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Unit 5 Secondary and Tertiary Activities 5.1 Identify natural and human input in a manufacturing operation. Case Study Page 227-228, Question number 19 a and b 19a. Physical factors accounting for a thriving auto manufacturing industry in Hiroshima 1. The city is located on a river delta at the head of a bay on the sheltered side of the “Island sea” 2. The water is deep enough for very large ship. b. Human factors that support this industry. 1. Hiroshima experience with industry was on its side. Early 20th century it had developed a shipyard and carried on ship building activities. 2. Labor force had wide experience in the manufacturing sector, particularly in car assembly 3. A large population in and around the city created a local demand for cars. 4. A vibrant research and development sector in Hiroshima supported car design work and developed assembly line robotics. 5. Support service such as marketing and accounting were readily available. 5.2 Analyze the processes in a manufacturing operation. Read case study on page 219 -220 Gum manufacturing Use a flow chart to outline the process involved in making gum. 5.3 Describe the three processes that may be used to change a raw material into a useable form. 1. Analytic process- Raw materials or resources are broken down into several useable or saleable products. Example Cow = milk, fertilizer, meat, leather, and glue. 2. Synthetic process- several raw materials or resources are combined to make one useable product. Example: Onions, potatoes, salt, cod, and pepper are combined to make fish cakes. 3. Conditioning process- raw material or resources are only slightly modified or changed into a useable or saleable product. Example: 1. Cod process cod fillets (2) Oil process furnace oil (3) Timber process lumber 5.4 Define the terms labor-intensive and capital intensive. Labor-intensive- manufacturing which depends on the technical skill of workers, more than automated equipment. Labor is a key component of the operation (number wise or hour wise). Specialized skills performed by crafts people. Example: Jewelry Capital Intensive- manufacturing largely depends on automated equipment and financial investment. Labor is not as crucial to the manufacturing operations, as in the roots, and other technology used. Example: Automated assembly line. 5.5 Analyze a manufacturing operation to determine if it is labor intensive or capital intensive. 5.6 Define the terms light industry and heavy industry. Light industry- any manufacturing focused on producing products for the general consumer. These products usually require less input (ie, resources) and the majority are light in weight compared to products produced in heavy industry. Example, automobiles, toilet paper, toys (productivity per worker is high) Heavy industry- Manufacturing requiring large, bulky inputs to produce heavy weighed products, typically bought by other companies to transport or produce another product or service. Example: Steel products – trains, airplanes, ships (productivity per worker is low) This industry is not typically geared toward the general consumer. 5.7 Analyze a manufacturing operation to determine if it is an example of light industry or heavy industry. Case study- 221-222 Question # 10 Question: Classify steel production as a heavy or a light industry. Explain your answer. Answer: Steel production is an example of heavy industry. This type of operation requires large amounts of labor, investment, and heavy-weight materials, namely iron ore or pelletized iron concentrate, limestone, and coal or heavy oil. 5.8 Examine the influence that site conditions and situation may have on the location of an industry. Site: refers to the specific characteristics of an area which might make it attractive to industry. Situational Factors: refers to how the area (site) is connected to surrounding areas (i.e. Market) Natural factors: 1. Land- accessible, flat, spacious and able to support a large building 2. Resources- are accessible 3. Energy- accessible and cost efficient Human Factors: 1. Skilled workers: some industries which locate in less developed countries do so to take advantage of cheap labor. 2. Cheap labor-Most companies which locate in less developed countries do so to take advantage of cheap labor. 5.9 Compare the terms resource oriented industry and market oriented industry. Resource oriented industry – Manufacturing industry that tends to locate near the source of its raw material(s). In these industries, the ratio of the weight of the raw material used in the manufacturing of the product to the weight of the finished product tends to be high. Example: Plywood manufacturing- economical to ship than the logs. Market Oriented Industry- An industry that tends to locate close to its market. Industries locate near the market if the cost of transportation of the finished product to the customers is a major part of the selling price. One example is the brewing industry where large bulky quantities of water are used to make the finished product. If there is a weight gain after manufacturing for example Wet batch cement plant. 5.10 Analyze the influence of weight gain and weight loss production on the location of an industry. Case study page 221-222 do Question # 14, 15, 16, and 17 and # 11 Page 223 5.11 Describe the advantages of the agglomeration tendency. Agglomeration tendency- a pattern of economic activities concentrated in the same location. This may apply to the concentration of particular commercial shops and service. Also, refers to the material benefits industries or companies receives when they locate next to each other. Example: Auto manufacturing – locate next to tire, paint, seatbelt manufactures. Advantages- Labor pool, energy, related products, and greater efficiency. Also, reduces transportation cost. 5.12 Identify the characteristics of a labor force that make it attractive to industry. What characteristics of labor encourages companies (industries) to locate in the less developed world? 