Industry and Development APHG
Just in time delivery
"Auto Alley," around interstates 65 and 75 took shape in the 1980's Assembly plants moved south as the auto industry restructured (less in Detroit) Parts suppliers still need to be relatively close to assembly for delivery "just-in-time" to manufacture the car **Auto alley makes automobiles a market oriented market oriented by population, not by cities Many parts are assembled in Mexico, then sent to parts suppliers farther north. refers specifically to auto-industry
Wallerstein's World System Theory
*political power is connected to economical power-- most influential in global politics made periphery dependent on the core Core Periphery Semiperiphery
How Government Policies Affect Development
-get involved in world markets -price commodities -affect whether core processes produce wealth -shape laws to affect production -enter international organizations that affect trade -focus foreign investment in certain places -support large-scale projects Corruption: having to pay someone every time you want to do something (for land, a license); lots of bribery that goes on; ALSO BIG IN MEXICO---> not good for investments/foreign capital is not interested in this..big turn off
3 top highest wages
1. Denmark 2. Germany 3. Belgium
Costs of Economic Development
1. Industrialization Export Processing Zones (EPZs), maquiladoras, and special economic zones (SEZs). 2. Tourism The wealth is concentrated in the hands of foreign companies and management, not the locals 3. Agriculture Desertification
Rostow's "Ladder of Development"
1. TRADITIONAL SOCIETY - subsistence farming 2. PRECONDITIONS FOR TAKE-OFF - elite group initiates economic innovations, leads to productivity. (horse drawn plow ---> machinery) 3. TAKE-OFF - rapid growth in a number of specific economic activities, technical advances. (solid industrial base w a few industries) 4. DRIVE TO MATURITY - Modern technology diffuses to a wide variety of industries, many work in industry (more diversified, variety of industries, more urban pop) 5. HIGH MASS CONSUMPTION - economy shifts from heavy industry to consumer goods & more people employed in services. (solid industrial base, mainly services, large middle class buying a lot of stuff)
TOP OIL COUNTRIES:
1. US (cuz of fracking) 2. Saudi Arabia 3. Russia (v dependent on oil... prices are low so its hurting their economy
3) When was the "Golden Age" (1945-1960s) of industrial capitalism?
After World War II, industrialization spread to new places such as Taiwan and South Korea, while much of the global north experienced the "Golden Age" of industrial capitalism with economic growth rates averaging around 4% per year, and wages and wealth increasing for many. This grew the size and wealth of the middle class in the United States, Western Europe and a recovered Japan.
who are the asian tigers and how did they become successful
Asian tigers: Hong Kong, Singapore, South Korea, Taiwan After WWI: South Korea had GDP of Congo; US gave them a lot of capital to develop industries→ got rich Singapore/Hong Kong: city states, lots of investments Taiwan: China had civil war between communists and nationalists, communists won, so all of the nationalists went to Taiwan and US aided them b/c they were anti-communist; us gave taiwan lots of money to help put towards their industries **ROSTOWS LADDER
1) Where did industrialization begin? Describe its diffusion
Began: England--mid nineteenth century Diffusion Pattern: Britain→ eastward across europe (1850s--1900s) → Russia (last to industrialize) Location factor: iron ore and coal
BREAK-OF-BULK ORIENTATION
Break-of -Bulk points are places where transfer is possible from one mode of transportation to another. Some industries are not market or raw materials-oriented. intermodal*** steel comes in on boats then is shipped to diff places via trucks break of bulk: factory is put right by the port/river
Semi periphery countries
China India Brazil China: uneven development; some have high level consumption; US using cheap labor in china (periphery) but china is buying up mines and stuff in Africa (core) India: over 50% still farming Both India and china put over 300 million people in a middle class but compared to their total population that's not enough to be considered everyone in high mass consumption
_____________ is a bulk-reducing product so the industry is located near raw materials
Copper smelting
5) What is deindustrialization? Why does it happen? What regions have been hit hard by the process?
