Industrial production began long before the Industrial Revolution Goods and products were made in numerous

places

Most interesting relationship was Britain & India (their colony) ▪ India’s products became so good that Britain tried to cut

off Indian imports

Commercial companies either started or urged European colonialism in many places

1700s

New energy sources emerged (coal)

New machines improved efficiency (steam engine) Late 1700s/Early 1800s

Flow of capital began from the colonies

Increased capital led to increased investment

▪ Which led to an invention boom

Coal was used to smelt iron & in making cast iron

Steam engine led to high speed thread spinning; as well as the emergence of the railroad & faster ocean shipping

Flow of Capital into Europe, 1775 Needed flow of capital in order to fuel the industrial revolution.

Britain was really the only country to initially benefit from these innovations

Held a monopoly over certain goods

Was the only continent to really possess the skills necessary to make this machinery

The first manufacturing plants were built close to coal fields & close to a canal or river travel system

Eventually this manufacturing development diffused eastward in Europe to places like Germany

Consequently many cities emerged as major port cities…none more so than Rotterdam in the Netherlands

Diffusion of Industrial

Revolution

Many “location theories” exist

These are theories that try to predict where businesses will or should be located

These are much more complicated than von Thunen’s model

Von Thunen’s work focuses on primary economic activities(farming, sales of agricultural products/meat/dairy/etc)

Location theories try to include all economic activities(secondary, tertiary, quaternary, quinary)

Assumption is that each company tries to maximize their advantages in an effort to increase profit

Examples of these assumptions/goals:

Decrease production cost

Decrease energy usage

Decrease labor cost

Decrease time of transport

▪ Fancy term is “friction of distance”, which means that as distance increases, the time & cost will increase

Picking a location that allows for easier production & transport

Picking a location where resources are plentiful These are aspects of von Thunen’s model as well

But again, his focus was on agriculture

Theory #1:

Alfred Weber’s model---”Least Cost Theory”

▪ His model explains why manufacturing plants are placed where they are(his model is to secondary activities as von Thunen’s is to primary activities)

▪ The location of a manufacturing plant is based on the owner’s desire to minimize three categories of costs

▪ http://teacherweb.ftl.pinecrest.edu/snyderd/APHG/Unit%207/weber.htm

Three categories

1)Transportation---site must create the lowest possible cost of moving raw materials TO the factory and finished products FROM the factory to market

2)Labor---cheaper the labor the better

3)Agglomeration---means the more companies & businesses that are nearby means the more assistance they can provide

▪ Sometimes too much agglomeration can lead to higher rents, rising wages nearby and other problems---some factories therefore leave those places(this is called “deglomeration”)

A major element of Least Cost Theory is weight

How much do the resources weigh?

How much does the finished product weigh?

If there are multiple resources, which one weighs more?

▪ All of these things have a huge impact on manufacturing plant placement

Theory #2:

Harold Hotelling’s model

▪ Focused on the issue of “locational interdependence”

▪ Location of an industry cannot be understood without reference to the location of other industries just like it

▪ #1 goal is to maximize sales

▪ http://ingrimayne.com/econ/International/Hotelling.html

The

Hotelling

Model

Added the spatial influence of consumer demand and production costs to calculating manufacturing plants

These major models, along with others, try to explain where industries are located

Before the 1950s and 1960s, the major costs for industries were transportation costs of raw materials & shipment of finished products

Therefore, most manufacturing areas were close to raw materials & transportation routes

Four major ones were initially Western/Central Europe, Eastern North America, Russia/Ukraine & East Asia

One major additional cost to transportation is called “break-of-bulk point” cost

Costs of transporting cargo from one mode of transportation (like a ship) to another form (like a truck or train)

BREAK INTO GROUPS…EACH GROUP READS ABOUT A SECTION AND

TEACHES THE CLASS

Group 1: 390 (Western & Central Europe to where it says North America)

Group 2: 391-395 (North America to where it says former Soviet Union)

Group 3: 395 (The Former Soviet Union to where it says Eastern Asia)

Group 4: 395-398 (Eastern Asia)

