Download ch11 IndustryNotes

Ch.11 Key Process #1
Where it all began? England
• Why did it begin in England?
a. Resources such as coal, iron ore, large labor
force
b. Technology: skilled mechanics and new
inventions
c. Economic conditions: overseas trade, colonies,
increased capital and demand for goods
d. Political/Social conditions: stable gov’t, strong
navy, colonies for raw materials
e. Physical geography: long coastlines &natural
harbors provided for easy transportation
Diffusion of the Industrial Revolution
Figure 11-2
Industrial Regions
Figure 11-3
Industrial Areas in Europe
Figure 11-4
Europe’s Industrial Areas
United Kingdom: dominated steel & textiles during 19th
century; today the UK has attracted international investment
through new high-tech industries that serve the European
market
Rhine-Ruhr Valley: iron & steel manufacturing b/c near coal
fields; Rotterdam (world’s largest port)
Mid-Rhine: centrally located in Europe
Frankfurt- financial & commercial center
Stuttgart- specializes in high-value goods that require
skilled labor
Mannheim- inland port on Rhine where lg. chemical
industry manufacturing synthetic fibers, dyes, and
pharmaceuticals
Industrial Areas in North America
Figure 11-5
North America’s Industrial Areas
New England: cotton textiles in 19th century w/ cotton imported from south & then
shipped to Europe
Middle Atlantic: largest U.S. market, attracts industries that need lg. # of consumers &
depends on foreign trade
Mohawk Valley: upper NY state, advantage of inexpensive electricity from Niagara Falls
Pittsburgh-Lake Erie: leader in steel during 19th century b/c of proximity to coal & iron
ore
Western Great Lakes: centered in Chicago, hub of transportation network & center of
steel production
Southern CA: largest area of clothing & textile production, 2nd for furniture, & major
food processing center
Southeastern Ontario: most important center for Canada
Asia’s Industrial Areas
Japan: became industrial power in 1950s-60s, manufacturing
concentrated in central region btw. Tokyo and Nagasaki
China: world’s largest supply of low-cost labor & world’s largest
market for many consumer goods
3 areas of manufacturing: Guangdong and Hong Kong,
Yangtze River valley btw. Shanghai and Wuhan, along
Gulf of Bo Hai from Tianjin and Beijing to Shenyang
South Korea: focuses on export-oriented manufacturing, leading
producer of ocean-going ships, manufacturing centered along rim
of country btw. Seoul (capital) and Busan (largest port)
Ch.11 key process #2
Why are Situation and Site Factors Important?
-Geographers try to explain why one location may prove more
profitable for a factory than other
-A company looks at 2 geographic costs:
a. Situation factors: involve transporting materials to & from a
factory
-a firm seeks to find a location that minimizes the
cost of transporting inputs to the factory &
finished goods to the consumer
b. Site factors: results from the unique characteristics of a
location (labor, land, & capital)
Situation Factors
• Manufacturers buy from companies & individuals who supply
input (minerals, materials, energy, machinery, & supporting
services)
• The farther something is transported the higher the cost so
manufacturers try to locate its factories as close as possible to its
inputs & markets
– Proximity to inputs: optimal location of factory is close as
possible to input if cost of transporting raw materials to
factory is GREATER THAN the cost of transporting the product
to consumers
– Proximity to markets: optimal location of factory is as close as
possible to customers if the cost of transporting raw materials
to the factory is LESS THAN the cost of transporting the
product to consumers
Situation Factors: Proximity to Inputs
• Inputs may be from the physical environment like minerals or they
may be parts or materials made by other companies
• Industry where inputs weigh more than the final product is called a
bulk-reducing industry
– to minimize costs they locate near source of inputs
– Starts out heavy & gets lighter or easier to transport
– Minerals are especially important inputs for many industries (iron
ore, tin, nickel, chromium, copper, lead, magnesium, zinc, etc.
