Industry

Chapter 11

Industrial Revolution

• Cottage industry– Iron– Coal– Transportation– Textile– Chemicals– Food processing

Europe

Western Europe

• United Kingdom– Industrial Revolution– Lost international

leadership in the 20th century

– Attracted high-tech industries, serving the European

– Industries located in E/SE England

• Rhine-Ruhr Valley– Belgians led the way in coal

mining– French opened the first coal-

blast furnaces for iron making– Germans opened first

industrial cotton mill– Political problems stopped

development of modern transportation

– Most industrial areas lie in NW Germany

– Iron & steel manufacturing due to closeness of coal fields

• Mid-Rhine– Europe’s most centrally located industrial area– Frankfurt – financial & commercial center & hub

of Germany’s transport network– Stuttgart – high-valued goods that require skilled

labor– Mannheim – inland port, large chemical industry,

synthetic fibers, dyes & pharmaceuticals

• Po Basin– Numerous workers

willing to accept low wages

– Inexpensive hydroelectricity

– Attracted textiles & other industries

• Northeastern Spain– Fastest growing late 20th

century– Catalonia centered on

the city of Barcelona center of Spain’s textile industry

– Country’s largest motor-vehicle plant

Eastern Europe

• Moscow– Russia’s oldest industrial

region– Centered around

country’s capital & largest city

– Despite few resources, skilled labor to produce linen, cotton, wool & silk

• St. Petersburg– Second-largest city– Specializing in ship

building– Other industries that

serve the navy & ports in the Baltic

– Processed foods, textiles & chemicals

• Urals– Contain world’s most

varied collection of minerals – 1,000 types of minerals

– Attracted steel, chemicals, machinery & metal fabricating plants

• Volga– Contains largest

petroleum & natural gas reserves

• Kuznetsk– Most important

manufacturing district east of the Urals

– Largest reserve of coal & large supply of iron ore

• Dontetsk– Eastern Ukraine– World’s largest coal

reserves

• Silesia– Europe’s most rapidly

growing industrial area– Skilled & low-paid

workforce & proximity to wealthy markets in western Europe

North America

North America

• New England– Cotton textiles early 19th

century– Imported from southern

states & finished product shipped to Europe

• Middle Atlantic– Largest US market– Attracts industries that

need large proximity to large number of consumers

– Foreign trade through region’s large ports

• Mohawk Valley– Linear industrial belt in

upper New York State– Advantage inexpensive

electricity generated by Niagara Falls

• Pittsburg-Lake Erie– Was leading steel-

producing area in 19th century

– Proximity to Appalachian coal & iron ore

• Western Great Lakes– Chicago – hub of the

nation’s transportation network

– Now, center of steel production

• Southern California– Largest area of clothing

& textile production– Second-largest furniture

producer– Major food-processing

center

• Southeastern Ontario– Canada’s most important

industrial area– Central to Canadian &

US markets & near Great Lakes/Niagara Falls

Asia

Asia

• Japan– Became and industrial

power in 1950s & 1960s. – Initially by producing

goods that could be sold in large quantity at cut-rate prices to consumers in other countries

– Centered between Tokyo & Nagasaki

• China– Seconds-largest supplier

of low-cost labor & is world’s largest market for many products

– Three areas: Hong Kong, Yangtze River & Gulf of Bo Hai

• South Korea– Began an export-

oriented manufacturers– Ocean going ships– Centered along the rim

between the capital & second-largest city Seoul and Busan the largest port

Section 2

Why do Industries have different distributions?

Situation Factors

• Proximity to inputs– Optimal plant location is

as close as possible to inputs is the cost of transporting raw materials to the factory is greater than the cost of transporting the product to consumers

• Proximity to markets– Optimal plant location is

as close as possible to the customer is the cost of transporting raw materials to the factory is less than the cost of transporting the product to consumers

• Nonmetallic minerals– 90% of metals humans

use are nonmetallic – Building stones,

diamonds, minerals used to manufacture fertilizers: nitrogen, phosphorus, potassium, calcium & sulfur

• Metallic minerals– Valuable for fashioning

machinery, vehicles & other essential elements of contemporary society

– Malleable– Ductile– Conductors– Metals are capable of

combining to form alloys that have distinct properties for industry

• Ferrous– Contains iron (Latin for

the word iron)– Extracted from iron ore,

the world’s most widely used ore

– Fashioning iron 4,000 years ago

• Chromium• Manganese• Molybdenum• Nickel• Tin• Titanium• Tungsten

• Nonferrous metals– Used to manufacture

products that don’t contain iron & steel• Aluminum• Copper• Lead• Lithium• Magnesium• Zinc• Precious metals• Rare earth metals

