Transcript Y10UB4_3 Siting industry 25_6 JanPP

What is informal employment
Why does it happen?
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What is informal employment and why does it
happen?
• The official definition: The informal sector is largely made up
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of jobs over which there is little or no official control. It
includes jobs such as child minding, domestic cleaning and
bar tending.
In HICs, this is the main area for the informal economy.
Previously, in the UK for example, this also included
something called the ‘Black economy’ or the ‘Lump’.
A lot of building workers were paid by the day in cash and
did not pay tax nor did they show up as being employed – in
fact many claimed unemployment pay and worked illegally.
Because of its illegal nature, pay rates were much lower
than regular workers and so building contractors were only
to happy to use them.
Another group were illegal immigrants who worked in sweat
shops for long hours, poor and often unsafe conditions and
very low pay.
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What is informal employment and why does it
happen?
• But the minimum wage and the demand that
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building contractors withheld money, even from self
employed people, to off-set tax has resolved many
of these issues.
Officially, someone cleaning houses for a few hours
a week or doing a bit of baby sitting should be
registered as an employee but small infrequent jobs
of work are largely disregarded by officialdom.
However, they do form part of the informal
economy.
In MICs and LICs the informal sector is far less
controlled and involves a much greater variety of
people and jobs.
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What is informal employment and why does it
happen?
• In LICs/MICs most street workers do not appear on any
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statistics - these include street vendors, shoeshine boys,
car washers, litter pickers, as well as employees of back
street workshops who work long hours in dangerous
conditions.
In some countries, children are sold by their parents to
become ‘apprentices’ and so are virtual
slaves until they reach adulthood and as
it is for most part illegal to employ young
children, they do not appear in any
statistics either.
Venezuela
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What is informal employment? Why does it happen?
• For example in India it has been estimated that the informal
economy was responsible for 60% of net domestic product,
68% of income, 60 % of savings, 31% of agricultural exports
and even 41% of manufactured exports! Some estimates
say that as many as 80% of the population earn most of
their money through informal means.
In another example, Nigeria, it is
thought that 40-45% of the GDP
comes from the informal economy,
even though Nigeria is a resourcerich country.
India street market
Guatemala
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Siting factories
Why is industry situated where it is?
• Factories might be built by an individual, a private
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firm, a large national company or a TNC
(transnational corporation – can you name one?)
Before it can be built, decisions have to be made
about what is the best site for its location.
It is unlikely that any one site will have ALL the best
possible attributes
But certain factors are more important than others,
depending on the nature of what the factory will
produce. The bottom line will be, on which site will
we make the most profit?
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Factors Affecting Location of Industry
Location/Site
Transport
Raw materials
Environment
Market
Energy
Capital
Government/
EU
Labour
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THESE ARE SO IMPORTANT. DON’T CLICK BEYOND THIS
SLIDE UNTIL YOU CAN RECITE THESE WORDS. Learn
them in THREE BLOCKS OF FOUR WORDS!
RAW
MATERIALS
ENERGY
LOCATION/SITE
LABOUR
CAPITAL
MARKETS
GOVERNMENT
POLICY
ENVIRONMENT
TRANSPORT
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Physical factors
• Raw materials – the bulkier and
heavier they are to transport, the
more like the factory will be close
to the raw materials.
• Power/ energy – in times of water
and steam power the location
near fast moving water or a coal
mine would have been important
– now electricity is nearly
everywhere
In the 19th
century it
was the
physical
factors
that were
most
important
Why
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Location / Site
• The Land on the site is crucial to industry, new
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industries have certain demands:
- flat land – cheap to build on
- room for expansion
- access to excellent communications such
as dual carriageway or railway
Location
- near to market
- large population of skilled workers
- near to a Port?
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HEAVY INDUSTRY IS TRADITIONAL INDUSTRY THAT GREW IN THE
UK DURING THE 19TH CENTURY. IT’S LOCATION IS INFLUENCED BY
THE FIRST FOUR FACTORS. YOU WILL HAVE STUDIED THE
LOCATION OF IRON AND STEEL.
