industry and economic development chapter 11: industry

Industry and Economic Development

Chapter 11: Industry

Industry

• Secondary sector• Loss or relocation of manufacturing jobs• Financial incentives to keep jobs in a region• Incentives often considered excessive• Industry more clustered than agriculture

– Based on land, labor, and capital (investment money)– Based on location/connections relative to markets & resources

• Was clustered in a few MDCs; now diffused to more LDCs due to lower wages and growing markets

• Maquiladoras – special factories typically owned by U.S. companies; located in northern Mexico near border; produce goods typically for sale in U.S. markets; low wage labor; easy access to U.S. markets

Key Issue #1: Where is Industry Distributed?• ¾ of Industrial productivity clustered in 4 regions (less than 1% of

Earth’s land vs. 25% for agriculture)① Western Europe

– Grew because of proximity to raw materials (coal & iron ore) & proximity to markets (large, wealthy populations)

1) United Kingdom• Dominated world manufacturing during 1800s – cotton fabric (textiles), iron & coal

(steel)• Industrial Revolution began in Northern England & Southern Scotland in late 1700s –

industrial tech, farming tech, transportation, etc. (higher standards of living)• Factories eventually aged & deteriorated; Britain lost power in early-mid 20th century• West Germany & Japan became leaders after WW2 with U.S. assistance in building

factories• Recent industrial expansion with high-tech industries, lower taxes, reduced

government regulation, privatization of formerly public industries• Autos (Rolls-Royce, Jaguar, Aston Martin, Bentley, Mini, Range Rover)• Generally locate near Southeastern England (London area)• Channel Tunnel (“Chunnel”) – road & RR connection to mainland Europe under

English Channel

Key Issue #1: Where is Industry Distributed?

① Western Europe2) Rhine-Ruhr Valley

• U.K. diffused Industrial Revolution to rest of Europe• Belgium – developed new coal-mining technique• France – Coal fired blast furnace for iron• Germany – industrial cotton mill• Industrial Revolution & railroad slowed by political instability – French

Revolution (1789-1799), Napoleonic Wars (1796-1815), Germany not unified until 1870s

• Rhine-Ruhr includes NW Germany, Belgium, NE France, Netherlands• Ruhr is a tributary of the Rhine River• 20 million people – Germany (Cologne, Bonn, Dortmund, Dusseldorf, Essen),

Netherlands (Rotterdam, Amsterdam), Belgium (Brussels, Antwerp, Liege), France (Lille)

• Rotterdam – one of the world’s largest & busiest sea ports; where Rhine meets North Sea

• Iron & steel – close to large coalfields• Heavy metal industries – locomotives, machinery, & armaments


① Western Europe3) Mid-Rhine

• SW Germany, France, Luxembourg• Lacks some raw materials, but at center of important consumer market

(population center)• Center of EU & “Blue Banana” (Europe’s Megalopolis)• Grew after WW2 with West Germany• Germany

– Frankfurt – financial, commercial, & transportation hub– Stuttgart – high value goods, skilled labor, Daimler, Mercedes Benz, Porsche– Mannheim – chemicals, synthetic fibers, dyes, pharmaceuticals– East of Mid-Rhine region: Bavaria/Munich (BMW, Audi); Wolfsburg (Volkswagen)

• France – Alsace & Lorraine regions (largest iron ore field in Europe); steel region

• Luxembourg – Lorraine iron ore region; one of world’s leading steel producers


①Western Europe4) Northern Italy

• Cities of Turin & Milan• Southern & Eastern Europe joined Industrial Revolution in

early 20th century• Po River Valley – textiles; 1/5 of Italy’s land but ½ of

population & 2/3 of its industry• Inexpensive power from hydroelectricity; proximity to Alps• Numerous workers willing to accept low (by Europe’s

standards) wages• Produce automobiles (Fiat, Ferrari, Maserati, Lamborghini,

Abarth, Alfa Romeo), process raw materials, assemble mechanical parts


② Eastern Europe– 5 in Russia (4 European, 1 Asian), 1 in Ukraine, 1 in Poland/Czech

Rep.1) Central Russia Industrial District

• Oldest industrial region of Russia; near Moscow (capital & largest city)• Few resources, but close to largest market• ¼ of Russia’s industrial output• Higher value goods, large pool of skilled workers needed – textiles (linen,

cotton, wool, silk), chemicals, light industrial goods

2) St. Petersburg District• 2nd largest city in Russia/Eastern Europe• RR came to St. Petersburg earlier than rest of Russia (more connected

with Europe)• On Baltic Sea – shipbuilding, industries for Russia’s navy & ports• Food processing, textiles, chemicals for local markets


② Eastern Europe3) Volga District

• Planned by USSR in 20th century• Volga & Kama Rivers, hydroelectricity• Grew during WW2 when Germany occupied Central District & Eastern

Ukraine• Largest petroleum & natural gas fields in Russia• Motor vehicles at Togliatti, oil refining in Kuybyshev, chemicals in Saratov,

metallurgy in Volgograd, leather/fur in Kazan

4) Ural District• Planned by USSR in 20th century; Ural Mts. – over 1,000 mineral types• Iron, copper, potassium, manganese, bauxite (aluminum), salt, tungsten• Steel, iron, chemicals, machinery, metal fabricating• Development hindered by lack of nearby energy sources – had to ship coal

