Unformatted text preview: 2 Origins of Industry
In the modern world, industry means “the
manufacturing of goods in a factory.”
Industrial activities certainly existed before
the modern world – as cottage industry: Industry – Small scale.
– Home based (often family based). Origins of Industry
Distribution of Modern Industry
Problems of Modern Industry Cottage industry still exists
– but it’s of little economic
importance since the
Image source: Burke, James. 1985. The Day the Universe Changed. Boston: Little, Brown & Co.
1 3 The Industrial Revolution
Revolution is a misleading term – it was a
process, not a single event.
The revolution happened because of a coming
together of many social, economic, political and
The revolution begins in Great Britain around
1750 – why here? Why then? Diffusion of the Revolution:
By Industry 4 Iron and steel [more iron means more transportation,
which means more use for iron, which means more need
for mining, which means more need for transportation,
better engineering, etc.]
Textiles [new machines meant more cloth, which meant
more need for dyes and bleaches, which meant more and
better chemistry, which lead to new ways to preserve
Ceramics [new methods meant cheaper, better ceramics,
which meant individual plates and bowls, which improved
sanitation, which also lead to the development of
ceramic sewer pipes, toilets, etc.] – Changes in agriculture (new crops, new agricultural
practices, new agricultural machines).
– Changes in technology (especially the steam engine –
James Watt's improved model of 1769).
– Changes in culture (the end of the guilds, the rise of
capitalism, the English nonconformists). 5 Elements of the Revolution
James Watt’s steam engine
Watt’ Diffusion of the Revolution:
From the UK 6 The revolution spread from
Britain first to:
– Western Europe
– The United States
– Eastern Europe
– East Asia Canal over river The iron bridge at Coalbrookdale And now – the rest of the world? Source: Burke, James. 1985. The Day the Universe Changed. Boston: Little, Brown. 1 7 Industrial Regions of the World 8 North American Manufacturing 9 10 Eastern European Manufacturing
Manufacturing 11 New Industrial Regions 12 ASIA
– China is the world’s largest manufacturer of textiles, clothing, steel,
and many kinds of small appliances and toys.
– China’s assets include the world’s largest supply of low-cost labor,
and the world’s largest consumer market (at least potentially). East Asian
Manufacturing LATIN AMERICA
– Mexico and Brazil are the largest manufacturing centers in Latin
– Following a shift to more open markets, Latin America has become
very attractive to foreign-owned manufacturers. CENTRAL EUROPE
– Since the fall of Communism in the 1990s, Central European
countries (especially Poland, the Czech Republic, and Hungary) have
become important manufacturing centers.
– Labor costs are lower here than in Western Europe, yet very near to
Western European markets. In all three of these cases, note the importance of low cost
labor and outsourcing (“the new international division of
labor”). 2 13 Industrial Location Industrial Location: Situation 14 Proximity to Inputs (“raw materials”): In a primary economic activity – like
agriculture, fishing, forestry, or mining –
there isn't much location choice – you go
where the soil is good, where the gold is, etc. – If an industry's inputs are heavy, bulky, or fragile, then it may
make sense to locate near where those inputs come from.
– Examples: copper, steel, canned tomatoes
– Because what goes into the factory is heavier or bulkier than
what comes out, these are often called weight-reducing or bulkreducing industries. Proximity to Outputs (“markets”):
– If an industry's outputs are heavy, bulky, or fragile, then it may
make sense to locate near the market.
– Examples: beer, glass, concrete
– Because what comes out of the factory is heavier or bulkier than
what goes in, these are often called weight-gaining or bulkgaining industries.
– Other industries may also locate near markets:
Perishables But industry – manufacturing, construction,
any operation that modifies a product and
adds value – can try to choose the best
possible location based on rational economic
factors. 15 Changes in Manufacturing Location Transportation 16 Depending on what is being
manufactured, the cost and method of
transportation may also have an impact
on industrial location decisions.
Methods of transportation:
– Ship (very low cost, very slow, best
suited to long distance).
– Rail (low cost [usually], slow to
moderate speed [usually], suitable for
long or medium distances).
– Trucking (high cost [per ton], moderate
to high speed, extremely flexible,
suitable for long, medium or short
– Air (very high cost, very high speed,
suitable for medium or long distance).
– Pipeline (very low cost, but only suitable
for bulk liquids) “Just-in-Time Delivery” Source: http://www.steelbb.com/us/steelmaps/#Pipe&tube; http://midwest.chicagofedblogs.org/archives/2005/10/ Break of Bulk Points 17 Industrial Location: Site Site describes the physical (or fixed) characteristics of a location.
Different industries have different needs, and
different sites are best suited to different
Site factors include the availability and cost of:
– Break-of-bulk points (or “break-bulk points”)
– A break-of-bulk point is place where you transfer goods from
one kind of transport to another.
– Every time you go from one transportation method to
another – from rail to truck, for example – it takes time and
costs money. 18 Land (some industries need large areas)
Power (some industries need large amounts of power)
Labor (unskilled or skilled, depending on the industry)
Capital (money to start or expand a business) It isn’t always possible to find a perfect location –
so compromises have to be made.
Some industries today are footloose – they can
locate essentially anywhere. 3 19 Labor Intensive Industries Problems of Modern Industry
Stagnant demand: “The New International
Division of Labor”
Both unskilled & skilled
labor – but not necessarily
in the same places. – The best markets for manufactured goods are in the developed
world – but the population of the developed world isn't growing.
– Demand for many consumer goods is stagnant because markets are
saturated – for many goods there is a limit to how much or how
many consumers are willing to buy.
– “The Decline of Shoddy” – increased global competition means
that shoddy goods get replaced – but goods that don't break don't
need to be replaced, so demand stays low. – Unskilled ≅ “Fordist”
– Skilled ≅ “Post-Fordist” Transnational corporations
often focused on lower
cost labor in LDCs –
outsourcing. 20 Improved technology has increased demand for some
products, but decreased demand for others.
Increased capacity at the global scale means increased
competition – manufacturing is no longer concentrated
in just a few countries – all the developed and many
developing countries have advanced manufacturing
capabilities. Maquiladora Source: http://www.mexicomaquila.com/mi.htm Industrial Problems in
More Developed Countries 21 22 Distance from markets (remember the
“core and periphery” model).
Lack of infrastructure.
Dominance by transnational
corporations: Trading Blocs (yes, that’s spelled
– Trade within blocs is increased –
but trade with the outside world is
– Competition tends to take place
between blocs – rather than on a
country-by-country basis. Industrial Problems in
Less Developed Countries Industrial Problems in
Less Developed Countries – Dependence on more developed
countries (for supplies and markets).
– Concentration on low-skilled labor.
– The “race-to-the-bottom.” 23 Peripheral
– Remember –
before, ¾ of
countries. 4 ...
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