RAW
MATERIALS
ENERGY
NATURAL
ROUTES
SITE AND LAND
Heavy Industry will locate near raw
materials as they are heavy to transport.
Traditional heavy industry relied on coal as
a source of energy. Many industries located
on coalfields.
Natural routes leading to you factory would
help. Flat valley floors for railways and
deep water ports
This is a key factor for all industry. Flat land
is often needed, ideally with room for
expansion. Low quality farmland can be
cheap but increasingly “greenfield” sites
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are more expensive than “brownfield” sites.
Push and Pull Factors
• A PUSH factor is a factor which causes an
industry to move out of an area.
• A PULL factor is a factor that attracts an
industry into an area.
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The PUSH of Inner City Locations
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Cramped sites with no room for expansion
Old out-dated factories
Congested roads in city areas
Higher rates/mortgages for buildings near
city centres and greater competition for
land
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The PULL of an Edge-of-Town Location
• Modern factories often specially built in advance
• Good communications with a dual
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carriageway/motorway nearby
Lots of space for expansion for future
developments and car parking
Cheaper sites as land values decrease from the
CBD (Central Business District – town centre)
Many areas are specially selected by the
Government to receive grants and financial aid
Near skilled and mainly female workforce in
modern private housing estates and commuter
villages
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Human and Economic Factors
• Labour – the right number and of suitable
quality in terms of skills.
• Capital to invest
• Market – you need somewhere to sell the
goods – the closer to the market the less the
transport costs –
• One reason why Sony decided to make TVs
in the UK was because it gave them easy
access to the whole of the EU – 350 million
and most of them well off!
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Transport
• Sea
Necessary for an industry relying on imports of raw
materials or the international export of goods.
e.g. The Car Industry – Nissan in Sutherland
• Air
Used mostly by ‘light’ industries producing
expensive products or industries that rely on fast
delivery.
e.g. Parcel Force or IBM
• Road
Most commonly used in Tertiary industry
delivering products throughout the country to
markets.
e.g. Supermarket Giants, Flowers from Europe
• Rail
Transport of finished products. This form of
transport has become more popular again
recently as Environmental Issues have become
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important. e.g. Tesco
Government Incentives
• The kind of help governments offer companies
to set up in high unemployment areas include:
 Grants, which is money given to the company
 Loans, money given to the company that has to be
paid back over time
 Training, so that people will have the skills they need
in your industry
 Infrastructure, improvements in e.g. roads, electricity
supply, telecommunications and the water supply
 Constructing buildings that the companies can move
into.
• Government aid is provided by the local
authorities, the British Government and the
European Union.
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Environment
• Industry is concerned with image
• New industries are well landscaped and
managed, this encourages skilled workers
and clients to see the industry as
professional and prosperous.
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It is human and economic factors that attract
modern industry
• Modern industries tend to be light and hi-tech
in nature and so do not need lots of space or
to be near the source of raw materials.
• However good transport links, being close to
the market and where there is government
assistance is much more important!!
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LIGHT INDUSTRY IS MODERN INDUSTRY THAT HAS GROWN IN THE
UK DURING THE 20TH CENTURY. IT’S LOCATION IS MOSTLY
INFLUENCED BY THE LAST eight FACTORS.
LABOUR
Industry may locate for quality of labour
(near a University) or quantity (near a
large town)
CAPITAL
Early industry needed to gain funding from
wealthy entrepreneurs. Banks now fulfill
this role.
MARKET
Access to a market is now very important.
This may cause an industry to locate in a
particular area or even country.
TRANSPORT
Nearness to motorway junctions is now
often a preferred site. Industry may locate
near market to reduce transport costs or at
a port so that imports can go directly into
the factory rather than incur costs of a
second form of transport.
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GOVERNMENT
POLICY
IMPROVED
TECHNOLOGY
ENVIRONMENT
Governments may offer incentives to
industries to encourage them to locate in
areas that need extra jobs etc. Incentives
include tax reductions and offering a grant
for each job created.
Electronic communication means that
locating near customers etc may be less
important. Telephones, fax and the internet
can be used instead.
Locating in an area that has good facilities
may attract good staff. People will be
reluctant to move for a job if the local area
offers little to do in leisure time.
