Transcript Unit 6: Industrialization and Development

Warm-Up
• What is industrialization?
• What are 3 effects of the industrial
revolution?
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Economic sector is
dividing the
country’s
population based
upon the economic
area in which that
population is
employed.
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Primary
Sector
Secondary
Sector
Tertiary
Sector
Quaternary
Sector
Quinary
Sector
• Jobs that revolve around getting raw materials from the Earth.
• Ex.
• Jobs that deal with processing the raw materials into a finished product of greater value.
• Ex.
• Services that move, sell, or trade the products made in the secondary sector.
• Ex.
• Jobs that involve information creation and transfer.
• Ex.
• Jobs that require the highest level of decision making.
• Ex.
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Economic sectors can also be broken down into formal
vs informal
Formal Market: Ecuador
Informal Market: Ecuador
Not reported to the government, no taxes paid.
Formal Market: Brazil
Informal Market: Brazil
Afghanistan
GDP - composition, by sector of origin:
agriculture: 20%
industry: 25.6%
services: 54.4%
Australia
Labor force - by occupation:
agriculture: 3.6%
industry: 21.1%
services: 75% (2009 est.)
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Primary Sector
jobs
Specific examples
Your Resource
What is it used
for?
Secondary Sector
jobs
Specific examples
Where is it
found?
How is it
extracted?
Tertiary Sector
jobs
Specific examples
Quaternary
Sector jobs
Specific examples
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Primary
Sector
Your
Resource
What is it
used for?
Secondary
Sector
Tertiary
Sector
Quaternary
Sector
Direct jobs
Specific
examples
Direct jobs
Specific
examples
Related Jobs
(include
resource)
Direct jobs
Specific
examples
Direct jobs
Specific
examples
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Resources Available
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•
•
•
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•
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•
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•
Dairy
Corn
Iron Ore
Wheat
Corn
Petroleum
Livestock (cattle)
Softwood
Coffee
Salmon
Sugar cane
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Industrialization is the
process by which economic
activities evolved from
producing primary goods to
factories that mass-produce
goods.
Cottage Industries are homebased manufacturers where
people manufacture tools and
agriculture equipment for their
own communities.
The Industrial Revolution was
the process of technological
change that started in the late
1700s that transformed how
goods were produced and
obtained by the people.
Began in England:
*machines replaced human labor
*coal was the leading energy source
*improved transportation and infrastructure
Brought on the commodification of labor
Great Britain
Diffusion of the Industrial
Revolution
Belgium/France (late 1700s)
The United States (1790s)
Most of Europe came late to the party
because of revolution and strife (ie. French
Revolution, Napoleonic Wars)
Italy, Netherlands,
Russia, Sweden
(late 1800s)
The United States entered the IR later
than Belgium and France but
expanded more rapidly.
The Middle East and Africa
entered the IR because of WWI
and the need for oil.
Asia, Middle East and Africa
(Mid 20th Century)
Infrastructure includes services
that support economic
activities. It provides for
transportation,
communication, education,
and other external needs of a
company.
Four Primary Industrial Zones
NIC’s – New Industrial Countries
Northeastern
US & South
Canada
Western
Russia &
Ukraine
Central &
Western
Europe
East Asia (4
Tigers) &
Japan, China
The Rust Belt
Deindustrialization: industrial facilities leave an area, taking the economic base with them
New International Division of Labor –
Breaks up the manufacturing process
by having various pieces of a product
made in various countries and then
assembling the pieces in another
country
Southeast
Asia
Northern
Africa
Secondary
Industrial
Regions
Mexico
Brazil
Alfred Weber’s Least Cost
Theory is a theory that
explains the location of
industries based on where
cost are the least.
Assumptions of his theory
• UNIFORMITY - An area is completely uniform
physically, politically, culturally, & technologically
• ONE PRODUCT/MARKET - Manufacturing involves
a single product to be shipped to a single market
whose location is known
• RAW MATERIALS FROM MULTIPLE LOCATIONS Inputs involve raw materials from more than one
known source location.
• INFINITE /IMMOBILE LABOR - Labor is infinitely
available but immobile in location
• FIXED TRANSPORTATION ROUTES Transportation routes are not fixed but connect
origin & destination by the shortest path; and
transport costs directly reflect the weight of items
shipped & the distance they are moved.
Transportation: the most important cost - where
cost to transport materials and product is lowest
Labor: high labor cost reduce profit – where there is
a supply of cheap, non-union labor is best
Agglomeration: advantages & savings made when
industries clump together for mutual advantage
Deglomeration: “unclumping” of factories because
of negative effects & higher costs associated with
industrial overcrowding
Bulk Gaining –
Bulk Losing –
add weight or bulk
during manufacturing
process
remove weight or
bulk during the
production process
Bulk Reducing
Heavier input, shorter
distance to plant
• Input
Factory
(Material Orientation)
Lighter output, longer
distance to market,
• Input
Factory
Market
Market
Lighter input, longer distance to plant.
