Download World Geography 3202

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World Geography 3202/3200
Unit 5 - Secondary and Tertiary Activities
Study Guide
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Identify natural and human inputs in a manufacturing operation
Analyze the processes in a manufacturing operation.
Describe the three processes that may be used to change a raw material into a useable form.
Define the terms labour-intensive and capital intensive.
Analyze a manufacturing operation to determine if it is labour-intensive or capital intensive.
Define the terms light industry and heavy industry.
Analyze a manufacturing operation to determine if it is an example of light-industry or heavy-industry
Examine the influence that site conditions and situation may have on the location of an industry.
Compare the terms resource-oriented and market-oriented industry.
Be able to determine the influence that weight-gain and weight-loss during production of a product has upon the
location of an industry
Describe the advantage of the agglomerating tendency.
Identify the characteristics of a labour force that make it attractive to industry
Explain how government subsidies on transportation influence the location of a given industry.
Draw conclusions about patterns in the distribution of highly industrialized areas on the earth’s surface.
Analyze the roles of stakeholders in the face of an environmental threat
Relate the location of areas a risk of environmental damage to areas of major industrialization.
Anticipate the kinds of actions that should be taken to avert an environmental threat posed by industry.
Defend social/moral issues associated with manufacturing operations.
Define the term tertiary activity.
Identify the four categories of service activities, and be able to correctly categorize a given example as one of
these four categories.
Contrast private tertiary activity and public tertiary activity.
Define the term quaternary activity.
Examine factors that affect the location of a tertiary activity
Examine factors that affect the location of a quaternary activity.
Analyze factors that account for patterns in world trade for a selected commodity.
Analyze factors that account for patterns in mass communications.
Examine how mass communication can affect the location of a workplace.
Describe the economic importance of the tertiary sector.
Analyze issues that affect the viability of a tertiary activity.
Describe the economic importance of the quaternary sector.
Examine factors that affect the growth of the quaternary sector.
Evaluate the social and economic impact of developments in the quaternary sector.
Define the term gross national product. (GNP)
Define the term per capita GNP.
Relate per capita GNP to level of economic development
Relate employment structures to levels of economic development
Explain why is it beneficial to use more than one indicator when describing the standard of living of a country.
Relate selected social and economic indicators to level of economic development
Analyze patterns in the distribution of selected socio-economic indicators with the patterns in the distribution of
developed or developing countries.
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World Geography 3202/3200
Unit FIVE: Secondary and Tertiary Activities
Unit Notes
Manufacturing; An Introduction
Three Sectors of the Economy
This particular lesson deals with secondary processing or manufacturing. However it is useful to have a perspective for
where manufacturing fits in the whole economy. The three main sectors of ant economy are briefly outlined below and as
you can see manufacturing is the secondary economic activity.
Primary economic activity involves the collection of raw materials from the earth. Farming, fishing, mining,
forestry are the classic parts of the primary economy. The farmer takes plants from the land, the forester takes
trees from the forest, the fisher takes fish from the ocean and the miner takes ore from the ground. All involve
collecting natural resources.
Secondary economic activity involves processing or manufacturing raw materials into products for people to
buy. It is often referred to as the manufacturing or processing sector. The cows are butchered in to roasts, T-bone
steaks and ground beef and packaged for sale at the grocery store; the trees are milled into lumber or pulped into
paper; the fish are gutted, filleted, and frozen for market; while the ore is refined into steel ribbons or copper wire
or gold ingots. You can see that there would be a multitude of examples for secondary processing but all the
activities start with a raw material and convert it to a product for sale. This is sometimes referred to as Value
adding. The tree would be much less expensive to buy than the lumber. The lumber has value added. Ship
building, is an example of the manufacturing sector.
Tertiary economic activity does not involve raw materials rather it involves providing service to people. Hence
it is often referred to as the service industry. Nurses, doctors, lawyers, teachers, waitresses, hairdressers, sales
people all provide services for other people. Tourism is an important part of the tertiary sector and golf has
become a thrust for investment in Newfoundland & Labrador.
