Chapter 12 notes - Teacher Web

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1


Chapter 12: Industry and Services
, pp
382
-
408


Field Note: Branding the Backboard

Where was the author visiting?
A poor neighborhood in Skopje, Macedonia

What was familiar that he noticed?
A Nike swoosh on the backboard of a basketball goal



The Nike brand

of shoes are everywhere and the trademark is as sell making it hard to tell where Nikes are really produced


When and where was Nike founded?
Oregon in 1961 by a former competitive runner




Nikes beginning sales was $8000 the first year and had sales of ov
er 16.3 billion in 2007



Nike’s headquarters is located in Beaverton, Oregon; a suburb of Portland



With over 6,000 people in the Beaverton

workforce not one individual is directly involved in the process of making the shoe.



However, there are 30,000 worldw
ide that directly work for Nike.



In the 60s Nike made a contract with an Asian country to manufacture the shoes

( S. Korea)



In 1974 the first domestic shoe manufacturing
facility was set up in Exeter, New Hampshire and Oregon focused on running the
company



Nike has grown with almost 40% share of the world’s athletic shoes



In 1925 Boston had a flurry of shoe businesses
and the cultural landscape reflected that with tanneries, factories,

signs specializing in different
types of shoes (agglomeration); in fact

there where over 300 shoe factories in one area of Boston alone.



In this chapter we will study the origins of
the Industrial Revolution and the diffusion into mainland Europe

and then into North America

and the
consequences
of which has changed the world
economy by creating a world division of labor or global workforce

Page 384:Where did the Industrial Revolution Begin and How did it Diffuse?



Industrial production was happening all over the world prior to the
Industrial Revolution



India was producing goods made of gold, silver,
and brass. They were also making textiles on looms considered to be the best in the world



Textiles in Great
Britain

were produced in small rural villages

inside of homes and the quality of Britain’s products
from place to place



With India, the textiles were so great
(in quality)
that there was a riot in 1721 when British textile makers demanded laws against the imports of
India’s products
.

2




Europe made up for the lack of quality
of their products with their ag
gressiveness



Commercial companies such as the Dutch and British East companies laid the groundwork
for Europe’s colonial expansion



They just needed a way t
o
mass produce items and by doing so they could bury the competition

Page 384:
The Industrial Revoluti
on




In the early 18
th

century markets for European goods were growing, especially in the colonies



The first steps in the Industrial Revolution did not use a revolutionary energy. They used new spinning wheels that were powe
red by foot
pedals and water runn
ing down hill
.

What w
as the known energy source
that was discovered to improve machines and enable other invention
s
?


Coal

for the
----
steam engine
---
water pumps
----
railroad




Much money was needed to fund and perfect inventions and capital (money) begin
flowing into the colonies and global trade to Western
Europe
. See 12.2



James Watt
improved the steam engine by creating a separate chamber to house the steam and by perfecting the pistons



Innovations in iron manufacturing enabled the production of the stea
m engine and other iron products



The English learned how to burn coal in a vacuum like environment
that produced a much hotter burning, pure, carbon fuel called coke.
This
allowed them to smelt iron ore to create cast iron.
They also began to use molds fo
r the iron allowing for more consistency of iron parts and
iron itself.


What is the name of the town where the world’s first cast iron bridge was built?
Iron
bridge, England





The steam engine had a dramatic effects: it pumped water out of coal mines allowing coal
workers

to go
further

in the mines
, it powered spinning
wheels that spun 100 plus spools of thread at once, it powered do
zens of looms in a factory at once, and
created a new form of transportation
-
the railroad


In what year was the
railroad opened?
1825




Ocean shipping entered a new age when the first steam powered engine crossed the Atlantic in 1819

3




With all these
inventions

and capital
, England held a monopoly
over products that were in world demand but also had a monopoly on the skills
necessary to make machines that manufactured the products



Look at figure 12.4, it shows the origins of the Industrialization and if you pay close attention
you will notice that
earliest
areas to industrialize
were the areas that were closest to the resources needed for industrialization
:

coal, iron ore, and capital



Also you will notice that in Britain 3 things gave them an advantage to the development of early industry and that w
as the location
of the coal
fields, iron ore, and coastal ports

Page 387
: Diffusing to mainland Europe



While diffusing

through Western Europe the same locational criteria applied; the
proximity to coal fields and connection via water to a port



As we have s
een in previous chapters the coal fields
ribbon their way across Europe and into Russia, See figure 12.5
. Iron ore is distributed along a
similar pattern



Industrial development in one area such a as the Ruhr area (Germany) change
d

the port cities to which they are linked



The Rhine River flows through the Ruhr area and enters the sea at Rotterdam



The Rotterdam port has become the most important port in Europe and the hub of a global commerce



The railroad allowed for manufacturing t
o move to large markets or grow in existing ones. London was an attractive site for industry because of
its location along the Thames

River



The railroad and water connections made Paris and already large market for manufacturing even bigger becoming the la
rgest European market


Look at 12.5 again and tell me what do you notice about Paris and London?
Not located by
industrial resources but became large markets..why? Railroad

(Time space compression)


Page 388: How do Location Theories Explain Industrial
Location?