1. Access to an abundance of cheap, unskilled labor. 2. To avoid legistation, laws, and labor standards which are strict in the developed world (child labor) What characteristics of labor encourages companies (industries) to locate in the developed world? 1. access to technology – capital investments and skilled labor 2. labor creates a market What are generic characteristic of labor which any industry would find attractive/ 1. Work ethic 2. Responsible/dependable 3. Train-re-educate 4. Goal/ aspirations 5. Flexible 5.13 Explain how government subsidies on transportation influence the location of a give industry. 1. Exemption from taxes (property/business) for a set period of time. 2. 3. 4. 5. Interest free loans Guaranteed loans Subsides on employment wages Any other incentive attractive to the industry 5.14 Draw conclusions about patterns in the distribution of highly industrialized areas on the earth’s surface. Figure 13.6 page 223 1. Identify four highly industrialized areas: Answer: Canada, United States, Australia, and France. 2. Identify three agricultural low income areas: Answer: India, China, and Sudan. 5.15 Analyze the roles of stakeholders in the face of an environmental threat posed an industrial activity. Stakeholders are: Government, company, public citizens, and Environmental groups The role of each of this is highlight dangers, Discuss environmental impact, lobbying Government, constant monitoring and safety checks 5.16 Relate the location of areas at risk with the location of major industrialized areas. 5.17 Anticipate the kinds of action that should be taken to avert and environmental threat posed by industry. Before: Environmental impact Assessment (EIA) – the Industry, community, and the Government (decision makers) work together on the EIA. The Process, carried out by industry and government will identify any potential threats to determine whether the industry will be given “the green light”. Assume they get the go ahead. After/During: Constant Monitoring and Supervision: Periodic testing must be carried out to ensure the industry is staying within the guidelines outlined in the EIA. They may have to set time lines if they exceed the standard (i.e. Yellow light) Threat Occurs: Emergency Measures Plan (EMP): Stakeholders directly related to the environmental threat will begin action or way s to rectify the concern before it becomes an environmental nightmare. 5.18 Defend selected social/moral issues associated with manufacturing operations. 1. Moral Issue: Child labor – Is this is a local or global concern? This is a global concern because we support this activity by buying the products. This activity is actually preventing these countries from becoming more economically developed because children are being kept from getting an education. 5.19 Define the term tertiary activity Tertiary Sector- The sector of the economy concerned with the sale and use of economic goods and services. (Service sector) 5.20 Identify the four categories of service activities. 1. Distribute Services: Getting products from the manufacturer to the consumer. Example, wholesale businesses buy large amounts of products from manufacturers and sell smaller quantities to retailers. In turn the retailers sell these products to customers. 2. Financial Services: Involves providing capital to manufacturing companies and individual customers. Example: Banking institutions provide loans and insurance companies provide coverage for financial loss. 3. Personal Services: food services, entertainment, legal assistance and a wide range of other institutions provide personal services for manufacturing and consumers. Example: movie theaters, hair salons. 4. Government Services: Any service provided by a government employee. Thus, this is the only category which provides a public service. Example: Teachers, doctors, nurses. 5.21 Contrast private tertiary activity and public tertiary activity. Public Tertiary activities are those services provided by government employees. This category of tertiary activities, make up the largest share of the service sector. Example, social worker, swimming pool, hospital, and CONA Private Tertiary activities are those services provided by non-government agencies. Example, WalMart, McDonalds, Tim Horton’s, and the golf course. 5.22 Define the terms quaternary activity. Quaternary Sector: Like the tertiary sector, this sector is service based. However, it is kept separate from the tertiary sector because it involves the use of high technology to either, produce, retrieve, store, or distribute information. Examples: Mechanical Engineer developing the next engine for a leading automotive company. Chemical Engineer companiy developing the next drug for cancer treatment. A computer analyst working with the GNP figures for Switzerland. 5.23 Examine factors that affect the location of a tertiary activity. 