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Footloose Industries
• Light industries are termed "footloose" they are
not tied to the location of raw materials as heavy
industries are.
• “Footloose and fancy free !!” – NO TIES !!
• All these industries need are excellent
communications, access to skilled workers, being
close to a market and usually Government
incentives are provided.
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Governments can offer
grants to companies
locating in declining
areas. For example
Samsung was given £58
million for locating in
Teeside.
Invest in transport
links that may make
the area more
attractive for
footloose industries
Other incentives
governments can offer
include:- a grant for every
job created, tax incentives
in the first year of
business and free
premises for 12 months.
Governments may set up
Urban Development
Corporations or Enterprize
Zones. For example the
Teeside UDC reclaimed old
industrial land and prepared
it for new businesses
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Industrial Decline
• As the type of industry and its location
changed many problems were created in
the older industrial areas.
Factories Close
Reduction in Market
for Goods & Services
Unemployment Rises
Factories pulled down
Increase in derelict (waste) land
People move away
Less income and money
to spend in community25
Some new development
Old Railway Sidings - Unused
Derelict Land
Coastal Location
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Features of Industrial Decline
• Choose the correct word from the brackets !!
1. As industry decline in an area unemployment (increases /
decreases)
2. Many small supply industries are forced to (open up /
close down) when a large factory closes
3. People have (more / less money to spend when jobs are
lost
4. Derelict, waste ground begins to (disappear / appear)
5. Some people (move away / stay) hoping to find new jobs
6. The number of local shops and services (increases /
decreases)
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Industrial Decline
• Economic effects - to do with money - unemployed
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people have less money to spend, local shops and pubs
take in less money, the local government gets less taxes
and therefore has less money to spend, services such as
schools and post offices are cut back, more people leave
and so the area is badly run down.
Social effects - to do with people - e.g. unemployment,
low standards of living, family break-ups, crime,
vandalism and depression. As many younger people will
move away to look for work the area gets an ageing
population.
Environmental effects - to do with the surroundings e.g. empty factories and houses, gap sites (where
buildings used to be), waste ground and dirty buildings.
One positive effect of the old polluting factories closing
down is there is less air and river pollution now.
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Regional Differences within the U.K.
• Areas which have depended on the old, heavy industries
(coal mining and iron and steel) have low wages, high
unemployment and population decline. Areas like these
include parts of the North-East of England, Central Scotland
and South Wales.
Poor North
Thriving Rich South
• Areas which have modern, light industries have low
unemployment, high wages and population increase. Areas
like these include parts of south-east England and East
Anglia.
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Factors Attracting New
Industries
Why is Nissan sited in NE
England?
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Map of NE England
NE
England
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Recent Industrial Changes
• Recently new employment has been provided by
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overseas companies, as shown on the map below.
New employment in North East England
These developments have
further diversified the types of
manufacturing industry (motor,
electronics, off-shore
supplies), and have provided
more opportunity for office and
retail work. The region has
been particularly successful in
attracting call centres, which
employ more than 30,000
people.
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Reasons for Growth
(Physical and Human)
• Availability of Greenfield sites
• Availability of Brownfield sites (previously used industrial
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area)
These sites provide room for expansion.
Deepwater Ports are available for the IMPORT of raw
materials and for the EXPORT of finished products- in
particular to EU countries.
Good road infrastructure A1 (motorway) access from
North/South UK
Airports for both business travel and movement of products close proximity to Newcastle and Stockton on Tees Airports
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Part 2 - Reasons for Growth
• Large supply of skilled labour available from Newcastle,
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Stockton on Tees and Middlesborough after the decline
of traditional engineering industries.
Training opportunities available - local colleges and
universities
Relatively low ways in comparison to other European
developed nations
Few working constrictions in UK.
Being an assisted government area, local and national
incentives and grants were available.
English language a benefit in EU/world market place
Multiplier effect for new supplier/component companies
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Identifying Industrial Location Factors from
maps and photos OF THE Nissan site
This is the Nissan
plant, attracted to the
NE by government
grants and a strong
tradition of
engineering in the
region.
Additional flat
land is
available for
expansion.