Bulk Gaining
(Market Orientation)
Heavier output,
shorter distance to market
Location Triangle
The location triangle is used to determine the
best place to locate a manufacturing plant based
on Weber’s Model.
Resource 2
Market
Resource1
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Exceptions to the rule
• Footloose industries
– Not restricted in where they can locate
– Maintain the same cost of transportation and
production
• Substitution principle
– Reducing the cost of labor even though an increase in
transportation will follow
• Agglomeration
– Industries clumping together in same space to share
benefits and costs of region
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Related concepts
• Locational Interdependence – Industries
choose their locations based on where their
competitors are.
– Ex.
• Deglomeration – the unclumping of factories
because of the negative effects and higher
costs associated with industrial overcrowding
– Ex.
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Related concepts
• High-tech corridor and Technopoles – regions
where technology and computer industries
agglomerate
– Ex.
• Backwash effect – Negative effects that
happen when other areas suffer out migration
of talented people to Technopoles
– Ex.
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Rowstow’s Stages of Development
Development
• Development – Process of improving material
condition of people through technology &
knowledge
• Liberal development theory – Development is
a process through which all countries can
move
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Less Developed Countries are those on the economically
poorer side of the spectrum. More Developed Countries
are on the wealthier side of the development spectrum.
Models of Economic Development
Wallerstein’s World System Analysis
1. Core: High Income
High use of technology
High % of tertiary activities
High levels of Education by the
majority of the population
OECD countries G8
2. Semi-Periphery: used to be
peripheral states
Increased economic development
BRICS
3. Periphery: Low Income
Low use of technology
High % of primary activities
Low levels of education by the majority
of the population
How MDCs and LDCs Differ:
GDP
Types of Jobs
• $20,000 in
MDC
• $1000 in LDC
• MDC –
Fewer
Industrial
Jobs
• LDC – More
Industrial
Jobs
Consumer
Goods
• MDCs can
afford
Consumer
goods and
have more
access to
them.
Economic development is often
accompanied by social development.
Development Gap is the
widening difference between
development levels in MDCs
and LDCs.
Dependency Theory argues that
LDCs are locked into a cycle of
underdevelopment by the
global economic system that
supports unequal structure.
Core-periphery model states that the world’s countries are divided
into three groups: core, periphery, and semi-periphery.
Looks at the world
as a capitalistic
system of
interlocking states
connected through
competition.
BRICS: Brazil, Russia, India, China
South Africa added in 2010
G8: Top State economies
Canada, France, Germany, Italy, U.K., U.S.(Core)
Mexico recently admitted (semi-periphery)
BRICS: Semi-Peripheral States
Rowstow’s Stages of
Development seeks to explain
and predict countries
pattern’s of economic
development by explaining
five stages which all countries
move through as they
improve their economic
development.
Models of Development
Rostow: International Trade Approach
International Trade Approach
Developmentalism
• Predicts that all countries will eventually reach the highest
level of development (Rostow follows developmentalism)
– Criticism: It is not an equal opportunity system, core countries have
advantages that peripheral countries do not.
Based on
European
model of
development.
Criticisms
Does not
account for
inequities in
resources.
Considers
each country
an
independent
agent .
Warm-Up
• Which model of development do you believe
is mor accurate (Wallerstien or Rostow).
Explain your response!
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How is Development Measured?
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Categorizing Development
Development
Categorizing Development
• Geographers break down levels of
development into 1st-5th world countries
1st World Countries
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•
•
Service-Based Economy
Free Market
High Productivity
High Standard of living
1st World Countries = Blue
2nd World Countries
• Hard-Line Communist
Countries
• Centrally planned
economies
3rd World Countries
• Countries with economies based on Primary
activities
• Ex. Niger, Haiti
4th and 5th World Countries
• 4th World –
Third-world countries
who have suffered a
financial crisis and no
longer have a functioning
economy
Afghanistan
• 5th WorldThird world country which
lacks BOTH a functioning
government and economy
Somalia
Women and Development
• Women are paid less for equal work in MDCs
and LDCs
• Women work more hours than men in almost
all countries
Women and Development
• Gender-Related Development Index (GDI)- Evaluates gender
equality by comparing
–
–
–
–
Per capita income
School enrollment
Literacy
Life expectancy
Women and Development
• Gender Empowerment Measurement (GEM) evaluated
geneder equality by comparing
– Per capita income
– Types of jobs held by women (technical/administrative vs. labor or
basic jobs)
Natural Resources and Development
• Natural resources have a major impact on the
development of a region
Dubai
Natural Resources and Development
• Core-countries use natural resources more rapidly that
peripheral countries
• Core-countries are often dependent upon peripheral
countries for their natural resources
CO2
Emission
Sustainable Development
• Emphasis on conservation of resources for future
generations
• Requires development of renewable energy sources
How to Measure Development
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Standard of Living
• Measurement of Life Enjoyment which considers:
–
–
–
–
Basic Needs being met
Access to Technology
Education
Expendable income
GDP per Capita (per head)
• Total number of goods and services produced by a country
divided by the total population
GDP Per Capita?