• China leading producer of tin, tungsten, lead, magnesium,
zinc
• U.S. leading producer of Molybdenum
• Australia leading producer of nickel, titanium, lead, lithium
– Ex. of bulk-reducing industry:
• Paper mills are close to timber or wine makers close to
vineyards
Situation Factors: Proximity to Markets
• Proximity to markets is critical for 3 types of markets:
bulk-gaining, single-market manufacturers, & perishable
products
• Bulk-gaining industry: makes something that gains
volume or weight during production (starts out light but
gets heavier or harder to transport)
– Want to locate near where products are sold to
reduce transportation costs
– Ex. fabrication of parts & machinery from steel or
other metals such as microwaves, TVs, refrigerators,
& air conditioners
– Ex. bottled beverages, potato chips, bread, water
Situation Factors: Proximity to Markets
• Single-Market Manufacturers: specialized
manufacturers w/ only one or two customers so
optimal location is near customer
– Ex. producer of buttons, zippers, pins, or makers of
parts for motor vehicles
• Perishable Products: locate near markets
– Ex. food producer like bakers, milk bottlers, daily
newspapers
Transportation
The farther something is transported, sometimes results in lower
costs per km or mile b/c of things like labor costs, storage
costs, etc.
– Trucks most used for short distances (1 day or less), can
load/unload quickly
– Trains for longer distances b/c no stops needed but longer
to load
– Ships for long distances b/c cost per km is very low
– Air is most expensive; usually used for speedy delivery of
small bulk, high quality packages
• 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
• Break of Bulk Point – location where transfer among transportation
modes is possible
• Many times modes are mixed
-Containerization has helped facilitate w/ transfer of packages btw.
modes
• Seaports and Airports
• Companies that use multiple transport modes locate at a break of bulk
point
Ex. Copper
• Four major steps:
– Mining, concentration, smelting, then refining
– 1st 3 steps are bulk-reducing b/c of weight of
mineral so the industries want to be near the
input (largest area is in AZ)
– 4th step of refining and manufacturing are located
near markets on the E. & W. Coast
Ex. Steel
• Example of bulk-reducing industry
• Situation factors have changed distribution of steel mills with
U.S. & worldwide
– Mid 19th century-SW PA
– Late 19th century- Lake Erie b/c of discovery of iron ore
– Early 20th century- Southern Lake Michigan b/c of shift to
minimize transportation costs
– Mid 20th century- E. & W. Coast b/c iron ore started coming
from foreign markets
– Late 20th century- Proximity to markets due to shift from
steel mills to minimills using scrap metal b/c this input is
widely available
• Shift from steel mills in MDC to LDC over the last 30 yrs.,
mainly China, India, & S. Korea
Ex. Motor Vehicles
• Bulk-gaining industry
• 3 major industrial regions house 80% of world’s final assembly production (40%
E. Asia, 25% Europe, & 15% N. America)
• 10 carmakers control 85% of world’s sales
– 2 in N. America: Ford & GM
– 4 in Europe: Germany’s Volkswagen, Italy’s Fiat (which controls Chrysler),
France’s Renault (controls Nissan), & Peugeot
– 4 in E. Asia: Japan’s Toyota, Honda & Suzuki and S. Korea’s Hyundai
• Carmakers’ assembly plants account for only around 30% of the value of the
vehicle, while independent parts makers supply other 70%
• Many parts makers considered single-market manufacturers & cluster near final
assembly plant
• Regional Distribution:
– N.America: Auto Alley btw. Michigan & Alabama, especially Detroit, MI
– Europe: east-west corridor btw. UK & Russia, E. Europe is growing
– E. Asia: China’s plant near east coast
Why Are Site Factors Important?
• Labor
– The most important site factor
– Labor-intensive industries: industry where wages & other compensation paid
to employees constitute high % of expenses
• China has ¼ of world’s manufacturing workers, India 1/5
• Examples: motor-vehicle workers are paid much higher hourly wages than
textiles workers, yet textile industry is labor intensive, & auto industry is
not
– Textile and apparel spinning (labor intensive so primarily done in lowwage countries) Ex. China produces 2/3 world’s cotton thread
– Textile and apparel weaving (labor intensive)
– Textile and apparel assembly (located primarily in MDCs)
• Land
– Rural sites (more land available for one-story buildings)
– Environmental factors
– Access to transportation routes in suburbs or rural areas
• Capital: location near banks or financial institutions that will invest or lend $
Location Models
Weber’s Model
Manufacturing plants will
locate where costs of
Hotelling’s Model
transportation, labor, and
Location of an industry
agglomeration are the
cannot be understood
least
without reference to
Theory: Least Cost
other industries of the
Theory
same kind
Theory: Locational
Interdependence
Losch’s Model
Manufacturing plants
choose locations where
they can maximize profit
Theory: Zone of
Profitability
Weber’s Least Cost Theory
• Alfred Weber, (1868-1958) a German economists, published
Theory of the Location of Industries in 1909. His theory was
the industrial equivalent of the Von Thunen Model.