Deindustrialization: the distribution of workers in each sector of employment shifts again. During deindustrialization there is an increase in workers in the tertiary sector (service sector) and a decrease in the percentage of the workforce in the secondary sector (manufacturing). Why: The reasons for this include the increase in labor costs in advanced industrial economies, because as wealth increases workers demand higher wages. With increased levels of education, many workers will also shift into services as the demand for both consumer and business services increases over time. Regions hit hard by the process: United States and Western Europe-- moved their products offshore due to cheaper costs/labor; ex: Rust Belt
Human Development Index (HDI):
Economic - GNI per capita (PPP) Social - expected and mean years of schooling Health - life expectancy
Gender and development
Education (UN focused on this; relates to TFR) Ownership rights (many women are farmers in LDCs; affects income and wealth ) Gender empowerment measure: measures women's role in society ex: participation in representative bodies) Gender inequality index: how equal things are economically Microfinance: v small loan to women who want to own a small business; low or no interest loans to women (India, Bangladesh, Africa)
WHERE DID INDUSTRY BEGIN & HOW DID IT DIFFUSE?
England: Availability of capital. Availability of specific resources (iron ore/coal). Workers (enclosure)-workers came from the transition during the agriculture revolution (which came before industrialization duhh) Diffused eastward to places with iron ore and coal deposits and stable governance The capital came from the colonies. They provided cheap raw materials and bought value-added finished goods back from England.
GDP vs GNI
GNI includes invested income GDP just total goods and services (not investment income)
The best measure of overall development in a country is
HDI
Hotelling's model
In Hotelling's beach model two ice cream vendors will start out spread apart on the beach, locations A and C, but will keep moving towards each other because the customers will be concentrated in the area between them and they won't want to miss out on any customers. Eventually they will be right next to each other near B.
2) How does industrialization affect the distribution of the labor force between the different economic sectors?
Industrialization increased national wealth, political power and global influence. When a country industrialized, the percentage of the population working in the primary sector decreased, while the percentage of the population in the secondary sector increased more workers were needed in the factories and less in agriculture
All of the following countries make up the four tigers except: South korea, taiwan, japan, Hong kong, singapore
Japan
Which of the following countries is NOT on the list of top oil producing countries? China, Japan, US, Mexico
Japan
Youth dependency ratios are more common in
LDCs
Two early industrialized countries
Liverpool and manchester
BENEFITS OF AGGLOMERATION
Local expertise in a specific industry (stealing employees, attracting talent, etc.) Transportation savings (all the machinery for that industry is made nearby) Access to specific services (hospitals require specific services like laboratories, x-rays, etc.)
Barriers to Economic Development
Low Levels of Social Welfare -Trafficking Foreign Debt - Structural adjustment loans Political Instability & Corruption Widespread Disease -Malaria
6) Where are services being "offshored" to, and why?
Manufacturing has been offshored to places such as China, Indonesia, Bangladesh, Honduras and Mexico. The location of offshored manufacturing depends on the shipping costs of the goods, and the labor needs of the production process. → Industrial Location Theory ESPECIALLY CALL CENTERS- Services not manufacturing Main places: Indonesia and India SPEAK ENGLISH DUE TO COLONIALISM
Migration in Mexico has increased since ______
NAFTA (the 1980s) --maquiladoras close to the US border
_____ is the largest steel producer in the U.S. "mini mills"
Nucor
Pros and cons of export processing zones
Pros: countries that use them save on labor, less hassle Cons: for people there they are working low wage jobs, sometimes jobs are dangerous
Rostow v Wallerstein
Rostow recommends:MDC giving investments/supplying capital to LDC→ created the world bank (MDCS should make loans in order to capitalize/inject money into LDC's industries to help the LDCs develop) Wallerstein recommends: emphasises dependency and neocolonialism; see if the LDCs can develop on their own; give them their stuff back and just watch and see
Issues with russia's economy
Russia: they have oil but not a diversified economy, haven't increased their wealth since WWII
4) Name the Asian Tigers/Dragons. What are they known for?