The Language of Manufacturing
Inputs = materials & factors that go into making a product. Example; raw material, power, buildings, land, labor,
decisions, capital, machinery There are NATURAL inputs (Those that exist in the natural world such as minerals,
water, etc.) and there are also HUMAN inputs, which are those associated with humans such as labour, knowledge
etc.)
Manufacturing processes = those processes that change a raw material to a usable form. Three types:
Conditioning = minimal change to a resource. Example; logs into lumber; fish into fillets
Analytical = resource converted to a number of different products. Example; cow into leather, milk &
cheese
Synthetic = several resources are combined to make one resource. Example; light bulb has glass,
tungsten, Nitrogen & aluminum.
Outputs = finished product from a manufacturing process. For example the output from the fish plant is fish
sticks or frozen fish fillets.
Profit & Manufacturing
Profit = the difference between the price charged for the product and the money spent in manufacturing, shipping
and selling the product. There are many aspects of cost to consider when setting the price of a product.
Remember the purpose of business is to make money and that means it must make a profit. Manufacturing
businesses are in the business of value adding so they must consider the cost of adding value
Labor is often the most expensive part of an operation. wages, CPP, EI, Pensions, Sick days, Holidays etc.
 The cost of raw material is an important factor to consider and the difficult thing for manufacturers is that
the price of materials vary with the markets.
 The cost of equipment and utilities must also be considered.
 Training costs money but is important to increased efficiency and quality of product.
 High volume products like pop can have a low profit margin while low volume products like Jewelry
require a high profit margin
 In any event for manufacturers to turn a profit their product must meet market demands.
Defining Types of Industry
Industry can be classified in many different ways. We are going to look at two ways of classifying industry.
1.
2.
Labor Intensive vs. Capital Intensive
Manufacturing businesses can be classified based on the process. All manufacturing businesses can be classified
as either requiring a lot of labor to do the processing or as requiring a lot of machinery to do the processing.
Obviously in this day and age there is a lot of machinery doing work that humans used to do. Some manufacturing
businesses might be more difficult to classify because they require a lot of capital and a lot of labor.
 Labor intensive = requires a lot of person hours to produce the product. Ex. Jewelry making
 Capital intensive = requires a lot of expensive equipment to make the product. Ex. Automotive industry
Heavy vs. Light Industry
Manufacturing businesses can be classified based on the output. All manufacturing businesses can be classified
as either producing large, expensive items for other business to use in manufacturing or transportation or as
producing small items for consumers to purchase directly. Some manufacturing businesses might be more
difficult to classify because they produce items that might be used by business or by private people.
 Heavy industry = produces big expensive products for other industry. Ex. Ship yard, tractor production
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
Light Industry = produces products for consumers. Ex. Pop industry.
Factors affecting Industry Location
Site/Physical Cost Factors
Three major factors of site (physical location)
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Proximity to raw material. Heavier & bulkier the raw material the closer the industry will be located to reduce
transportation costs. “Resource Oriented Industry”. Industry that is located close to the resource because it is to
heavy/bulky to transport. (Often time communities spring up around resource industries. Labrador City,
Churchill Falls, Grand Falls-Windsor and Bonavista are good examples.)
Land: relatively cheap to purchase or rent, level, good drainages, dense well-settled soil.
Energy; They require a cheap and reliable source of energy, however this is not as important a factor today due to
our ability to transport power long distances.
Human-based Cost Factors
“Market Oriented Industry”
Industry that is located close to the market because the product is expensive to transport. The resources are not bulky or
expensive to transport. The Soft drink industry is a good example.
Market vs. Resource Oriented Industries:
As we examine the influence of “weight gain” & “weight loss” on the location of industry we see that:
 If the product weight is greater (weight gain) than the input resources it is located near market.
 If product weight is less (weight loss) than the input resources it is located near resource.
“Agglomerating Tendency”
Agglomerating tendency refers to the tendency for factories producing related products to locate close to each other for
mutual benefit.
Ex. Car factory & tire factory. How does each benefit by being located close to each other?
Industrial Parks
Industrial parks provide certain advantage for a business. Existing infrastructure of roads, on ramps and off ramps to
highways, large lots, sewer, ample electricity, and close location to related industries make industrial parks attractive for
manufacturing businesses.