• Manufacturing plants will locate where costs are the least.
• Takes into account :
– Transportation: need to weigh cost of moving raw
materials & finished products to market
– Labor: cheap labor may help to balance high
transportation costs
– Agglomeration: clustering of similar businesses that share
resources
• Ex. RTP & Silicon Valley for high-tech, Cities of Milan or
Paris for fashion, LA for motion picture production
deglomeration
• Traffic, pollution,
full waste dumps
• High rent and taxes
• Labor shortages
and turmoil
Try to be centered to the cost of all 3
Exceptions/Criticism of Weber’s
Least Cost Theory
• Taxes or tax breaks
• Substitution principle:
– suggests that business owners can juggle
expenses, as long as labor, land rents,
transportation, & other costs don’t go up all at
once
– you can substitute the high costs of one or two
things (ex. land rents, transportation, etc.) for a
really low cost of another ( ex. labor)
• –Harold Hotelling Model (Two dimensional)
– Locational interdependence – the location
of industries can’t be understood w/o ref. to
the location of other industries of like kind
– Two vendors located on pts. A & C,
eventually gravitate toward pt. B (moving
from this pt. will only hurt profitability)
– A third vendor complicates this (spatially)
Losch’s Model: Zone of Profitability
Ch.11 Key Process # 4
Why are situation and site factors changing?
• Changes within Developed Regions:
– Industry is shifting away from traditional manufacturing
regions in NW Europe and NE USA
– Shift in industry from NE to South and West in USA
• NY and PA lost jobs in textile, steel, clothing, &
fabricated metal manufacturing
• CA & TX had largest increases in manufacturing jobs
• What brought about the shift?
– TVA brought electricity to rural south
– Construction of roads
– Air-conditioning
– Right to Work Laws
Ch.11 Key Process # 4
• Shifts in Manufacturing: USA
– Textile production (located primarily in SE like the
Appalachian, Piedmont, & Ozark mountains; SC, NC, AL, GA)
– NC large producer of hosiery & socks
Major Manufacturing Regions of North America
What does America still make?
• Automobiles (Ford, Gm, Chrysler- Detroit), foreign
automakers assemble cars here as well
• Airplanes (Boeing, McDonnell Douglas, Seattle)
Commercial and military
• Pharmaceuticals (drugs)
• Entertainment (Music Movies- Hollywood)
• Computer software (Silicon Valley & RTP)
– ex. TECHNIPOLES (An area planned for high
technology with agglomeration built on a synergy
among technological companies)
• Military weapons
Ch.11 Key Process # 4
Why are situation and site factors changing?
• Shifts in Manufacturing: Europe
– Change from NW to S & E
– European gov’t policies have encouraged this relocation
– EU Structural Funds provide assistance to areas called convergence regions
& competitive and employment regions
• Convergence regions primarily in E & S where income in lower
• Competitive & Employment regions primary in W. Europe’s traditional
core industrial areas where manufacturing has decreased
– Spain had most rapid growth especially in motor vehicle industry
• Major industry region is in Catalonia (motor vehicle & textile industry)
– Since the fall of communism in E. Europe many countries have had much
industrial development (ex. Hungary, Czech Republic, & Poland)
– Central Europe has a combination of both site and situation factors that
draw in manufacturing
• Labor
• Market proximity
Ch.11 Key Process # 4
• Emerging Industrial Regions:
– Labor is biggest site factor influencing development in LDCs
• Manufacturers are moving to where there are lower wage rates
• Labor-intensive industries are moving to LDCs
• Ex. Shift from apparel being made in USA declined dramatically from
1990 to 2010
– Outsourcing: turning over much of responsibility of production to
independent suppliers
• Transnational corp. outsource jobs to remain competitive in the global
economy
• Identify areas where they can outsource jobs and at the same time keep
factories/jobs that require highly skilled workers in MDCs (called new
international division of labor)
• Outsourcing is different from traditional mass production of vertical
integration (a company controls all phases of production)
• Ex. Car parts, iPhone
Fashion Stores
(Gucci, Polo):
1,2
Department Stores
(Aeropostle, Gap):
2,3,4
Mass Merchandisers
(Sears, JC Penney):
2,3,4
Discount Stores
(Wal-Mart, Target):
3,4,5
Outer rings: later and poorer
Small Importers
4,5
NAFTA
• North Atlantic Free Trade Agreement
– Eliminates most barriers, such as tariffs, to moving goods among Mexico, USA,
& Canada
– Mexico attracts labor-intensive industries & manufacturing has increased since
1994
– Plants in Mexico near U.S. border are known as maquiladoras
• under U.S. & Mexican laws, companies receive tax breaks if they ship
materials from the U.S., assemble components at a maquiladoras plant in
Mexico, & export the finished product back to the U.S.
