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Chapter 7 Manufacturing

Fundamental nature of manufacturingprocesses

Major manufacturing regions in the world

Deindustrialization in the developed worldand the rise of manufacturing in thedeveloping world

Sector specific dynamics

The rise of flexible production systems,business process outsourcing & downsizing

(The product life cycle model is not in thischapter again)


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The Nature of Manufacturing

Elements of the manufacturing process:

(a) product design, (b) assembling inputs,

(c) transforming the inputs, (d) marketing

the product

Location decision Weber model again

Value added in each stage of production


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Porters Value Chain

Firm InfrastructureHuman Resource Management

Technology DevelopmentProcurement

Support

Activities

Inbound

LogisticsPrimaryActivities Operations OutboundLogistics Marketingand Sales ServiceUpstream value activi ties Downstream value activities


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Concentration of World Manufacturing

80% of Global Output in Three Regions

How current are these data?

Current role of China?


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Global Distribution Manufacturing

Value Added

North

America

26%

Europe

33%

Japan

14%

China

11%

Other Asia

8%

Rest of World

8%

Source: Calculated from NationMaster.com

U.S. 22.4%


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Shares of Manufacturing Value Added

Source: World Bank World Development Indicators, 2011


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U.S. & Canadian

Manufacturing

Belt: Accounts

For about

Two-thirds ofTotal

Manufacturing

Employment in

The U.S. and

CanadaRise of

MaquiladorasBorder & interior

Mexico

A goodOverview

Of specialized

Versus market

Oriented

manufacturing


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Specialization in the Regional

Distribution of Manufacturing

Some cartograms where area isproportional to employment (using theBEA Economic Area classifications)

The first map shows the actual geometryof the BEA Economic Areas

The following maps depict industries

distributed broadly across the U.S., andindustries that are highly concentrated

These are old maps, but for many lines ofmanufacturing the data are probably

relevant


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BEA Economic Areas As of 1985


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Other Manufacturing Regions

Europe Figure 7.5, Japan - Figure 7.9

Globalization of manufacturing

movement of capacity from U.S. &

Canada, Europe, and Japan to less

developed countries

The new international division of labor

Anatomies of Job Loss


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U.S. Manufacturing Employment

Trend


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Change in U.S. Mfg.

Employment 1960-2000

Post-2000 Trends?


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Deindustrialization in

industrialized countries

The Share of Mfg. may have fallen, but real mfg.output is probably up in all these countries see next slide for WA state


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$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

1967 1972 1982 1987 1997 2002 2007

Output($1972inmillions)

Natural Resources

Food Products

Forest Products

Aerospace

Other Manufacturing

Construction

Transport,

Communications &Utilities

Trade

FIRE

Services

Real Output by Industry WA State


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Anatomies of Job-Loss:

disinvestmentBroadStructural

Trends CorporateAgency The outfallof restructuring SpatialoutcomesMacroscale

causal forces

in the global

economy

Corporate responses

to global trends

Corporate competitive

strategies

Plant openings

Plant closings

In-situ changesEvents

on the

groundBluestone & Harrison - Deindustrialization of America:

The core of B&Hs argument followed a restructuring approach

with the need to restore the drive to accumulate, producing,through spatially distributed effects, a major reworking of the

role of U.S. cities and regions in the geographic distribution

of production.


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Impacts on Manufacturing Jobs in

U.S., Europe and Japan

Job losses in manufacturing in all of theseregions

Replacement has primarily been in

services Occupations created in the services are

frequently very different than occupations

lost in manufacturing, leading to highunemployment rates and incomedeterioration

Assets of Centers of Control


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Assets of Centers of Control

versus Peripheral Regions

Centers of Control Key role in circulation;realizing wealth

Focal point for investment,profits, interest

Focus on forms of capital:FIRE

Occupational dominanceby professionals

Virtuous multiplier

relationships driven byabove points

Support networks of alarge cadre of serviceworkers in lower

occupational categories

Peripheral Regions Key role in creating valuethrough labor pools &resource endowment

Compete with centers for

capital Capital transfers to core;

possible scarcity in periphery

Multipliers chancy: impacts

only if investment comes tothem

Employment fortunesconditioned by waves of

investment and restructuring

No direct transference

Current Spatial Outcomes in the


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Current Spatial Outcomes in the

U.S.

Old centers are having their power erode New centers are rising, based on redistribution

Charlotte NC - banking

or the rise of new industrial spaces

- Orlando-Melbourne (retirement)

- Las Vegas (entertainment)

- Seattle & Atlanta - technology based

manufacturing & information services

The rural renaissance - retirement, footloose

entrepreneurs, recreation, rich people, niche mfg.,

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