Economic Geography Economic Geography

Economic GeographyEconomic Geography

The study of the flow of goods and The study of the flow of goods and services through space, as well as services through space, as well as

how people provide for themselves in how people provide for themselves in different places.different places.

Commodity ChainCommodity Chain

Linking producers to consumersLinking producers to consumers

ClassificationClassification

Underdeveloped, Developed, and Underdeveloped, Developed, and Developing Nations:Developing Nations:• To say a country is underdeveloped To say a country is underdeveloped

would be politically incorrect, in light of would be politically incorrect, in light of the fact that the word underdeveloped the fact that the word underdeveloped had a negative connotations geographers had a negative connotations geographers developed a new way to groups nations developed a new way to groups nations in the core-periphery model.in the core-periphery model.

This model characterized nations into either: This model characterized nations into either: core, semi-periphery, and periphery nations. core, semi-periphery, and periphery nations.

Measures of DevelopmentMeasures of Development

GNP-the measure of all the goods and GNP-the measure of all the goods and services produced by a country in a year. services produced by a country in a year. • Provides a very vague vision of productivity. Provides a very vague vision of productivity.

For it fails to account for the lost through the For it fails to account for the lost through the exploitation of natural resources.exploitation of natural resources.

GDP- similar to GNP but it omits any GDP- similar to GNP but it omits any investments abroad.investments abroad.

Example: Japan has a huge amount of Example: Japan has a huge amount of investments abroad there for the GNP investments abroad there for the GNP would be significantly larger than the GDP.would be significantly larger than the GDP.

ClassificationClassification Characteristics of a Characteristics of a

Core Nation: Core Nation: • Have achieved high Have achieved high

levels of socioeconomic levels of socioeconomic prosperity and high prosperity and high standards of livingstandards of living

• Contain world cities Contain world cities such as London, Tokyo, such as London, Tokyo, and New York which and New York which serve as global centers serve as global centers of economic activity. of economic activity.

• These nations include These nations include the U.S., Germany, the U.S., Germany, Great Britain.Great Britain.

• Technology, Education, Technology, Education, ResearchResearch

Characteristics of a Characteristics of a Semi-Periphery Semi-Periphery Nation:Nation:• Newly industrialized Newly industrialized

countries with diverse countries with diverse economic opportunities economic opportunities but have extreme gaps but have extreme gaps between rich and poor.between rich and poor.

• These nations are usual These nations are usual in a transition stage to in a transition stage to becoming a core nation.becoming a core nation.

• Examples: Chile, brazil, Examples: Chile, brazil, India, China, and India, China, and IndonesiaIndonesia

ClassificationClassification Characteristics of a Characteristics of a

Periphery Nations: Periphery Nations: • Usually poor regions Usually poor regions

that are very that are very dependent upon core dependent upon core nations.nations.

• Low levels of economic Low levels of economic productivity and lack productivity and lack infrastructure and have infrastructure and have rapidly growing rapidly growing populations.populations.

• These place have These place have benefited little from benefited little from globalization.globalization.

Keep in mind that the Keep in mind that the core-periphery model core-periphery model focus on the economic focus on the economic relationships among relationships among places. places.

The “slow word” of the The “slow word” of the periphery is often periphery is often compared to the “fast compared to the “fast world” of the core world” of the core because of the lack of because of the lack of technology and technology and communication in communication in periphery nations. periphery nations.

Advantages of Production in Advantages of Production in Periphery NationsPeriphery Nations

1)1) Cheap LaborCheap Labor2)2) Loose Labor LawsLoose Labor Laws3)3) Loose Environmental Loose Environmental

RegulationsRegulations4)4) Low TaxesLow Taxes5)5) The distribution of The distribution of

natural resources by natural resources by locating different locating different aspects of production aspects of production in different countries.in different countries.