– Fears of U.S. & Canadians:
• Shift of industries such as textile & food processing to Mexico b/c of lower
wages & less stringent laws regarding air & water quality
– Fears of Mexico:
• Jobs are being lost to LDCs that have lower wage rates
• Situation factors do give Mexico a competitive edge
Maquiladoras
BRIC & BRICS
• BRIC: Brazil, Russia, India, & China
– Countries expected to dominate global
manufacturing in 21st century
– Currently control 1/6 of world GDP
– China is 2nd, Brazil 7th, Russia 9th, India 11th
– China & India have largest labor force, while
Russia & Brazil have large amounts of inputs
critical for industry
– S. Africa joined meeting w/ other 4 emerging
countries in 2010 (now BRICS)
– Indonesia & Nigeria are expected to rise as well
China: Newly Industrialized Country
• Major industrial growth after 1950, in 1960s
– State-planned
– Focus on:
• Northeast district
• Shanghai and Chang district
• Today
– Companies that bring production (not the whole
company)
– Advantages
• Chinese labor
• Special economic zones (SEZs)
Left-Chinese industrial air
conditioner plant
Right-Singapore container
port
Eastern Asia-China
• Shanghai recently beat out
Rotterdam as the busiest
port in the world.
• China has many jobs that
are outsourced or moved
offshore.
• Northeast is China’s rust
belt with many state-run
inefficient factories.
• Dalian, Shanghai, Zhuhai,
Xiamen & Shenzhen- smogchoked cities jammed with
people-rapidly changing
with new construction &
renewal
South Asia-India
• The Bihar Steel Mill in India
produces high quality steel at a
low price-the down side-low
pay, few environmental
restrictions=pollution.
• India’s service sector is also
growing very rapidly.
• The Delhi Call Center at right is
typical of the the outsourcing
done by many Western firms.
• India has millions of low paid
blue-collar workers and
millions of white collar, high
tech. workers
How Has Industrial Production Changed?
• 2 locations factors influence industries to stay in traditional
regions: availability of skilled workers & rapid delivery to
markets
– Ex. Computer manufacturing & clothing industry (NY, CA)
• Fordist : Dominant mode of mass production during the 20th
century w/ production of consumer goods at a single site
• Post-Fordist : Current mode of production w/ more flexible
production practices
– Goods not mass produced
– Production accelerated and dispersed around the globe
– Multinational companies that shift production,
outsourcing it around the world
– 4 types of work rules: teams, problem solving, leveling,
productivity
Proximity to Markets: Time-Space
Compression
• Improvements in transportation and
communications technologies
• Many places in the world more connected than ever
before
Proximity to Markets:
Effects of Time-Space Compression
• Just-in-time delivery
– Keeping just what is needed for
short-term production
– New parts shipped quickly when
needed
– Limits unnecessary stock &
storage space is compressed
which saves $
– Industry is located near
consumer (ex. car parts near
assembly plants)
– Disruptions w/ just-in-time
delivery:
– Labor unrest, traffic, natural
disasters
Can prosperity be restored in
older, industrial, U.S. Cities?
Hartford
Detroit
Pittsburgh
Deindustrialization
• Deindustrialization
– A process by which companies move industrial jobs to other
regions with cheaper labor
– Reinvestment in higher profit areas
• Sunbelt states (non-union)
• Semi-periphery and Periphery
– Period of high unemployment in deindustrialized region
– Goal: Switch to a service economy (tertiary, quaternary and
quinary)
• Newly industrialized regions
– Pro–free trade laws
– Lax environmental regulations
Problems w/ Deindustrialization:
•Has left older industrial cities struggling to find their
economic niche.