900 miles from Volga-Ural, Bukhara, & Central Siberia• Includes southern Urals in Kazakhstan


② Eastern Europe5) Kuznetsk District

• Planned by USSR in 20th century in Asia/Siberia due to proximity of resources

• Most important industrial region in Russia east of Urals• Largest coal supply in Russia, abundant iron ore• Iron, steel, other factories

6) Eastern Ukraine• Donetsk coalfield – one of largest in world• Abundant in iron, manganese, & natural gas• Located on Black Sea/Sea of Azov• Largest producer of pig iron & steel

7) Silesia• Southern Poland & northern Czech Republic• Steel (very productive coalfields) but must import iron


③ North America– Industrialized later than Britain & Western Europe; mainly agricultural after

independence– Labor & capital was scarce in U.S. – manufacturing was expensive– Shipping was also expensive back and forth to Europe– 1st textile mill at Pawtucket, RI in 1791 by Samuel Slater (had worked at

Arkwrights in England)– U.S. embargo on European trade in 1808 to avoid involvement in Napoleonic

Wars – caused domestic textile industry to grow rapidly– U.S. became 2nd leading industrial country behind Britain by 1860 – textiles,

food processing, lumber processing, iron & steel (late 1800s)– Industry clustered near coasts, canals, navigable rivers prior to 1850 (railroad)– Industrial area: mainly NE U.S. & SE Canada (5% of land, 1/3 of pop., 2/3 of

manufacturing)• 1st European settlement, tied to European markets, infrastructure in place• Raw materials (iron, coal); transportation (Great Lakes, St. Lawrence R., Mississippi R.,

Ohio R.); connected to West by RRs, trails/hwys, canals, rivers


③North America1) New England• NH, MA, RI; centered around Boston• Oldest industrial region in U.S.; cotton textiles in early 1800s

(imported cotton from South)• Shipped textiles to Europe; abundant inexpensive immigrant labor

in 1800s (from Europe)• Now – abundant, skilled but expensive labor• High-tech industries; proximity to education

2) Middle Atlantic• NY, CT, NJ, PA, DE, MD; cities of NYC, Philadelphia, DC, Baltimore,

Richmond, Wilmington• Largest U.S. market (many consumers)• Must import raw materials (major port city)• Communications, finance, entertainment


③North America3) Mohawk Valley• Upstate NY (Buffalo)• Along Hudson River, Erie Canal, Lake Erie, Lake Ontario• Steel, food processing, aluminum, paper,

electrochemical• Niagara Falls – inexpensive, abundant hydroelectricity

4) Pittsburgh-Lake Erie• PA, OH (Pittsburgh & Cleveland)• Most important steel region in 1800s• Close to Appalachian coal & iron ore• Other industries that use/assemble steel


③ North America5) Western Great Lakes

• OH, IN, MI, IL, WI; Toledo, Detroit, Chicago, Gary, Milwaukee• Lake Erie, Huron, Michigan• Chicago – 3rd largest city in U.S.; dominant interior city; transportation

hub (air, water, road, rail)• Detroit – automobile industry hub• Machine tools, transportation equipment, agricultural machinery, food

products, clothing, furniture

6) St. Lawrence Valley-Ontario Peninsula (in Canada)• Southern Canada on U.S. border• Central to Canadian market/population center• Close to Great Lakes & St. Lawrence River Seaway• Niagara Falls (hydroelectricity)• Hamilton – steel; Toronto – automobiles• Aluminum, paper, flour mills, textiles, sugar refining

Key Issue #1: Where is Industry Distributed?④ East Asia– China, S. Korea, Japan, Taiwan– Isolated from world markets; shortage of essential resources– Most abundant resource = large labor force– Japan – became a world industrial power post-WW2 (1950s - 60s);

produced goods in large quantities at low prices due to low labor costs in spite of high shipping costs; now has transformed into highly skilled/trained workforce

– South Korea, Taiwan, & other Asian countries followed Japan’s lead with even lower labor costs

– 1970s & 80s – Japan turned to high quality electronics, precision instruments

– Japan now the leader in automobiles, ships, cameras, stereos, TVs– Japanese autos/engines – Toyota/Lexus, Honda/Acura,

Nissan/Infiniti, Suzuki, Mazda, Mitsubishu, Subaru, Isuzu, Kawasaki, Yamaha

– South Korea autos – Hyundai, Kia, Daewoo

Key Issue #1: Where is Industry Distributed?④ East Asia

– Japan’s industrial regions between Tokyo & Nagasaki1) Tokyo-Yokohama (Kantu Plain)2) Osaka-Kobe-Kyoto (Kinki Plain)3) Nagoya (between Tokyo & Osaka)

– China – world’s 2nd largest manufacturer in output, largest in workforce; world’s largest market by number of consumers; clustered in eastern coastal portion of China

1) Beijing-Tianjin2) Shanghai-Nanjing-Wuhan (on Yangtze/Chang Jiang)3) Guangzhou-Hong Kong-Shenzhen

– Special Economic Zone (SEZ) – any area with unique economic laws/regulations (customs, duties, etc.); includes free ports, entrepot, Export Processing Zones (EPZs), Free Trade Zones (FTZs)

– EPZs – typically in LDCs; attract manufacturing operations for export– FTZs – lack of customs oversight; typically at ports, airports– China has established over 200 SEZs since 1980 to allow more market-

oriented economic activity

industry and economic development chapter 11: industry

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