• Note: Most MNC’s are Note: Most MNC’s are conglomerate conglomerate corporations: composed corporations: composed of many smaller firms of many smaller firms that serve different that serve different functions. (i.e. distance functions. (i.e. distance to natural resources)to natural resources)

World-System TheoryWorld-System Theory

Immanuel Wallerstein said “the world was Immanuel Wallerstein said “the world was and interdependent system of countries and interdependent system of countries inked by political and economic inked by political and economic competition.”competition.”

When political and economic relations When political and economic relations strengthened the areas connected (core strengthened the areas connected (core nations) begin to thrive but the nation not nations) begin to thrive but the nation not connected (periphery nations) did not get connected (periphery nations) did not get these new technological advancements and these new technological advancements and innovations. This was Wallerstein’s theory innovations. This was Wallerstein’s theory as to why there are core, periphery, and as to why there are core, periphery, and semi-periphery nations. semi-periphery nations.

Impact of Impact of Industrialization/DevelopmentIndustrialization/Development

Neocolonialism: the entrenchment of the Neocolonialism: the entrenchment of the old colonial system under a more old colonial system under a more economic than political society.economic than political society.

Tourism usually places a negative affect Tourism usually places a negative affect on periphery nations because eventhough on periphery nations because eventhough it may support an economy it may take it may support an economy it may take away from the local culture. It also takes away from the local culture. It also takes away from the local entrepreneurs.away from the local entrepreneurs.• Tourism may promote awareness about a Tourism may promote awareness about a

particular culture and intercultural contact it particular culture and intercultural contact it takes a harsh turn on the cultural landscape. takes a harsh turn on the cultural landscape.

Models of DevelopmentModels of Development

~Liberal Model~Liberal Model ~~ Assume that all Assume that all

counties are at the counties are at the same stage same stage

All countries are All countries are capable of capable of developmentdevelopment

~Structural Model~~Structural Model~ general term for general term for

models of economic models of economic developmentdevelopment

A result of historically A result of historically derived power relations derived power relations within the global within the global economic systemeconomic system

Only certain countries Only certain countries can become developedcan become developed

The structure is The structure is already in place already in place (maquiladoras) (maquiladoras)

Modernization Model-Rostow Modernization Model-Rostow (1960)(1960)

This model states that all countries follow This model states that all countries follow a similar path through 5 stages of a similar path through 5 stages of development. development. • TraditionalTraditional: subsistent farming, rigid social : subsistent farming, rigid social

structure, little technological change. structure, little technological change. • PreconditionsPreconditions: progressive leadership, : progressive leadership,

diversification, more flexibilitydiversification, more flexibility Introduction to technology such as the steal plowIntroduction to technology such as the steal plow Ability to mass produce foodAbility to mass produce food Infrastructure is builtInfrastructure is built Development of political organizationDevelopment of political organization Charismatic leaderCharismatic leader

Modernization (continued)Modernization (continued)

• Take-off: Take-off: Manufacturing, some type of Manufacturing, some type of industrial revolution, sustained grown industrial revolution, sustained grown occurs. Urbanization increases, occurs. Urbanization increases, industrialization continues, mass industrialization continues, mass production.production.

• Drive to Maturity:Drive to Maturity: technology diffuses, technology diffuses, specialization, international trade, specialization, international trade, modernization, population growth. modernization, population growth.

Modernization (continued)Modernization (continued)

• High mass consumptionHigh mass consumption: High incomes, : High incomes, Widespread productions, mainly service Widespread productions, mainly service sector jobs.sector jobs.

International tradeInternational trade

Dependency TheoryDependency Theory

The structuralist view to Rostow’s The structuralist view to Rostow’s model. Relationship between model. Relationship between countries control and limit economic countries control and limit economic developmentdevelopment• Development does not happen Development does not happen

everywhere due to dependence on a everywhere due to dependence on a core nation for moneycore nation for money

Industrialization (Regions)Industrialization (Regions) Soviet UnionSoviet Union:: 90% of coal mined.90% of coal mined.

