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IndustryAPHG Spring 2014

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Key Issues Where is industry distributed? Where is industry distributed? Why are situation factors important? Why are situation factors important? Why are site factors important? Why are site factors important? Why are location factors changing? Why are location factors changing? http://embed.ted.com/talks/hans_rosling_asia_s_rise_how_and_when.html

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Where is Industry Distributed? Origin of industry From cottage industries to the Industrial Revolution (series of events) Impact of the Industrial Revolution especially great on iron, coal, transportation, textiles, chemicals, and food processing Most significant impact of the IR was to promote concentration rather than dispersion of industry across the landscape

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Diffusion of the Industrial Revolution When, Where, Why: Island of Great Britain in mid- to late 1700s Why? Flow of capital Second agricultural revolution Mercantilism and cottage industries Resources: coal, iron ore, and water power Diffusion of railways

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The Industrial Revolution originated in areas of northern England. Factories often clustered near coalfields The Industrial Revolution originated in areas of northern England. Factories often clustered near coalfields. Industrial Revolution Hearths

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Flow of Capital Into Europe, 1775 Needed flow of capital in order to fuel the Industrial Revolution

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Textiles Production: Liverpool and Manchester Iron Production: Birmingham Coal Mining: Newcastle

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Diffusion to Mainland Europe In early 1800s, innovations diffused into mainland Europe. In early 1800s, innovations diffused into mainland Europe. Location criteria: Location criteria: proximity to coal fields; proximity to coal fields; Connection via water to a port Connection via water to a port Flow of capital Flow of capital Later Diffusion In late 1800s, innovations diffused to some regions without coal. In late 1800s, innovations diffused to some regions without coal. Location criteria: Location criteria: Access to railroad Access to railroad Flow of capital Flow of capital

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Diffusion of Industrial Revolution

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The Paris Basin is the Industrial base of France. Rouen (pictured here) is at the head of navigation point on the Seine River.

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Where is Industry Distributed? Industrial regions Europe Emerged in late nineteenth and early twentieth centuries Western Europe, Central Europe, Russia (Europe/Asia) North America Industry arrived later but spread faster than in Europe East Asia

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Industrial Regions The worlds major manufacturing regions are found in North America, Europe, and East Asia. Other manufacturing centers are also found elsewhere.

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Industrial Areas in Europe

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Industrial Areas in North America

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Manufacturing Centers in East Asia Many industries in China are clustered in three centers near the east coast. In Japan, production is clustered along the southeast coast.

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Major Manufacturing Regions of East Asia

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How do Location Theories explain Industrial Location?

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Location Theory Location Theory predicting where business will or should be located. Location Theory predicting where business will or should be located. Considerations: Considerations: Variable costs Variable costs Friction of distance Friction of distance

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Location Models Webers Model Manufacturing plants will locate where costs are the least (least cost theory) Theory: Least Cost Theory Costs: Transportation, Labor, Agglomeration Webers Model Manufacturing plants will locate where costs are the least (least cost theory) Theory: Least Cost Theory Costs: Transportation, Labor, Agglomeration Hotellings Model Location of an industry cannot be understood without reference to other industries of the same kind. Theory: Locational interdependence Hotellings Model Location of an industry cannot be understood without reference to other industries of the same kind. Theory: Locational interdependence Loschs Model Manufacturing plants choose locations where they can maximize profit. Theory: Zone of Profitability Loschs Model Manufacturing plants choose locations where they can maximize profit. Theory: Zone of Profitability http://ed.ted.com/lessons/why-do-competitors-open-their-stores-next-to-one-another- jac-de-haan#watch

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Loschs Model - Zone of Profitability Zones of distance decay sales will be unprofitable.

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Why Are Situation Factors Important? Situation factors Situation factors Proximity to inputs Location near markets Transport choices Types of Industries Bulk-reducing industries Examples: Copper Steel Others? Integrated steel mills in the U.S. are clustered near the southern Great Lakes, which helped minimize transport costs of heavy raw materials.

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Proximity to markets Bulk-gaining industries Examples: Fabricated metals Beverage production Single-market manufacturers Perishable products U.S.-owned parts plants are clustered near the main final assembly plants. Foreign-owned plants tend to be located further south, where labor unions are weaker.