• What is the problem with using the GDP
per capita for predicting standard of
living within a country?
GINI Coefficient
• Measures the income disparity between the
wealthiest and the poorest in a country (100 is
the highest and worst score)
Human Development Index
• Developed to gain a predictor of standard of living by
evaluating both the productivity of a country and social
factors
– Economic Factors: GDP per Capita
– Social Factors: Literacy Rate, Level of Education, Life
Expectancy
– Score of 1 is the Highest and Best Score
Human Development Index
Human Development Index
• Can you think of any other factors the
Human Development Index should
consider when ranking standard of
living?
Physical Quality of Life Index
• Also developed to be a predictor of standard of living
by looking at
– Literacy Rate
– Life Expectancy
– Infant Mortality Rate
Physical Quality of Life Index
• Can you think of any other factors the Physical
Quality of Life Index should consider when
ranking standard of living? Do you see any
problems with it’s measurement?
HOW TO INCREASE DEVELOPMENT
International Trade
• Idea: countries can increase their development by
trading with other countries
• Major Organizations: (WTO) World Trade
Organization
World Trade Organization
• Goals:
– Reduce barriers to international trade by getting rid of
trade restrictions such as tariffs
– Allow for easier movement of money between countries
– Enforce trade agreements (countries can file a complaint
with the WTO if another country violated a trade
agreement
Foreign Direct Investment
• Idea: Give countries loans, to complete development
projects
• Major Organizations: World Bank and (IMF)
International Monetary Fund
World Bank
• Provides loans to countries to complete specific development
projects such as strengthening infrastructure, financial
institutions, transportation modes, and service projects
World Bank Development Timeline
International Monetary Fund
• Gives loans to countries who are financially insecure
to help stabilize their economy. These loans do not
have a specific project specified, the country can
choose how to use the loan.
Foreign Development Aid
• Aid is not a loan, but a
payment of money to
help them complete
development goals
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Globalization: The increasing
economic, cultural,
demographic, political, and
environmental
interdependence of different
places around the world.
International Trade : Pushing
for a country to identify its
unique set of strengths in the
world and to channel
investments toward building
on those strengths
Comparative Advantage When one region is relatively
more efficient at producing a
particular product compared
with other regions.
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Multinational Corporations
(MNC): Business with
headquarters in one country
(MDC) and production
facilities in another countries
(LDC)
New International Division of
Labor: Breaks up the
manufacturing process by having
various pieces of a product made
in various countries and then
assembling the pieces in another
country
Special Economic zones:
regions that offer tax breaks,
eased environmental
restrictions, and other
incentives to attract foreign
business
Maquiladora zones – Mexico’s
special economic zones on northern
borders with US to create jobs for
farmers our of work
Maquiladoras
• Foreign-owned assembly companies located in the US – Mexico border
region
• Cheaper labor
• Favorable tax breaks
• Lax environmental regulations
• Close to markets at minimal cost
Maquilladoras
Examples of
Maquiladoras in Mexico Mercedes Benz
BMW
Kodak/Verbatim
Eberhard-Faber
Fisher Price
Ford
JVC
GM
Hasbro
Hewlett Packard
Honda
Honeywell, Inc.
Hyundai Precision
America
IBM
Mitsubishi Electronics
Corp.
Motorola
Nissan
Philips
Samsonite Corporation
Samsung
Sony Electronics
Toshiba
Xerox
Type of employment: Worker from Auto Trim de
Mexico S. A. de C. V
Work Schedule: 40 hours per week
Daily wage: $8.29
Minimum wage (Geographic Area A): $3.44 per
day
Wage per hour: $1.04
Weekly salary: $58.09
Discount for union dues (4%): $2.32
Net pay: $55.77
Amount leftover per week for clothes, shoes,
entertainment and medical attention: $2.03
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outsourcing
• Turning over much of the responsibility for production to independent
suppliers
• Vertical integration: company owns all phases of production
• What does outsourcing mean for the profit of a company?
• What does it mean about choosing a location?
• http://www.youtube.com/watch?v=i5zg1fG7m88