• Largest manufacturing complexes. Largest manufacturing complexes. • After WWII, industrialization continued. Dames were created.After WWII, industrialization continued. Dames were created.• Lack of coal with poor quality.Lack of coal with poor quality.

Four Tigers:Four Tigers: South Korea, Taiwan, Hong Kong, and South Korea, Taiwan, Hong Kong, and Singapore.Singapore.• Tied to a shift in labor intensive industries. Tied to a shift in labor intensive industries. • Created mainly automobiles, grand pianos to calculators and Created mainly automobiles, grand pianos to calculators and

computers.computers. Europe:Europe: Began to expand after WWI Began to expand after WWI

• Began in Italy, Spain and ScandinaviaBegan in Italy, Spain and Scandinavia• Successful in the Ruhr Successful in the Ruhr • Industry rebounded through much of the continent while Industry rebounded through much of the continent while

maintaining its position in the globe maintaining its position in the globe

Industrialization (continued)Industrialization (continued)

North America: North America: • U.S. was the U.S. was the

industrial powerindustrial power• Canada was a big Canada was a big

part as wellpart as well• American American

manufacturing Belt manufacturing Belt was formed and was formed and extended extended

Russia/UkraineRussia/Ukraine• St. PetersburgSt. Petersburg• Ukraine was Ukraine was

threatened by the threatened by the German army WWIIGerman army WWII

• Reassembled in Reassembled in Samera Samera

Changing WorldChanging World The Fall of the Soviet Union:The Fall of the Soviet Union:

• Led to the establishment of international boundaries. For Led to the establishment of international boundaries. For example Ukraine became independent and Russia lost example Ukraine became independent and Russia lost one of it key industrial heartlands, which took a toll on one of it key industrial heartlands, which took a toll on the supranationalism that was established.the supranationalism that was established.

• Major Political and Economic Changes in:Major Political and Economic Changes in: Mexico, Brazil, Thailand, and MalaysiaMexico, Brazil, Thailand, and Malaysia

• Until the end of the 1980’s there were three major Until the end of the 1980’s there were three major political-economic blocs:political-economic blocs:

First World: The CapitalistFirst World: The Capitalist Second World: The CommunistSecond World: The Communist Third World: Mainly mixed economiesThird World: Mainly mixed economies

• Due to the collapse of the Soviet Union, and the new Due to the collapse of the Soviet Union, and the new polcies implemented by Tanzania, and Ethiopia the 3polcies implemented by Tanzania, and Ethiopia the 3rdrd World party was no more. World party was no more.

Industrialization (continued) Industrialization (continued)

Eastern AsiaEastern Asia• Japan and ChinaJapan and China• Where large-scale Where large-scale

industrialization 1industrialization 1stst took took placeplace

ChinaChina• Industrial expansion Industrial expansion

took place during took place during communism timecommunism time

• Included manufacturing Included manufacturing districsdistrics

JapanJapan• Limited resourcesLimited resources• Main manufacturing Main manufacturing

made from raw made from raw materials imported materials imported from the whole worldfrom the whole world

• Established coloniesEstablished colonies• Four Japanese districts Four Japanese districts

Secondary RegionsSecondary Regions

Special Economic Special Economic Zones (SEZ)Zones (SEZ)• ““Open Cities” and Open Cities” and

“open coastal areas“open coastal areas to encourage to encourage foreign investment foreign investment

Secondary areasSecondary areas• Thailand, Malaysia, Thailand, Malaysia,

Indonesia, and Indonesia, and Vietnam (possibly Vietnam (possibly the Philippinesthe Philippines

• Most of the pacific Most of the pacific rimrim

Categories of Economic ActivitiesCategories of Economic Activities

Primary Economic Primary Economic Sector:Sector:• These are the countries These are the countries

that harvest and extract that harvest and extract raw materials.raw materials.

• Activities include Activities include fishing, agriculture, fishing, agriculture, ranching, and mining.ranching, and mining.