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Copper Industry in North America Copper mining, concentration, smelting, and refining are examples of bulk-reducing industries. Many are located near the copper mines in Arizona

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Location of Beer Breweries Beer brewing is a bulk-gaining industry that needs to be located near consumers. Breweries of the two largest brewers are located near major consumers. Breweries of the two largest brewers are located near major population centers. population centers.

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Why Are Situation Factors Important? Ship, rail, truck, or air? The farther something is transported, the lower the cost per km/mile Cost decreases at different rates for each of the four modes Truck = most often for short-distance travel Train = used to ship longer distances (1 day +) Ship = slow, but very low cost per km/mile Air = most expensive, but very fast

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Why Are Site Factors Important? Labor The most important site factor Labor-intensive industries Examples: textiles Textile and apparel spinning Textile and apparel weaving Textile and apparel assembly

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Cotton Yarn Production Production of cotton yarn from fiber is clustered in major cotton growing countries, including the U.S., China, India, Pakistan, and Russia.

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Woven Cotton Fabric Production Production of woven cotton fabric is labor intensive and is likely to be located in LDCs. China and India account for over 75% of world production.

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Production of Womens Blouses Sewing cotton fabric into womens blouses is more likely to be located near customers in MDCs, but much production now located near customers in MDCs, but much production now occurs in LDCs. occurs in LDCs.

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Why Are Site Factors Important? Land Rural sites Environmental factors Capital $$$

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Site Selection for Saturn GM considered a variety of economic and of economic and geographic factors geographic factors when it searched for a site for producing the site for producing the new Saturn in 1985. new Saturn in 1985. The plant was The plant was eventually located in Spring Hill, TN. Spring Hill, TN.

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Why Are Location Factors Changing? Attraction of new industrial regions Changing industrial distribution within MDCs Interregional shift within the United States Right-to-work laws Textile production Interregional shifts in Europe Convergence shifts Competitive and employment regions

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Changing U.S. Manufacturing

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Manufacturers of Mens and Womens Socks and Hosiery Hosiery manufacturers usually locate near a low-cost labor force, low-cost labor force, such as found in the such as found in the southeastern U.S.

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European Union Structural Funds Manufacturing has diffused from traditional industrial centers in NW Europe toward Southern and Eastern Europe. European government policies have encouraged this industrial relocation. The EU provides assistance to what it calls convergence regions and competitive and employment regions. Central Europe offers manufacturers an attractive combination of two important site and situation factors labor and market proximity. EU Structural Funds. The EU provides subsidies in regions with economic difficulties because of declining industries, as well as to regions that have lower-than-average incomes.

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Why Are Location Factors Changing? Attraction of new industrial regions International shifts in industry East Asia one the of the worlds three major industrial regions. Rapid industrial growth; In addition to China and Japan, also includes S. Korea (worlds leading producer of lrg container ships (international trade) Leading producer of steel and fabricated metal products. South Asia Led by India, one of the fastest-growing economies among lrg countries. Textiles dominant industrial sector; motor vehicle production is growing; important ctr for business services. Latin America nearest low-wage region to the US. Maquiladora plants located in northern Mexico - shipping is lower to US from Mexico than any other LDC. Brazil leading industrial country in Latin America; industries clustered around two large cities in the SE part of Brazil.

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Newly Industrialized China major industrial growth after 1950 Industrialization in the 1960s was state-planned: (Why?) Industrialization in the 1960s was state-planned: (Why?) Focused on: Northeast District Shanghai and Chang District Shanghai and Chang District Today, industrialization is spurred by companies that move productions (not the whole company) to take advantage of Chinese labor and special economic zones (SEZs) Today, industrialization is spurred by companies that move productions (not the whole company) to take advantage of Chinese labor and special economic zones (SEZs) BRICs Brazil, Russia, India, China, South Africa

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As Chinas economy continues to grow, old neighborhoods (right) are destroyed to make room for new buildings (below). Beijing, China

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Changing distributions Modern Production Outsourcing - moving individual steps in the production process (of a good or a service) to a supplier, who focuses their production and offers a cost savings. http://www.metatube.com/en/videos/10420/The- Simpsons-India-Outsourcing/ http://www.metatube.com/en/videos/10420/The- Simpsons-India-Outsourcing/ Offshore Outsourced work that is located outside of the country.

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World Steel Production Since the 1980s, all the worlds increase in steel production has been in LDCs. China has had the greatest increase.