The A 19 offers a
major north-south
transport route for the
shipping in of
components needed
to build the cars and
the export of the
finished product to a
European market.
The site is close
to the major cities
of Newcastle an
Sunderland, a
handy and skilled
workforce.
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Identifying Industrial Location Factors from
maps and photos
The Nissan site
was built on a
disused airfield,
close to farming
areas
The Nissan plant
occupies a site of
over 2 miles2
The room for
expansion is clear
here
A test
track –
fancy a
drive?
This major
transport
axis is good
for workers
and the
movement of
finished
products and
components.
The river
Wear offers
another
transport
option
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Location
• NMUK is located in the
Washington area of Sunderland,
in a triangular area of land
between the A19, the A1231
Sunderland Highway, and
Washington Road.
• The factory is adjacent to the
Nissan Distribution Centre (NDS),
and a number of synchronous
suppliers. The landscaped NMUK
site incorporates conservation
areas, such as ponds, lakes and
woodland.
• The site, once the Sunderland Airfield, was close to large
ports on the Tyne and Tees, within easy driving distance of
the international Newcastle Airport, and close to major
trunk roads such as the A1 and A19.
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How the government assisted..
• In February 1984, Nissan and the British Government
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signed an agreement to build a car plant in the UK.
As an incentive, the land was offered to Nissan at
agricultural prices; around £1,800 per acre.
The North East region of England had recently
undergone a period of industrial decline, with the closure
of most of the shipyards on the Tyne and Wear, and the
closure of many coal mines on the once prosperous
Durham coalfield. The high unemployment this caused
meant Nissan had a large, eager, manufacturing-skilled
workforce to drawn upon.
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Why did Nissan want to come to Washington?
• NISSAN – A Japanese TNC
• Wanted a foothold in Europe (access to European
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market without paying import taxes).
Located in Washington (Sunderland) because:-
 Large site for building (an old airfield) that was flat and
had room for expansion.
 The NE of England has a history of engineering skills
from ship building that could easily be modified and staff
trained to build cars the Nissan way.
 Nearness of port (Tees) for import and export.
• Globalisation helps companies avoid trade
restrictions. eg Nissan gained access to the EU
market by locating in Sunderland.
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Recent developments
• April 2009
• Government scrappage schemes operating
in Europe, and planned for the UK from later
this month, have prompted Nissan to recruit
150 manufacturing staff on fixed-term
contracts from June for its Sunderland plant
in north east England.
• Nissan is expecting additional, short-term
customer demand for the UK-made Micra,
Note and Qashqai models as a result of the
scrappage schemes.
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Recent developments
• Tuesday, 21 July 2009
• Nissan has announced plans to build a plant for the
production of its advanced lithium-ion batteries in Europe,
the first significant step towards producing batteries for its
Zero Emission Mobility Program in Europe.
• As part of the newly established Low Carbon Economic
Area, Government intends to establish a new training centre,
specialising in low carbon automotive technologies; a
technology park and an open access test track for low
carbon vehicles.
• Research takes places at the Centre for Advanced Electrical
Drives at Newcastle University and Sunderland University’s
Institute for Automotive and Manufacturing Advanced
Practise (AMAP) provides design consultancy and state-ofthe-art training for both new entrants and experienced
engineers.
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Recent developments
• Friday, 18 December 2009
• Regional Development Agency One North East and car
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manufacturer Nissan Motor Co., today entered the next
phase of their partnership on the development of zero
emission mobility in North East England.
Under the agreement, One North East will install at least 619
publicly available, ‘future-proof’ charging points by January 1,
2011, which will support both 3kW and 7kW charges and
twelve 50kW ‘rapid-charging’ stations. Electricity at the 619
charging points will be provided free of charge until March
31, 2012.
Nissan has agreed to supply Nissan LEAF electric vehicles
to the region in early 2011 and to place priority on requests
for electric vehicles in the UK from North East England.
Nissan LEAF is the world’s first affordable electric vehicle.
Designed specifically for a lithium-ion battery-powered
chassis, the medium-size hatchback comfortably seats five
adults and has a range of more than 160km (100 miles) to
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satisfy real-world consumer requirements.