Labor force characteristics that attract business
i)
Wages expected: lower wages in some developing countries like Mexico, and the Philippines attract
manufacturers.
ii)
Training: highly skilled laborers can attract businesses that require welders, mechanics, carpenters etc.
iii)
Benefits (EI, Pensions etc); lower costs of employment insurance, pensions, etc. can attract business just as
easily as low wages.
iv)
Availability; a high unemployment rate might attract business, especially if large numbers of workers are
required.
Government Influence
“Transportation subsidies affect the location of industry”. A Subsidy is assistance(money, construction of
infrastructure) given by the government to help businesses.
 Subsidies (Governments giving money to industry) allow business to locate farther from the recourse.
 Subsidies allow governments to encourage industry in rural areas.
Examples: Ice breakers in Botwood, Roads in Labrador, Cost of coastal transportation in Labrador, Cost of
crossing the Gulf.
Tax breaks affect the location of Industry.
Provinces like Newfoundland have attempted to attract business by offering tax breaks. The company realizes a financial
break while the province realizes the advantage of putting people to work.
Industry Location; The Global Picture!
Look at figure 13.6 on page 223 of your textbook.
The highly industrialized areas on the earth's surface are concentrated in 4 definite regions:
 North America
 Western Europe
 Japan
 Australia
Do you see any other patterns?
Environmental Threats and Different Viewpoints
Industrial Waste
Industry has waste out put as well as product output. Three of the many types of waste are outlined below.
Green house gasses; ex. Carbon dioxide, Chlorofluorocarbons & methane. Causes global warming & associated problems.
Acid Rain; ex. Sulfur & nitrogen. Decreases soil fertility, kills fish, corrodes buildings
CFC’s (chlorofluorocarbons); ex. Refrigerants & sprays. Breaks down ozone which filters harmful cancer causing UV rays.
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The Role of GOVERNMENT and INTEREST GROUPS in the face of environmental threats posed by industry.
Remember; “It is the extreme views that define the middle”.
Interest groups often play the extremist. They raise valid points of concern and argue them vehemently.
Government has the role of balancing environmental concerns & encouraging economic development.
Averting an environmental threat posed by an industry.
Analyzing the acid rain map p. 238 and the industrialized country map p. 223 and the prevailing winds map p. 64 you can
see that prevailing winds are transporting acid rain from industrialized areas and depositing it in locations down wind
from the industrialized area. It is important to note that industrialized areas as well as those areas down wind from
industrialized areas are affected.
Any solution to industry related problems will have to be dealt with by cooperation and consultation between different
nations. The major environmental summits that have been held in recent years are examples of that. The recent Kyoto
Summit and the summit held in Rio de Janeiro several years ago attempted to get countries to reduce their carbon dioxide
emissions.
I.
II.
III.
IV.
Solutions to solving the acid rain problem include;
Government regulation to reduce sulfur & Nitrogen emission
Development of sulfur filtering equipment
Tax breaks for companies if they reduce pollution output
Meetings and consultation between business, environmentalists and government to decide on a plan of action.
Moral Issues & Industry
There are many social/moral issues associated with manufacturing operations. Some of the obvious concerns that people
have had over the years include child labor, safety of workers and a Company’s responsibility to be environmentally
friendly.
Business drives the economy and provides us with our high standard of living here in the western world. The question we
have to keep asking ourselves is "are industries acting within the moral parameters of our society?”
In Canada, and most well developed nations there are strict regulations about safety, waste emissions, age of workers, and
corporate responsibility. In some developing nations the regulations might not be in place or they might be relaxed in the
hope of stimulating business instead of inhibiting it.
Tertiary Activity & Location Factors
Tertiary Activity: Also know as Service industry. Providing services for people Ex. Doctor, lawyer, waitress, tourism
industry, mechanic, teacher.
Public vs. Private Tertiary activity.
 Private service industry is run by private business and requires that a profit be made from the service. Ex.
Mechanics, Lawyers, Tourism.