•Older industrial cities haven’t fully transitioned from an
industrial economy to an innovative, entrepreneurial one.
•This economic shift began with companies fleeing older
industrial cities for their suburbs.
•Decreasing transport costs, low-cost land, and the search
for lower-skilled, lower-cost workers took companies south
and west.
•More companies are moving labor-intensive operations out
of the country, taking advantage of low-cost workers and
reduced regulation.
•Problems w/ Deindustrialization:
•Long-term legacy costs of the industrial economy continue
to hamper the recovery of older industrial cities.
•The dominance of older established industries can hinder
entrepreneurialism and diversification.
•Lower levels of educational attainment put these cities at a
disadvantage in the competition for new firms.
•Many are left with a tremendous environmental legacy:
there are an estimated 5 million acres of abandoned
industrial sites and contaminated brownfields (abandoned
or underused industrial property) in U.S. cities alone.
Is revitalization possible?
•Older industrial cities have numerous assets that set
them apart.
•Cultural assets: cultural institutions, Professional sports
teams, vibrant street life.
•Economic assets: regional employment centers,
downtown cores, concentrations of universities and
medical industry.
•Physical assets: waterfronts, transit infrastructure,
historic buildings.
Key Process #3 Air Pollution
• Correlation: as a country’s per capita income increases so does
pollution
– Exception: some European countries
• Air pollution:
– Mostly generated from factories, power plants, & motor vehicles
b/c of burning of fossil fuels
– Human use of CFCs (chlorofluorocarbons) such as Freon used in
refrigerators & air conditioners
– Global implications: global warming & greenhouse effect
– Effects: increase water temp. causing increased bacterial growth &
killing species, melting polar ice caps causing flooding, changes in
precipitation patterns, depletion of ozone layer
– What is being done?
• Countries agreed by 2020 to stop using CFCs in MDCs and by 2030 in LCDs
Key Process #3 Air Pollution
– Regional scale: Air pollution
• Acid rain (in USA the 3 major industrial regions greatly affected)
– Generated in Ohio and other industrial states along southern Great
Lakes
– Most effected is East Coast
– Local scale: urban areas
• Lg. # of factories, motor vehicles, & pollutants from high # of residents
• Increase in Carbon monoxide, hydrocarbons which causes photochemical
smog, particulates (dust & smoke particles)
– Most polluted cities: Iran, Pakistan, India, China
– What is being done?
• Laws in MDCs are controlling emissions
– Ex. U.S. require catalytic converters on motor vehicles
Key Process #3 Waste Pollution
• Solid Waste:
– About 4 pounds of waste per person is generated each day in the
U.S.
– Paper products account for largest percentage
– Landfills: most common way to dispose of waste
– Alternative to landfills is incineration: burning trash reduces its bulk
by ¾ & can generate energy by producing steam heat from the
incinerator
• Hazardous Waste:
– Includes heavy metals like mercury, cadmium, & zinc, cyanides, acids,
PCBs, etc. usually generated from unwanted by-products of
manufacturing
– Mining is largest polluters
– Can cause cancer, mutations, chronic ailments, or death if not
disposed of properly
Key Process #3 Water Pollution
• Industries use lots of water
– Ex. aluminum industry locate near dams to use the cheap hydroelectricity to
(Alcoa is largest producer of aluminum)
• Sources of water pollution
– Point-source pollution: enters at a specific location
• Usually smaller in quantity & easier to control
• 2 main point sources are water-using manufacturing & municipal sewage
systems
– Manufacturers of steel, chemicals, food processing
– Water sewage systems are rare in LDCs & wastes from farms, factories,
& residents can pollute the water causing diseases like cholera,
typhoid, & dysentery
– Nonpoint source pollution: comes from a lg. diffuse area
• Higher quantities & harder to control
• Biggest contributor: agriculture
Duke Energy Coal Ash Spill
• Other examples of major pollution issues in
history
– BP Oil Spill 2010
– Chernobyl 1986
– Japan’s nuclear disaster at Fukushima in 2011