Download Industrialization

Industrialization
“Where is industry expanding?”
Changing Distributions Within MDCs
• Intraregional Shifts in Manufacturing:
– Historically – factors located inside cities
• Situation – proximity to market
• Site – lots of labor and sources for capital
• Increasing Site Problem – obtaining enough land for
manufacturing
Modern Factories
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Likely to be suburban or rural
Require large tracts of land
Land is cheaper outside of a city
Location near highways is more important
than railways
• Factories cluster in industrial parks near
suburban highway junctions
Where is this GM plant located?
Interregional Shifts in Manufacturing
• Manufacturing has shifted towards the South and West in the
United States
• In Western Europe, governments have encouraged relocation
toward economically distressed areas
– Result = the distribution of manufacturing is less clustered
Southern and Western U.S.
• The NE U.S. has lost 1 million manufacturing jobs in the last
few decades
• Manufacturing jobs have grown by 1/6 in the South and West
since the early 70’s
Right-to-work laws
• A right-to-work law requires a factory to maintain a so-called
“open shop” and prohibits a “closed shop”
• A “closed shop” = a company and union agree that everyone must
join the union in order to work
• Southern states have made it difficult for unions to organize
workers, collect dues, and bargain with employers
A “closed shop” – Workers in the Garment Industry Strike
Manufacturing in the South
• Steel, textiles, tobacco
products, and furniture
industries are scattered
across the South
• The Gulf Coast has become
an important industrial
leader because of oil and
natural gas
Katrina threatened oil supply by cutting power to the
refineries in Mississippi
Colonial Pipeline brings oil and natural gas to the South
Manufacturing in the West
• Completion of the L.A. harbor (1910) and Panama Canal (1914)
allowed the West Coast to open up to processing
• L.A. is the country’s leading producer of textiles and second largest
of furniture and food processing
• A large pool of unorganized workers has been assembled in L.A.
through immigration, especially from Mexico and Asia
Interregional Shifts in Western Europe
• Manufacturing has diffused from traditional centers in NW
Europe to southern and eastern Europe
• European governments have explicitly encouraged this
industrial relocation
• Western Europeans used incentives to lure industry into poorer
regions
• The EU assists in lagging regions
New Industrial Regions
• Example – Steel: In 1980, 80% of the world’s steel was produced in PEDs
• In 2005, just 45% is produced in PEDs
• China = the world’s largest steel producer
Secondary Industrial Regions
• South of the world’s primary industrial region
• Industrial regions usually consist of several zones, each
dominated by a particular kind of industry
– Iron and steel zone
– Coal mining in another
– Textiles in a third
• Thailand, Indonesia, Malaysia, and Vietnam share the
economic growth in Pacific Realm
• Most of the world’s industrial activity has traditionally
been found in developed countries of the mid-latitudes
“Central” Europe
• Poland, Czech Republic, and Hungary have had the most
industrial growth
• Central Europe offers two assets:
– Labor
– Market proximity
China
• The largest manufacturer of textiles, steel, and household
products
• Two principal assets:
– Largest supply of low-cost labor
– The world’s largest market
Chinese Population = 1,321,851,888 (2007)
Other Asian Countries
• Thailand – set a 120% tariff
on imported vehicles in
1974; lowered to 20% in the
90s
• India – liberalization
program in 1991 eliminated
many restrictions on foreign
investment
Latin America
• Mexico and Brazil are the two
leading industrial centers in Latin
America
• Manufacturing is clustered in the
largest city: Mexico City and Sao
Paulo – proximity to the major
market
• North American Free Trade
Agreement (NAFTA) – eliminated
restrictions on trade
• Average wage = $400 per month
Maquiladora
• Secondary manufacturing zone
• Developed in northern Mexico near
border with U.S.
• Where manufactured products could be
sent to U.S. free of import tariffs
• U.S. companies established plants
designated to transform imported, day
free components or raw material in
finished products
• Owned by U.S.
• Young women= cheaper wages
Maquiladora Continue
• Factory that imports material and equipment on a duty-free and tariff-free basis for
manufacturing and re-exports the assembled product
• Variety of industries
– Electronics, transportation, textiles, machinery
• NAFTA
– tax-free
– Industry expanded more rapidly
• Dense number of maquiladoras
– Pollution
– Hazardous waste
• Lack proper waste management facilities and the ability to clean up disposal sites
– Hazardous waste illegally disposed
Why are Location Factors
Changing?
Proximity to Low Cost Labor
• Labor is the site factor that is changing rapidly in the 21st
Century
• Textile and apparel industries are especially opening
production in lower wage locations while shutting
production in higher wage locations
Textile and Apparel Industry in the U.S.
• Early 20th Century – heavily concentrated in the NE
• Mid 20th Century – production moved to the SE
• SE wages were low compared to the NE, but still high on a
global scale
• The number of apparel workers declined from 1.5 million in
1994 to 700,000 in 2003
Outsourcing
• Transnational corporations have been very aggressive in using
low cost labor in LDCs
• Despite transportation cost
• Jobs that require highly-skilled workers remain in MDCs
The New International Division of Labor
• Transnational corporations outsource jobs to low wage countries
• Productions is turned over to independent suppliers
• This is the opposite of vertical integration – in which a company would
control all phases of production
• Example: Carmakers used to make their own parts, but now they outsource
that responsibility to other companies
Renewed Attraction to Traditional Industrial
Regions
• Many industries now want
skilled labor
• Traditionally, factories required
workers to perform the same
task repeatedly
• This is called a Fordist
approach
Ford Assembly Line
New Work Rules
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Lean or Flexible Production (post-Fordist)
Three types of work rules for post-Fordist:
1. Teams
2. Problem Solving
3. Leveling
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Examples: Computer manufacturing (CA), “high-end”
clothing is made in the NE U.S.
Just-in-Time Delivery
• Shipment of parts and materials to arrive at a factory
moments before they are needed
• Important for inputs for manufacturing
• Saves money by reducing wasteful inventory
• Suppliers must locate near customers
Computer Manufacturing
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Dell and Gateway have reduced inventory by only
producing upon demand (telephone or internet)
Two disruptions that could occur:
1. Labor unrest
2. Acts of God