 Distributive activities: involves the transportation and sale of all products from manufacturer to consumer.
ex. truck driver, warehouse manager, sales person
 Financial Activity: involves banks, insurance companies, financial advising companies, and trust companies.
 Personal Service: involves a wide range of services from legal services, to food services, to entertainment
and counseling services.
 Public service industry is operated by Government and is not for profit. On the contrary it cost tax payers
money. Ex. Education, health care, mail, water, sewer, roads. Hence the term “ public servant”
It is important to note that many careers in the tertiary sector can not be classified as public or private. A teacher can work
in the public school system which is public service or s/he can work for a private college which is private service.
Why does the government provide some tertiary services?
Service Availability vs. Population Size.
Larger populations support a wider range of services.
Consider: Health services, Education, recreation facilities, shopping facilities, hotels, restaurants and you will
see that the range of services available is directly related to community size.
Service Industry: Location, economic importance and viability
 Location: services must be located close to a large enough market to produce DEMAND.
 Viability: services are only viable as businesses if the demand is high enough & the price is reasonable.
 Economic importance: all developed countries have most of their work force in tertiary activity.
 Tertiary Activity; Continuing Growth
Economists recognize that the tertiary industry has expanded significantly in the last 100 years. Figure 14.3 on
page 243 of your text shows that in Canada the tertiary sector of the economy has grown from 36% of GNP - 73%
of GNP over the last 100 years. A quick survey of any high school class will reveal that students are expressing a
preference for a career choice in Tertiary activity.
The entire tertiary sector is growing and is becoming a much larger part of the economy of developed nations. The
multiplier effect is in part responsible for this phenomenon. As the secondary sector of the economy grew there
were more people working in urban areas as manufacturers. The concentration of people meant there was more
need for services. Service industries grow in turn. The people working in the tertiary industry need services too
so the growth of the service industry continues.
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While the entire service industry is growing we will look at two tertiary growth sectors in particular, International
tourism and information technology.
International Tourism
In the last 1/4 of the twentieth century International tourism increased 12.5%. There are several reasons for this:
i)
More leisure time since WWII due to:
a. More retired people because of aging population
b. Younger retirement age. It did average 65 now it is closer to 55.
c. The average holiday time has increased from 2 weeks to 4 weeks
ii)
More money for leisure & recreation since WWII due to:
a. Wages have increased giving people more disposable income.
b. Travel time and travel costs have decreased.
c. Travel agencies are offering all inclusive packages which attract people
iii)
Appealing advertising campaigns by travel agencies.
a. Travel agencies and related tourism industries have both been a cause and a result of the increased
interest in tourism.
Tourists tend to be looking for any one or combination of three destination sites.
I)
Climate-oriented Sites:
 Warm climates, sunbathing and swimming attract some tourists from colder regions.
 Abundant snow and good skiing conditions attract those avid skiers and snowmobilers
II)
Landscape-oriented Sites:
 Some tourists are attracted by site seeing opportunities. For example, the Grand Canyon is an example of a
landscape-oriented site.
III)
Culture-oriented Sites
 Some tourists are attracted by historic sites like Athens and Jerusalem.
Quaternary Sector of the Economy
The quaternary sector of the economy is a specialized part of the Tertiary Sector.
QUATERNARY activity refers to activities that involve the collection, recoding, arranging, storage, retrieval, exchange,
and dissemination of information. Computers, Cell Phones, E-mail, and the WWW are some of the examples of new
information technology that drives the quaternary sector.
Standard of Living Indicators
Economic Indicators
As we saw in Section 1 development is a difficult thing to define. Economists, sociologists, cultural geographers and all
social scientists use "indicators" to give some degree of measure to the concept of development.
Again, as we saw in Section 1, there seems to be two aspects to development, economic (financial) and social (human).
Social scientists have developed economic indicators and social indicators. There is some debate over which indicators are
a better measure of development. It is very likely that a variety of indicators is the best way to determine the level of
economic development. This lesson deals exclusively with 2 economic indicators.
Economic Indicators
There are a variety of economic indicators which can provide a measure of the degree of development in a country. We
will look at two indicators, Employment Structure and GNP per Capita.