S. Korea, Taiwan, Singapore and Hong Kong (industrialized during the 1960s-1990s)-- Rostow's model The "Tigers" first specialized in exporting manufactured goods which created wealth; the needed capital that allowed their economies to "take off."
Deindustrialization has had a dramatic impact on which of the following regions?
The Great Lakes
Dependency Theory
The political and economic relationships between countries and regions of the world control and limit the economic development possibilities of poorer areas. *takes money to make money
Foreign Debt Obligations
Total interest payments compared to the export of goods and services. One thing that comes with getting loans is having to open up to free trade and tariffs; not an even trade relationship...many LDCs ended up going into debt (World bank ended up forgetting a lot about the debt)
________________take advantage of geographic differences in wages, labor laws, environmental regulations, taxes and the distribution of natural resources by locating various aspects of their production in different countries.
Transnational corporations
Who created the HDI
UN
The author of the World-Systems Theory was
Wallerstein
The clustering of financial firms on Wall Street, in New York, is an example of
agglomeration
A country that may be considered semi-periphery would be
bangladesh
WHY ARE THERE AGGLOMERATION ECONOMIES?
bunch of the same companies in the same place (ex: Silicon valley--California---Agglomeration of high tech start ups) developed cuz of Stanford-- hub for startups (especially the tech industry) Benefits: learn from each other, steal workers (lots of experts in one place)
Outsourcing:
companies obtaining goods or services from an outside source (another company). This can be inside or outside the United States.
Regions that have high levels of socio-economic prosperity and have been fully industrialized are known as
core
profit maximization equation
cost minimization+ increased profit (location in relation to customer/other factors)
All of the following are important factors of industrial location except: raw materials, labor culture of a region, transportation, infrastructure
culture of region
The outsourcing and offshoring of tertiary jobs is evidenced by
customer service call centers in India
According to Alfred Weber, when too many businesses locate in one area, labor and transportation costs increase, which often leads to
deglommeration
Microfinance is a ______ strategy
development
Why Eco Lodging/ecotourism
do it to reduce their carbon footprint or make sure the money is staying in the community (and not a large hotel change that will most likely bring the money back to the US/europe and not keep it in that certain country)
NGOS
do stuff closer to the people (ex: microfinance or teaching how to farm more productively or train entrepreneurs); focused on development issues Bill and Melinda Gates foundation=largest NGO
STEEL INDUSTRY IN THE UNITED STATES
early industrial regions: cities near the great lakes or port cities Pittsburg: steel city (had coal for power, iron ore for steel, and transportation routes/ports)
A common criticism of Rostow's modernization theory is that it
fails to recognize that rich nations often block the development of poor countries
An industry that selects its location based on something besides transportation costs is known as
footloose industry
The industrial revolution began:
in England in the 18th century
Offshoring:
industry or services moving part or all of production or operations outside of the United States. Sometimes outsourced too, at the same time, to a supplier (different company).
_____ transportation is CHEAPEST
land (includes pipelines but is only used for liquid--not very pop)
deglommeration:
leaving to go somewhere else because having too many people in one place can increase the cost making wages and stuff too expensive → results in deglommeration
Things go into the HDI:
life expectancy at birth (HEALTH), mean vs expected years of schooling (EDUCATION), and GNI per capita (LIVING STANDARDS)
Don't make steel that much in pittsburgh anymore because
location factors have changed
the primary consideration for locating a business is the.... in the locational interdependence theory
location of competitors and the market
Areas Threatened by Desertification
mainly northern africa
What do mini mills do
mini mills take recycled scrap and turn it into steel... don't use coal....they use natural gas
Basic:
money comes from outside the region ex: GE aircraft engines, citrus farming, gold mining, truck transmissions, tourism, National TV networks
Non-basic:
money is recirculated within there region ex: mowing lawns in IH, Busken's, milk, auto repair, branch banks
Basic jobs have a ___________ ______of 2-5 non-basic jobs
multiplier effect
Four major industrial regions have developed. They are all located in which hemisphere?