Situation Factors: Proximity to Markets

• Bulk gaining – makes something that gains volume or weight during production– Fabricated metals– Beverage production

Single Market Manufacturers

• Specialized manufacturers with only one or two customers

• Optimal location for factories is close proximity to customers

Perishable Products• To deliver as rapidly as

possible must be located as close to markets as possible– Bread– Cheese– Butter– Daily newspaper

• Electronic delivery has led to the decline in print publishing jobs – 1 million to 800,000 and Internet publishing jobs has increased from 70,000 to 80,000

Ships, Rail, Truck, Air?

• The further something is transported the lower the cost per kilometer (mile)

• Longer distance transportation is cheaper per kilometer because firms must pay workers to load goods on & off vehicles whether the material travels 10 or 10,000 kilometers

• Cost per kilometer decreases at different rates for the different modes

Ship, Rail, Truck or Air?

• Trucks– Most often used for

short distance– Can be loaded and

unloaded quickly– Advantageous is the

truck driver can reach destination within one day

• Trains– Often used to reach

destinations that take more than a day

– East & West coast in US– Take longer than trucks

to load and unload– Once on the way they do

not need to take rests like trucks

• Ships– Used for long distance– Cost per kilometer is

very low– Slower than land based

transportation

• Air– Most expensive for all

distances– Used for speedy delivery

of small-bulk, high-valued packages

Break of Bulk

• Regardless of transportation mode, cost rises each time that inputs or products are transferred from one mode to another

• Companies may calculate that the cost of one mode is lower for some inputs & products where another mode may be cheaper for other goods

• Many companies that use multiple transports must calculate break of bulk – location where transfer among transportation modes is possible

• These are seaports, airports

Copper: Proximity to Inputs or Markets

1. Mining – bulk reducing, most of ore extracted is gangue. In North America, copper ore mined is low grade 0.7% copper

2. Concentration – crush & grind into fine particles, mix with water, chemicals filter & dry. 25% copper. Concentration mills are located near mines

3. Smelting– Concentration becomes

input for smelters which remove impurities

– Another bulk-reducing industries and smelters are built main inputs to minimize transportation costs

4. Refining– Purified copper from

smelters is refined to produce copper cathodes 99.99% pure copper

– Refineries are located near smelters

Steel: Changing Inputs• Steel is made by removing impurities in iron such as silicon, phosphorus, sulfur & oxygen

• Bulk-reducing industry traditionally located it facilities because of situation factors. Two changes– Change in relative

importance of main inputs– Increasing importance of

proximity to markets rather than proximity to inputs

Changing Distribution of the US Steel Industry

1. Mid 19th Century – Southwestern Pennsylvania

2. Late 19th Century – Lake Erie3. Early 20th Century – Southern Lake Michigan4. Mid 20th Century – East & West Coasts5. Late 20th Century – Proximity to markets

Motor Vehicle: Changing Markets• Global distribution

– Assembled at plants using thousands of parts supplied by independent companies

– Three regions include 10 carmakers that control 85% of world sales• Two in North America – GM &

Ford• Four in Europe –

Germany(VW), Italy (Fiat- Chrysler), France (Renault-Nissan& Peugeot)

• Four in East Asia – Japan (Toyota, Honda & Suzuki), South Korea (Hyundai)

• Regional distribution of vehicle production– North America –

assembly & parts plants located in interior US between Michigan & Alabama

– Corridor known as “auto alley” formed by north-south interstate highways 65 & 75

• Europe– East-West corridor

between UK & Russia– Germany is the leading

producer in Europe– Since the end of

communism east Europe has seen a large increase in production

• East Asia– Clustered in the east

near major population centers

– Most car buyers in China are in large cities

Site Factors

• Labor

• Capital • Land

Textiles and Apparel: Changing Inputs

Weber: Least- Cost Theory

• Alfred Weber• Optimum location

where cost of transporting raw materials to factory & finished goods to market at their lowest

1. Area is completely uniform physically, politically, culturally & technologically

2. Manufacturing involves a single product to be shipped to a single market whose location is known

3. Inputs involve raw materials from more than one source

4. Location is infinitely available but immobile in location

5. Transportation routes are not fixed but connect origin & destination by shortest path. Transport costs directly reflect the weight of the item shipped & the distance they are moved

Hotelling Model

• Economist Harold Hotelling (1895-1973)

• Wanted to understand the issue of locational interdependence