I)
Employment Structure
Economists have recognized that those countries that have become "developed" have been able to move their economy
beyond the primary sector to the secondary sector which in turn grows the tertiary sector. In other words developed
countries have a much larger percentage of their work force employed in the secondary and tertiary sectors, while lesser
developed countries have most of their work force employed in the primary economic sector. When economists calculate
the percentage of people working in each economic sector the statistic created is known as the employment structure.
By way of example we will look at country "X" and country "Y" which have very different employment structures. By
using fictional countries you have no other preconceived notions of the countries or their level of development. We will see
how economists would classify each countries development based solely on the employment structure.
Primary Sector
Secondary Sector
Tertiary Sector
Employment Structure for Country “X”
60%
15%
25%
Economists would look at country X and realize that it is not a developed country. It might be developing but a developed
country would have a great majority of its workers in the secondary and tertiary sectors of the economy.
Country "Y" has an employment structure that is very different.
Employment Structure for Country “Y”
Primary Sector
5%
Secondary Sector
25%
Tertiary Sector
70%
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Economists would classify country Y as a developed country. It has a great majority of its workers in the secondary and
tertiary sectors of the economy.
Look at figure 13.11 in your textbook and you will see real employment structure stats for the same countries.
II)
GNP per Capita
GNP per capita is a measure based on the Gross National Product (GNP) of a country. GNP refers to the total value of the
production of goods and services in a nation measured over a year, together with any money earned from investment
abroad, less the income earned with in the nation by non-nationals. The GNP per capita takes that dollar value and divides
it by the population of the country.
For example if the GNP for Country X was $5,000,000 and there were 1,000 people in the country then the GNP per capita
would be $5,000,000/1,000 people = $5,000 per person or a GNP per capita of $5,000.
It is very likely that country X would have a much higher GNP per Capita.
Economists do recognize there is a major flaw in this measure as a measure of "Standard of Living". This measure is an
average that assumes that the wealth in the country is evenly spread. This is often not the case. If one or two families in
the country are very rich and control most of the money then many of the people could be living in poverty even though the
GNP per capita is high.
Look at Figure 13.12 on page 231 of your text. This map shows you a comparison of countries based on GNP per capita.
The disparity between countries should reveal a familiar pattern to you.
NOTE: GNP and GNP per capita are usually expressed in U.S. Dollars
III)
Other Indicators of Development
There are a veritable plethora of different indicators that economists and social scientists use to give an indication of the
quality of life in a country.
The United Nations ranks countries and for six years in a row, Canada ranked first among 175 countries in the United
Nation's quality of life survey. The Human Development Index (HDI) examines the health, education and wealth of each
nation's citizens by measuring:
i.
life expectancy;
ii.
educational achievement -- adult literacy plus combined primary, secondary and tertiary enrolment; and
iii.
standard of living -- real GDP per capita based on PPP exchange rates.
The UN also computes a Gender-Related Development Index that extends the HDI to take into account gender differences
in the ranking criteria. Canada was ranked 1st in this regard in 1997, up from 2nd in 1996.
Canada has the best-educated people and the highest literacy rate in the world. Canadians live longer than anyone on the
planet, except people in Japan and Iceland. To read more about our high standard of living visit http://www.englishvancouver.com/canada-human-development/.
Some of the many indicators the United Nations and other agencies report include:
i.
Human settlements (rural vs. urban)
ii.
Water supply and sanitation (availability)
iii.
Housing (quality of construction)
iv.
Population Youth and elderly populations
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Health (healthiness & health care accessibility)
vi.
Child-bearing (infant mortality rate)
vii.
Education (access & quality)
viii.
Literacy (literacy rate)
ix.
Income and economic activity (GNP or GDP per capita)
x.
Unemployment (unemployment rate)
http://www.un.org/depts/unsd/social/index.htm
What factors affect the location of a quaternary activity?
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ii.
iii.
Where education levels are high
Where there is a high degree of communications infrastructure, such as advanced telephone technology (fiber
optics and cell-phone availability)
Where governments can afford to spend money on research in hospitals, universities etc.