1. Type of services: In essence, services are strategically located either to service the people if they are a “public service” or as a means to experience an economic return if they are a “private service”. For example, hospitals tend to be “regionally located” to service a geographic area, whereas hotel/motels tend to located where the operators realize an “economic return” 2. Service Price/Distance from the consumer: Some services must be located within a reasonable distance of the customer, especially if the service is a private service. The reason for this is that the further away a service location is from a customer, the costlier the service will be in terms of both time and money spent traveling to access the service. Note: Remember that population size has a major influence on the location of a tertiary service and more importantly the number of the same service offered. For example, a small city may only be able to support five restaurants or law offices, whereas a larger town should be able to support many more of the same type of tertiary service. Example: Page 224 #9 5.24 Examine factors that affect the location of quaternary activity. 1. Access to capital/Infrastructure: The country must have the ability to access the finances/money and technological equipment to successfully and actively participate in the quaternary industry. 2. Access to skilled Labor Force: the country must have the ability to access highly educated and/or technologically trained individuals who can work in the quaternary industry. 5.25 Analyze factors that account for patterns in world trade for a selected commodity. 1. Shipment by water: 90% of all world goods are shipped by water because water is the most economical method to move large quantities of goods over long distances. This is because shipment by water has very low line-haul or variable costs compared to other modes of transportation. 2. Regional share or world trade: If more than one country trades in a product (i.e. Wheat/fish) their relative share of the world market will be based upon the costs of their inputs (i.e. wages, equipment, line-haul costs) 3. Regionalization in world trade: countries buy from and trades sell to countries that are geographically closest to them. This ensures that transportation costs are minimized. The exception to this pattern exists when we look at specific commodities which must be bought from distance countries; for example, Canada cannot get all the tea it needs in the Western Hemisphere so it imports from the distant countries of India and China. 4. Level of Economic development: the more developed a country become, the more world trade it will secure. Economic development feeds trade and more trade feeds economic development. 5.26 Analyze factors that account for patterns in mass communication. 1. Knowledge and technological ability 2. Access to capital (money and equipment) 3. Access to research and development 5.27Examine how mass communication can affect the location of a work place. Understand the concepts of telecommuting and tele-working (working at home instead of at a specific company workplace.) Examples: 1. Many multi-national companies provide services to one country by operating in another country. For example, may U.S. insurance companies offer their products to U.S. citizen but the services may be processed in Scotland. 2. Medical services, is such now that a doctor in Los Angeles can actually use a computer aided robotic equipment to operate on a patient in Florida. 3. Education is such now that distance education makes having to attend a physical site unnecessary. 5.28 Evaluate the economic importance of a tertiary activity. Students should read pages 245 (the Bermuda experience) 1. Diversifies the Economy- allows for more individuals to move out of the primary and secondary sectors, which is beneficial to a countries economy. As well the tertiary industry creates needed employment opportunities for individuals by diversifying their skills in less developed countries which lack a well-developed manufacturing sector. As stated on page 250, the development of the tertiary industry in less developed countries will allow those countries that opportunity to leap-frog from the primary industries to the tertiary industries since they have little secondary sector development. This is presently evident in Barbados and India through the exportation of information. 2. Contributes to countries GDP- these sectors produce over 70% of the GDP in many countries. (Remember these sectors deal with value added services and high technology skills, especially with the quaternary sector in the more developed countries of the world. 3. Improved Standard of living- this is especially true for the tertiary industry of tourism in less developed countries such as Bermuda because its economy is do dependent on the tourist trade. (Typical of many tropical destinations) 4. Growth stimulates more growth- As the country benefits from the increase growth of the tertiary and quaternary industries, the growth feed off of itself. By this we mean that as the economy grows and the standard of living improves, domestic citizens within that country tend to spend more money which in turn allows the economy to grow. Question: What trend can you determine from each graph on page 246? Graph 1: The growth in International Travel Receipts, have increase continuously from 1970 to 1996. More and more people seem to be travelling outside their countries more often due to the increase in international tourism. People seem to have more time available for leisure and recreation resulted from more retirees, more benefits packages at work, and paid vacation time up to 3 to 4 weeks. People have more disposable income. Travel time and cost decreased with improvements in transportation. Graph 2: Percentage share of international travel receipts by regions: This graph shows that the greatest share of international travel receipts come from the more developed countries. 5.29 Analyze issues that affect the viability of a tertiary activity. 1. Population size/ Location 2. Type of Service and Price 3. Quality As we discussed with the hairstyling example (#9 on page 244) the tertiary service must be accessible and demanded by a sufficient number of individuals to make it viable. 