.washingtonpost.com/wp-dyn/articles/A56474-2005Feb26.html; http://www.telegraph.co.uk/news/worldnews/1530907/Call-centres-are-blamed-for-a-rise-in-loose-living-among-Indias-affluent-new-elite.html

There are two categories of economic activity we can use to understand how settlements function: the basic and the non-basic economic activities.

The difference? Think in terms of survival.

Urban “Base” and “Non-Base”

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Question: What are the things you need to survive?

Answer: Air, food, water, shelter. These are things you can't provide for

yourself – they are basic to your survival and they come from outside.

Basic industries supply goods and services to people outside the settlement - they "export" goods and services to bring in money from outside.

Basic industries are essential to a settlement's survival.

Some US cities today have a mining or manufacturing base; most are primarily in the service sector.

Basic Activities

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Question: What are the things you need to have a decent life?

Answer: Friends, family, entertainment, culture. These are things you (and your friends and family)

can provide for yourselves – locally – you don't have to get them from outside.

Non-basic industries provide goods and services to people who already live in the settlement.

Non-basic industries are essential to a settlement's well-being (but not its survival).

Cities can be classified based on the percentage of people who work in the basic and non-basic industries.

Cities of similar sizes tend to have similar ratios of basic and non-basic workers - but the larger the city, the larger the percentage of non-basic industries.

Non-Basic Activities

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Rural Settlements Though the world has been urbanizing, nearly half the world’s population still live in rural settlements.

There are two basic types of rural settlement: CLUSTERED. DISPERSED.

Picture sources: http://exploringafrica.matrix.msu.edu/students/curriculum/m20/activity3.php; http://www.toursgallery.com/home_imgs/Thatch-rural-village.jpg; http://content.lib.washington.edu/cdm4/item_viewer.php?CISOROOT=/buildings&CISOPTR=7397

Clustered settlements are also known as a villages or hamlets.

In clustered settlements everyone lives in a relatively small area.

Farmland is usually located within about two hours journey from the village.

Farmland may be individually or collectively owned.

Clustered rural settlements may be circular or linear, depending on local culture and conditions.

Clustered Settlements

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In the dispersed pattern of rural settlement farmers live on individual farms, isolated from their neighbors.

The dispersed pattern of rural settlement isn’t common except in the US, Canada, Australia, the UK, and other developed countries.

This pattern is only possible where there is little reason to fear attack (or isolation).

Enhanced efficiency: Living on the farm means no travel time, greater farm size, easier use and affordability of machinery.

In some countries (the US, Australia) this pattern was strongly encouraged by various laws (e.g. The Homestead Act).

Dispersed Settlements

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Sod house, Nebraska, 1877

Cities and Civilization

“Civilization” is literally how you live in a city (so is “politics” – how to live in a polis)

The earliest known cities date back at least 8,000 years.

Most early cities were quite small, but some grew very large

Babylon 200,000 (1500 BCE) Baghdad 1,000,000 (700 CE)

Jericho, c. 6800 BCE

Argos, c. 5000 BCE