northern
post fortis:
parts come from everywhere, factories are smaller, just in time parts is happening
life expectancy info:
people in afghanistan live to only 45ish in us women live longer than men Averages in child and infant mortality rates and maternity mortality rates into life expectancy (and other early death rates)→ drag numbers down in LDCs
The best measure of how industrialized a country's economy is would be:
per capita GNI
The Industrial Revolution affected the economies of industrializing countries by causing the
primary sector to shrink
ORIGINS OF INDUSTRIALIZATION
proximity of Industrial cities in England to iron ore and coal deposits. Coal production provided the energy to turn Iron into usable material for industrialization (steel). *ports developed close to coal/iron fields
Impact of on time delivery
puts factory close to manufacturer
The term that refers to the collection, processing, and manipulation of information and capital is
quaternary
What are "Right to Work" laws?
right to work says you don't HAVE to join a union if you work somewhere
One reason many companies have located production in the southern United States during the past 30 years is to take advantage of
right-to-work laws
most of eastern Europe is______; don't have a lot of money b/c of communism after WWII
semi-periphery
Brandt Line:
shows the disparity between north and south
Agglomeration example
silicon valley and orlando (theme parks)
Microloans -
small loans made (mostly to women) for starting a small business, usually by development agencies like Grameen Bank in India or Kiva.
Which regions of the world are the fastest growing industrial regions?
south and east asia
The idea that resources should be conserved so that people living today can meet their needs without limiting the ability of future generations to do the same is called:
sustainable development
The development of a manufacturing sector takes place in which stage of Rostow's development model:
take off
_____ were the first thing to go to Maquiladoras in mexico---most of their cost comes from labor, not transportation
textiles
Comparative Advantage-
the ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity **Rostow!!!!!!!! He believed that industrialization and trade is how US and europe got rich and that's how all the other countries can get rich too!!! :-))
Evidence for the validity of Rostow's ladder of development model can best be found in
the asian tigers
Just in time delivery mainly applies to
the auto industry
The existence of a north/south development gap globally was first shown by
the brandt line
The location of Europe's primary industrial regions still reflects
the coal mining regions and the spatial diffusion of the industrial revolution
Alfred Weber developed a model for the location of manufacturing establishments called:
the least cost theory
One early consequence of the North American Free Trade Agreement (NAFTA) was the promotion of
the maquiladora district
Niger's economy is mostly limited to:
the primary sector
****Development is
the process of improving the material conditions of people through diffusion of knowledge and technology.
BULK-GAINING PRODUCTS
transportation costs are minimized; The finished product is heavier than the raw materials; MARKET ORIENTED
"FOOTLOOSE INDUSTRIES"
transportation is not a big part of their overall cost EX tshirts: easy/cheap to transport and light , Shoes, electronics
two location factors in eastern europe:
transportation routes (distance from the Baltic sea) and raw materials distance decay**
Weber's model discusses ____ while hotelling's model is about _____
transportation; the customers
Last decade GDP has ____ in MDCs and only ___ in LDCs
tripled; doubled
intermodal:
using more than one type of transportation
"Islands of development"--
west coast is the most developed in Africa; these are former colonies; govt supports that by supporting infrastructure and bringing in foreign capital
A spatial analysis of global labor costs reveals the highest wages globally are found in which of the following regions?
western europe
ARE SOME INDUSTRIES STILL RAW-MATERIALS ORIENTED?
yes-- they are called bulk reducing industries --if a product loses weight during production (factory is close to raw materials to save $$) Ex: steel production from iron ore