• Nations who do these Nations who do these kinds of activities are kinds of activities are usually undeveloped usually undeveloped nations trying to grow nations trying to grow their economy.their economy.

• Examples: Vietnam, Examples: Vietnam, LaosLaos

Secondary Economic Secondary Economic Sector:Sector:• These are the countries These are the countries

that are associated with that are associated with the assembly of raw the assembly of raw materials in to goods materials in to goods for consumption.for consumption.

• Activities include: Activities include: Manufacturing, Manufacturing, production of metal, production of metal, and textile production.and textile production.

• This type of activity is This type of activity is characteristic to characteristic to undeveloped and undeveloped and developing nations. developing nations.

• Example: JapanExample: Japan

Categories of Economic Activities Categories of Economic Activities continuedcontinued

Tertiary Economic Tertiary Economic Sector:Sector:• Involved with the Involved with the

exchange of goods exchange of goods produced, from the produced, from the manufacturer to manufacturer to consumer in the consumer in the secondary service secondary service sector.sector.

• Activities include: offices, Activities include: offices, banks, hospitals, and banks, hospitals, and other basic service jobs.other basic service jobs.

• These Nations are These Nations are usually developing and usually developing and sometimes developed sometimes developed nations.nations.

Quaternary Economic Quaternary Economic Sector:Sector:• Research and Research and

development, teaching, development, teaching, tourism, and other tourism, and other activities that have to activities that have to do with generating or do with generating or exchanging knowledge.exchanging knowledge.

• These jobs usually These jobs usually require a higher level of require a higher level of education and are education and are characteristic to characteristic to developed nations.developed nations.

• Examples: U.S., Great Examples: U.S., Great Britain, Germany Britain, Germany

DeindustrializationDeindustrialization

Deindustrialization is when industrial Deindustrialization is when industrial facilities leave an area, taking the economic facilities leave an area, taking the economic base with them. base with them. • This occurred in places like the Midwest, Central This occurred in places like the Midwest, Central

Britain, the Great Lakes, and Flint, Michigan. Britain, the Great Lakes, and Flint, Michigan. Example: Flint’s economic base was in General Motor’s Example: Flint’s economic base was in General Motor’s

automobile industry. It moved to Mexico for: automobile industry. It moved to Mexico for: 1)Cheaper Labor, 2) Flexible environmental 1)Cheaper Labor, 2) Flexible environmental regulations, 3)Inexpensive Land, and 4) Enticing tax regulations, 3)Inexpensive Land, and 4) Enticing tax breaks. Because of this the economy went into a breaks. Because of this the economy went into a slump. This par of the Midwest is now known as the slump. This par of the Midwest is now known as the Rust Belt. Rust Belt.

Deindustrialization ContinuedDeindustrialization Continued When one region’s economic gain translate into another’s When one region’s economic gain translate into another’s

economic loss it called the backwash affect also know economic loss it called the backwash affect also know deglomeration when a firm leaves a region for to start up in a deglomeration when a firm leaves a region for to start up in a distant place. distant place.

One of the main reason firms began to move is because of One of the main reason firms began to move is because of the time-space convergence which is when the absolute the time-space convergence which is when the absolute distance between to places decreases because of the distance between to places decreases because of the increase in technology and communication.increase in technology and communication.

While deindustrialization was hurting some regions While deindustrialization was hurting some regions other were experiencing a different kind of other were experiencing a different kind of economic rev or “high tech boom”.economic rev or “high tech boom”.

With the rise of this new economy, nations became With the rise of this new economy, nations became transnational or MNC’s (Multi National transnational or MNC’s (Multi National Corporations).Corporations).• The rise of these new transnational nations was attributed The rise of these new transnational nations was attributed

to the advantages of production in periphery nations. to the advantages of production in periphery nations.