Conclusion:
Quaternary activity tends to be concentrated in developed countries.
Analyze factors that account for patterns in mass communications.
Mass communication tends to occur in three identifiable patterns.
First, it takes place within developed countries. For example, Canada has an extensive network that allows for the rapid
transmission of mass communications through television, radio, internet, print media etc.
Second, it takes place between the developed countries of the world. Developed countries all have the infrastructure to
allow for the sharing of mass communication between each other.
Third, mass communications tends to flow from developed countries to developing countries. In particular, the most
developed countries like the United States, Great Britain, Germany, and Japan tend to dominate the transmission of media
throughout the world.
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How can mass communication affect the location of a workplace?
The availability of efficient telephone lines, fax machines, internet, video conferencing, etc. has made it possible for the
decentralization of the workplace in that people no longer have to all work in the same building or part of a city in order to
communicate. Hence, more people can work from their homes and other locations far from their customers, suppliers and
co-workers.
Mass communications reduces the advantage provided by the agglomerating tendency. As a result, businesses that are
related can now more easily locate at greater distances from each other.
Describe the economic importance of the quaternary sector.
Growth in the quaternary sector allows a region or a country that does not have a strong manufacturing sector to become
more developed without having to significantly increase its manufacturing activity. This is significant because the
development of high-tech manufacturing is expensive and takes many years. Hence, it is difficult for developing countries
to achieve this type of growth. However, increases in quaternary sector activity is much easier to achieve. For example,
Ireland is one country that has increased its level of development through an increase in quaternary activity.
A strong quaternary sector helps to maintain and increase the amount of high-tech manufacturing that occurs in a country.
Without the research and development of advanced products, countries like Japan and the United States would be unable to
maintain manufacturing industries that support high paying jobs, such as the automobile industry.
Examine factors that affect the growth of the quaternary sector.
i.
ii.
iii.
iv.
The level of education of the population of a country.
The amount of infrastructure available in a country.
The amount of money available to be invested by governments and industry in research and development of new
technologies.
Other
Relate the location of areas of environmental damage to areas of major industrialization.
According to the material on pages 237-239 of your text, it appears that areas of the world that have been most negatively
affected by environmental damage caused by manufacturing operations are the most industrialized regions. The best
example of this is Acid Rain damage. According to Figure 13.17 on page 238, the industrialized regions of northeastern
North America and Europe have been hardest hit. It also shows that newly industrializing regions such as East Asia
(Primarily China) are also showing some damage.
This section also illustrates that the industrialized regions of the world are the most responsible for contributing to other
major environmental problems such as GLOBAL WARMING and OZONE DEPLETION. Both of these originate from
the manufacturing of, or use of, manufactured products.
Solutions to these major environmental problems:
Reducing Acid Rain emissions:
i.
Filter sulfur from smokestacks of electrical power stations that operate on fossil fuels.
ii.
Use coal and oil that contains low-content sulfur in electrical generating stations that operate on fossil fuels
iii.
Reduce the use of electricity through a variety of conservation measures by individual citizens i.e. better insulation
for homes etc.
iv.
Any measure that reduces the use of automobiles or that reduces the amount of gasoline burned in those
automobiles. These measures will reduce the amount of nitrogen oxides emitted into the atmosphere.
v.
Etc.
Reducing CFC’s emissions that contribute to ozone depletion:
vi.
CFC’s have been discontinued for use in developed countries as a result of the Montreal Protocol. They must be
eliminated from use worldwide, by helping poorer countries substitute other compounds for CFC’s such as HFC’s.
vii.
Implement programs for the safe disposal of all existing refrigeration units that contain CFC’s. (i.e. The
government could offer a small fee for anyone who brings their old refrigerator or air conditioner in for safe
disposal).
viii.
Etc.
Reducing gases that contribute to GLOBAL WARMING:
ix.
Any measure that reduces the amount of electricity used from power plants that burn fossil fuels.
x.
A reduction in the amount of forests being destroyed each year and/or reforestation measures.
xi.
A reduction in the amount of cattle being raised in the world.
xii.
Etc.