20th century was all about a manufacturing boom Mass-production assembly line pioneered by Henry Ford

was the most significant innovation

20th century was the “Fordist” era 21st century has been and will continue to be “Post-

Fordist”

Instead of mass production, manufacturing is more about dispersing production, outsourcing it and bringing places closer together

▪ “Geography is history…distances don’t matter anymore”

Multinational companies have moved labor-intensive manufacturing to peripheral countries where labor is cheap, where there are few regulations and where tax rates are low

This is not an accident---its 100% with purpose Manufacturing jobs in the core today are highly

mechanized, have a high cost of transportation for finished products and rely on regional(not global) consumption

More core jobs are technology based(require expertise & core infrastructure)

Fig. 11-22: Hourly wages can be under $1 in many LDCs compared to well

over $10 in many MDCs.

Trade agreements have transformed industrial production

NAFTA & EU are regional (over 300 regional agreements exist)

The WTO (World Trade Organization) contains 148 country members---they work to negotiate rules of trade among fellow members

Changing costs of transportation & energy have a huge impact on manufacturing costs & industrial location

Over the last couple of decades, “deindustrialization” has occurred

Process where companies move industrial jobs to other regions with cheaper labor

Leaves a place with higher unemployment and more dependent on services

Consequently, new places become industrial centers Europe & the USA have several deindustrialized areas

In USA: mostly the northeastern USA/Great Lakes area; has led to a population decrease in those areas

Fig. 11-17: States in the Northeast and Southern Great Lakes traditionally

associated with manufacturing accounted for two-thirds of

manufacturing in 1950 but only two-fifths of manufacturing in 2005.

Fig. 11-1: The world’s major manufacturing regions are found in North America, Europe,

and East Asia. Other manufacturing centers are also found elsewhere.

Fig. 11-20: Developed countries accounted for 80%

of world production in 1980 but only

45% in 2005. LDCs increased from

20% to 55%. China is now the world’s

largest producer.

The heart of the industrial world today is in Asia(specifically Eastern & Southeastern Asia)

Includes Japan, Singapore, South Korea, Taiwan, other countries & islands in Eastern Asia

Also includes the country of China

CHINA Major industrial expansion occurred during the early

communist period

Large labor force is attractive for global companies

A major recipient of industrial work that is outsourced or moved offshore from other countries

Today, industrialization is pushing into the interior of China, which has largely remained rural

Northeast District (formerly Manchuria) is the industrial heartland, followed by Shanghai

▪ Has become China’s Rust Belt

Since the 1970s, the core countries have moved from being industrial based to service based

We call service based activities “tertiary”

Some call services involving the collection, processing & manipulation of information as “quaternary activities”

Some call activities that include complex decision making and research as “quinary activities”

In the developed world today, secondary jobs are not as prevalent as tertiary, quaternary & quinary activities

Fig. 12-1: Services contribute over two-thirds of GDP in more developed countries,

compared to less than one-half in less developed countries.

The growth of these types of jobs is known as “postindustrial growth”

Deindustrialization does not necessarily mean economic decline for regions For some places it does, for some it actually spurs growth

Costs are different for service based companies Not worried about transportation costs or costs relating to

raw materials

These businesses can really operate anywhere---competition between cities, states & even countries for these companies is fierce

Fig 12-2: Growth in employment in

the U.S. since 1970 has

been entirely in the

tertiary sector, with the

greatest increase in

professional services.

Just like industrial jobs, quaternary based jobs are also targets of outsourcing

Call centers in India are a great example

Quinary jobs tend to be concentrated near a country’s capital(for research), near corporate headquarters or near major universities

The existence of the “technopole” is another interesting phenomenon

Read pages 386-387 starting at “High-Technology Corridors”

High Tech Corridor Area designated by local or state government to

benefit from lower taxes and high-tech infrastructure with the goal of providing high-tech jobs to the local population

Can also be supported by federal government

Goal is to attract high tech designers ▪ Silicon Valley (near UC Berkeley and Stanford)

▪ Route 128 (near Harvard and MIT)

▪ Plano-Richardson Telecom (north Texas)