Deindustrialization ContinuedDeindustrialization Continued

Export-processing zones were also created Export-processing zones were also created through deindustrialization. These zones through deindustrialization. These zones wer designated for manufacturing, and wer designated for manufacturing, and were often accessible for distribution, and were often accessible for distribution, and worked well with the 5 advantages to worked well with the 5 advantages to production in periphery nations. production in periphery nations. • In North America NAFTA was created in 1994 as In North America NAFTA was created in 1994 as

a result of deindustrialization. This agreement a result of deindustrialization. This agreement allowed for free trade between the U.S., Canada, allowed for free trade between the U.S., Canada, and Mexico. This brought economic growth and and Mexico. This brought economic growth and rising standards of living, which also rising standards of living, which also strengthened the rules and procedures strengthened the rules and procedures governing trade and investment.governing trade and investment.

Shifts in ManufacturingShifts in Manufacturing

Heavy industries were limited to N. Europe, Heavy industries were limited to N. Europe, E. Asia, N. America, Britain, France, Russia, E. Asia, N. America, Britain, France, Russia, Germany and Japan. These countries were Germany and Japan. These countries were known as industrial countries.known as industrial countries.• The geography of industrial production has The geography of industrial production has

shifted from core nations to periphery shifted from core nations to periphery nations.nations.

Many firms have relocated their factories to Many firms have relocated their factories to less-developed nations where it is cheaper less-developed nations where it is cheaper to produce goods. For example when to produce goods. For example when Multinational Corporations moved their Multinational Corporations moved their factories to Mexico called maquiladoras. factories to Mexico called maquiladoras.

Pre-industrial World Pre-industrial World

Industrial development did not being Industrial development did not being with the Industrial Revolution. It with the Industrial Revolution. It began during that period and began during that period and diffused from certain areas of diffused from certain areas of innovation to other parts of the innovation to other parts of the world. world.

Industrial RevolutionIndustrial Revolution During the 18th century, European markets were During the 18th century, European markets were

growing and there was not enough labor to keep growing and there was not enough labor to keep pace with local or overseas trade. pace with local or overseas trade.

Better machines were needed Better machines were needed the steam-driven engine was invented called the the steam-driven engine was invented called the

power loom, which revolutionized the weaving power loom, which revolutionized the weaving industryindustry

Affected transportation and communicationAffected transportation and communication . The 1st railroad was opened in 1819. . The 1st railroad was opened in 1819. The Industrial revolution diffused eastward. The Industrial revolution diffused eastward.

Weber’s Least Cost TheoryWeber’s Least Cost Theory Transportaion: The site chosen must entail the Transportaion: The site chosen must entail the

lowest possible cost of moving raw materials to lowest possible cost of moving raw materials to the factory and finished products to the market.the factory and finished products to the market.

Labor: the availability of cheap semiskilled labor.Labor: the availability of cheap semiskilled labor.• Low price goodsLow price goods• and low-wage workers.and low-wage workers.

Agglomeration: happens when a substantial Agglomeration: happens when a substantial number of enterprises cluster in the same are in a number of enterprises cluster in the same are in a large industrial city that can provide assistance to large industrial city that can provide assistance to each other through shared talents, services and each other through shared talents, services and facilities. facilities.

Shifts in Manufacturing ContinuedShifts in Manufacturing Continued

Wealthier nations were shifting to Wealthier nations were shifting to information and service-based economies.information and service-based economies.• Their focus was on research and development, Their focus was on research and development,

marketing, tourism, sales and marketing, tourism, sales and telecommunications. telecommunications.

• These jobs generally provided better pay, safer These jobs generally provided better pay, safer working conditions, less pollution, and higher working conditions, less pollution, and higher standard of living. Yet, they required more standard of living. Yet, they required more education.education.

• Newly industrialized countries include: Mexico. Newly industrialized countries include: Mexico. China, and Malaysia.China, and Malaysia.

Impact of other Variables on Impact of other Variables on EconomicsEconomics

InfrastructureInfrastructure EnergyEnergy GovernmentGovernment