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Global Production Steel production has generally declined in MDCs and increased in LDCs, especially in China, India, Brazil, and South Korea

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Apparel Production and Jobs in the U S Apparel production and jobs in the US. The number of jobs in the apparel industry has declined sharply in the US since the 1990s. Not by coincidence, the % of everyday clothing accounted for by domestic production has decreased sharply, replaced with imports.

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Why Are Location Factors Changing? Renewed attraction of traditional industrial regions Proximity to skilled labor Fordist, or mass production Post-Fordist, or lean production Just-in-time delivery

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Post-Fordist Fordist dominant mode of mass production during the twentieth century, production of consumer goods at a single site. Fordist dominant mode of mass production during the twentieth century, production of consumer goods at a single site. Post-Fordist current mode of production with a more flexible set of production practices in which goods are not mass produced. Production is accelerated and dispersed around the globe by multinational companies that shift production, outsourcing it around the world. Post-Fordist current mode of production with a more flexible set of production practices in which goods are not mass produced. Production is accelerated and dispersed around the globe by multinational companies that shift production, outsourcing it around the world.

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Time-Space Compression Through improvements in transportation and communications technologies, many places in the world are more connected than ever before.

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Time-Space Compression Just-in-time delivery Just-in-time delivery rather than keeping a large inventory of components or product, companies keep just what they need for short-term production and new parts are shipped quickly when needed. Two issues can result from reliance on just-in- time delivery: labor unrest and Acts of God Global division of labor Global division of labor corporations can draw from labor around the globe for different components of production corporations can draw from labor around the globe for different components of production This labor can be skilled or unskilled.

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Electronic Computing Manufacturing Computer and parts manufacturing requires highly skilled workers and capital. It is clustered in the Northeast and the West Coast

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Womens and Girls Cut and Sew Apparel Manufacturing Womens and Girls cut and sew apparel and sew apparel Manufacturing requires more skilled workers, and much manufacturing and much manufacturing is still clustered in or is still clustered in or near New York City.

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Deindustrialization a process by which companies move industrial jobs to other regions with cheaper labor, leaving the newly deindustrialized region to switch to a service economy and work through a period of high unemployment Abandoned street in Liverpool, England, where the population has decreased by one- third since deindustrialization.

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Key Question What is the Service Economy, and Where are Services Concentrated?

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Service Economy Service Industry Service Industry Economic activity associated with the provision of services such as transportation, banking, retailing, education, and routine office-based jobs. Economic activity associated with the provision of services such as transportation, banking, retailing, education, and routine office-based jobs.

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Geographical Dimensions of the Service Economy New influences on Location: New influences on Location: - information technologies - less tied to energy sources - market accessibility is more relevant for some and less relevant for others because of some and less relevant for others because of telecommunications. telecommunications. - presence of Multinational Corporations

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Wal-Mart Requires producers of goods to locate office in the Bentonville, Arkansas (Wal-Marts headquarters) area in order to negotiate deals with Wal-Mart. Proctor & Gamble put their office in nearby Fayetteville, Arkansas. How does the presence of these companies in the region change the regions economy and its cultural landscape ?

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Nike Headquartered in Beaverton, Oregon,. Nike has never produced a shoe in Oregon. Beginning in the 1960s, Nike contracted with an Asian firm to produce its shoes. Skopje, Macedonia The swoosh is ubiquitous, but where is the shoe produced? Nike has a global network of international manufacturing and sales

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High Technology Corridors An area designated by local or state government to benefit from lower taxes and high-technology infrastructure with the goal of providing high- technology jobs to the local population. An area designated by local or state government to benefit from lower taxes and high-technology infrastructure with the goal of providing high- technology jobs to the local population. eg. Silicon Valley, California Technopole an area planned for high technology where agglomeration built on a synergy among technological companies occurs. Technopole an area planned for high technology where agglomeration built on a synergy among technological companies occurs. eg. Route 128 corridor in Boston

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Plano-Richardson, Texas Telecom Corridor is just north of Dallas

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What majors are most popular at the college or university you will be attending? What majors are most popular at the college or university you will be attending? Consider what service/high- technology corridors may already exist near that college or university. Consider what service/high- technology corridors may already exist near that college or university. Propose (where, why, how) a new service/high-technology corridor for your region based on what that college/university has to offer the industry. Propose (where, why, how) a new service/high-technology corridor for your region based on what that college/university has to offer the industry.

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Up Next: Exam Chapters 9 - 11 Read Chapter 8 Then - Then - Political Geography