5.30 Describe the economic importance of the quaternary sector. Refer to outcome 5.28 5.31 Examine factors that affect the growth of the quaternary sector. Students should read page 251 (how less developed countries are positioned to benefit from the information technology boom) 1. Lower Wages- this gives less developed countries a competitive edge. 2. Reducing cost of infrastructure- information technology is constantly improving at a steadily decreasing cost. As a result, it may be more advantageous for quaternary industries to set up new systems in less developed countries as opposed to upgrading older infrastructure in many parts of the developed world. What must less developed countries do to achieve this goal? 1. Develop long term goals- they must make realistic plans to address how they will work towards developing the quaternary sector. 2. Government investment – Governments of these countries must develop education and training programs of its citizens to meet the needs of the information technology companies. 3. Develop partnerships with Telecommunication companies- This companies need to work with the countries to develop more efficient and cost effective communication networks within and outside the country. This can only occur when these companies invest time, money and energy to reap the benefits in the future. 5.32 Evaluate the social and economic impact of the development in the quaternary sector. Economic Impact: 1. 2. 3. 4. Diversification of Economy creating more jobs within the country. Growth of a country’s GDP Improve Foreign trade relations with the world Increased tax base for the country Social Impact: 1. More opportunities to reinvest in fundamental programs such as education and health care. 2. Improved standard of living for its citizens 3. Opportunities for the country to increase its foreign aid commitment to less fortunate countries. 5.33 Define the term Gross National Product (GNP). GNP- refers to the total value of all goods and services produced in a country during a specific period of time (ie. One month, one year) Weakness: It is difficult to use this figure to determine standard of living in a country because it does not take into consideration the population of the country. For example, two countries may have the same GNP, but country 2 may have twice the population. Thus, from this we could assume that the standard of living in country 1 is higher but we would not know this if we did not know the population of the countries. 5.34 Define the term Per capita GNP. PER Capita GNP- When we divide the GNP of a country by the population of that country we get the per capita GNP. This is a much more accurate measure to use when referring to the level of development within a country. 5.35 Relate per capita GNP to level of economic development. Refer to figure 13.12 on page 231 or text. 1. What is the average world per capita GNP? Answer $5359 per person. 2. Identify two countries which have a per capita GNP of over 400% or the world average? Answer: United States and France 3. Identify two countries which have a per capita GNP of under 10% of the world average. Answer: India and China 4. From this information, what is the relationship between per capita GNP and the Level of Economic Develop? Answer: The Greater the per capita GNP within a country the higher the level of Economic Development. Example, more people earning money support the growth of an economy. 5.36 Relate employment structure (i.e. percentage employed in the primary, secondary or tertiary sector) to level of economic development. Refer to figure 13.11 on page 231 of text. 1. From the data in this table and based upon your geographic knowledge, explain the relationship between employment structure and level of economic development? Answer: Based on the table it seems that the more people employed in the primary sector the less developed the country is and the more developed countries seem to have a much stronger employment in the tertiary and quaternary sector. 5.37 Explain why it is beneficial to use more than one indicator when describing the standard of living of a region. 5.38 Relate selected social and economic indicators to level of economic development. 5.39 Analyze patterns in the distribution of selected socio-economic indicators with patterns in the distribution of developed or developing countries. Outcome 5.37, 5.38. 5.39 are combined Refer to page 233, figure 13.14 for different development indicators use to compare the standard of living throughout the world. 1. Which of these are economic indicators: Answer: per capita GNP, Percentage employed in manufacturing, percentage employed in agriculture, Gross national product, share of world coal production, volume of oil imports, volume of transportation exports. 2. Which of these are social indicators? Answer: Gender equity, literacy rate, number of people per doctor, life expectancy, family size, out-migration rate, birth rate, number of people per telephone. Note: It is quite dangerous to only use one indicator to classify the level of development in a country because that one indicator may be an outliner (i.e. misleading, base upon other indicators) Question #23 on page 233 Question: Steel production is often taken as a strong economic indicator. More specifically, countries with a large output of steal tends to have a strong economies. Can you find evidence for this correlation between steel production and economic development when you compare figure13.5 on page 222 and figure 13.12 on page 231? Explain. Answer: Yes, there is a correlation between steel production and economic development. With the exception of China, Russia, and Ukraine, the major steel producers have per capita GNPs that are equal to or greater than the world average.