A2GEOGRAPHYREVISIONPRODUCTIONLOCATIONANDCHANGE

11.3 MANUFACTURINGANDRELATEDSERVICEINDUSTRY

KEYTERMSANDDEFINITIONSProcessing industries are industries that use raw materials directly.Weight loss refers to industries for which the finished product is lighter than the weight of the raw materials required to manufacture it.Tidewater locations are port locations where freight can be transferred from road, rail and pipeline to water transport.Break of bulk is a location, such as a seaport, where freight has to be transferred from one mode of transport (usually an oceangoing bulk carrier) to another (usually rail or road).

Industrial revolution is the transformation in the late eighteenth and the nineteenth centuries of first Britain and then other European countries and the USA from agricultural into industrial nations.Hard infrastructure is the basic utilities (road, rail, air links; water, sewage and telephone systems, etc.) that provide a network that benefits business and the community.Soft infrastructure is other services such as health, education, banking and retailing that are important to business and the community.Industrial inertia is the continued presence of an industry in an area even though the factors that caused it to locate there originally no longer apply.

KEYTERMSANDDEFINITIONS

Footloose industry is industry that is not tied to certain areas because of its energy requirement, raw materials or other factors.Fixed (terminal) costs are costs accrued by the equipment used to handle and store goods, and the costs of providing the transport system.Line haul costs are the costs of actually moving the goods and are largely composed of fuel costs and wages.Capital represents the finance invested to start up a business and to keep it in production.

KEYTERMSANDDEFINITIONS

Sectoral spatial division of labour is the concentration of specific industrial skills in particular regions or countries.Geographical mobility of labour is the relative ability of labour to move from one geographical region to another.Occupational mobility is the relative ability of people to move from one occupation to another.Internal economies of scale occur when an increase in production results in a lowering of unit costs.Diseconomies of scale are when an increase in production results in rising unit costs.

KEYTERMSANDDEFINITIONS

External economies of scale (agglomeration economies) are the benefits that accrue to a firm by locating in an established industrial area. External economies of scale can be subdivided into urbanisation economies and localisation economies.Industrial agglomeration is the clustering together and association of economic activities in close proximity to one another.Industrial estate is an area zoned and planned for the purpose of industrial development.

KEYTERMSANDDEFINITIONS

Export processing zones are industrial zones with special incentives set up to attract foreign investors, in which imported materials undergo some degree of processing before being reexported.Jobs in the formal sector will be known to the government department responsible for taxation and to other government offices.Informal sector is that part of the economy operating outside official government recognition.Functional linkages are the links between industries, like tyre manufacturers and car makers

KEYTERMSANDDEFINITIONS

TOPICSUMMARYThe factors affecting industrial location will differ from industry to industry and their relative importance is subject to change over time.Industries that use raw materials directly, such as oil refining and metal smelting, are known as processing industries.The processes involved in turning a raw material into a manufactured product usually result in weight loss.Tidewater locations are particularly popular with industries using significant quantities of imported raw materials.Where a firm sells its products may well have a considerable influence on where the factory is located.

TOPICSUMMARYAlthough once a major locational factor, the share of industry’s total costs accounted for by transportation has fallen steadily over time.The space requirements of different industries, and also of firms within the same industry, vary enormously. Technological advance has made modern industry much more space-efficient than in the past.Capital represents the finance invested to start up a business and to keep it in production. That part of capital invested in plant and machinery is known as fixed capital as it is not mobile compared with working capital (money).The interlinked attributes of labour that influence locational decision-making are cost, quality, availability and reputation.

TOPICSUMMARYInternal economies of scale occur when an increase in production results in a lowering of unit costs.External economies of scale (agglomeration economies) are the benefits that accrue to a firm by locating in an established industrial area.Governments influence industrial location for economic, social and political reasons. Regional economic policy largely developed after the Second World War, although examples of legislation with a regional element can be found before this time.Advances in technology can stimulate new industrial clusters as has happened with biotechnology in a number of countries.

TOPICSUMMARYCar manufacturing is one of the world’s largest industries. Within the EU, investment in car manufacturing has shifted from western to eastern Europe in recent years as countries like Slovakia have joined the EU.Industrial agglomeration is the clustering together and association of economic activities in close proximity to one another. Agglomeration can result in companies enjoying the benefits of external economies of scale.

TOPICSUMMARYAn industrial estate is an area zoned and planned for the purpose of industrial development. Industrial estates are also known as industrial parks and trading estates.There are a number of different types of export processing zones (EPZs), which include free trade zones, special economic zones, bonded warehouses, and free ports.The concept of the informal sector was introduced into international usage in 1972 by the International Labour Organization (ILO).

ADDITIONALWORKS1. For the largest manufacturing industry nearest to where you live, research the factors that influenced its location.2. Make a list of the most important raw materials produced by the country in which you live. What proportion of raw material production is used domestically and how much is exported?3. How has the government influenced industrial location in the country in which you live?4. Are there any examples of the informal sector operating in your local area?

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