The improvements in transportation and communications that have created time space compression make secondary industries much

less
dependent on resource location



Raw materials can be transported to distance locations to be con
verted
into manufact
uring
products



In economic geography
geographers focus on location theory to predict where a business may go or should be located



Economic geographers have to assume that decision ma
kers are trying to maximize their advantages over competitors, they want
to be able to
make as much profit as possible

and they will take in to account variable costs such as energy supply, transport expenses, labor costs, etc.



To maximize
advantages, a key issue is friction of distance which is the increase in time and cost th
a
t usually comes with increased distance


4




If a raw material must be shipped hundreds of miles to a factory rather than next door the friction of distance increases

and the cost of the
product will rise



Distance decay suggests then that manufacturing plants

will be more concerned with serving the markets of nearby places


Weber’s Model




Alfred Weber developed a model for the location of manufacturing plants.
In the “Theory of Location of Industries” he selected as the critical
determinant of regional
industrial location as transportation costs.




Weber’s least cost theory accounted for the location of a manufacturing plant in terms of the owners desire

to minimize three categories of cost



The first and most important is transportation. The site chosen

must entail the lowest possible cost of moving raw materials.



The second was the cost of labor. High labor costs reduce the margin for profit so a factory that is further but has cheap la
bor could make up
for
the added transportation costs



The third factor

is agglomeration. This happens when a number of enterprises cluster in the same area. They can provide
assistance to each other
such as shared talents, services, and facilities. When you head to Daytona you will notice a huge Harley Davidson
Bike Headquar
ters then most of
the businesses located in that area are focused on servicing motorcycles or clothing for riders etc. Same thing when you have

a large hospital
in
an area; you usually can find many clinics around the area or
labs, and many businesses such

as medical equipment
places
to make provisions to
the
surrounding area; think of Kingsley Ave and Orange Park Medical Center.



Deglomeration is when enterprises leave to move to other locations

Hote
lling’s Model



Harold Hotelling sought to understand the i
ssues of locational interdependence by posing the question of where 2 ice cream

vendors might stand
on a beach occupied by people distributed equally along the beach



He believed
that at first the shops would start at distance locations but as they sought t
o maximize profits they would continue to move closer
until they were back to back. Once they reached that location they would not move because they would be afraid of losing prof
it.

Page 390: Losch’s Model



He
also
emphasized
profit maximizations in his
locational analyses
. He worked to determine locations that
manufacturing plants could ensure a
maximum profit




He added spatial influence of consumer demand and production cost to his calculat
ions. I
t

is difficult to determine the point of maximum profit

but as figure 12.7 suggests firms will usually try to identify a zone in which some profit is expected.

5




To the left and right of the zone distance decay will make sales unprofitable



Firms tend to stay away from the
margins of that zone



But a new firm ca
n always set up and change that situation as happens in a capitalist system


Major Industrial Regions of the World

before 1950




The models help to explain where industries are located but prior to 1960 the main location

costs were transportation of raw mat
erials and
shipping of finished products



Therefore, most manufacturing belts were located near raw materials



The world map of major regional
development reveals that before 1950
only

a s
mall

minority of
countries

were major
industrial

economies



Beyond raw
materials other factors explain this pattern:

1.

Relative location

2.

Political circumstances

3.

Economic leadership

4.

Labor costs

5.

Levels of education and training



There are 4 primary industrial regions that stand out:

1.

Western and Central Europe

2.

Eastern North America

3.

Russia and the Ukraine

4.

Eastern Asia

Western and Central Europe



Manufacturing regions began in Western Europe



Europe’s principal
coal deposits lie in a belt across northern France
,
Belgium
, north central
Germany
, northwest
Czech republic

and southern
Poland

therefore industrialization expanded along th
at same direction



Three manufacturing districts lay in Germany

1.

The Ruhr based in Germany

2.

The Saxony near Czechoslovakia

3.

Silesia which is now a part of Poland

6




Germany still ranks among the wo
rld’s
leading producers of coal and steel and remains Europe’s leading industrial power



see figure 12.8

The Manufacturing Belts of Germany



The Ruhr (Germany) became Europe’s greatest
industrial complex
.
The Ruhr reveals the combined advantages of high qu
ality

resources, good
accessibility and proximity to large markets



Saxony

(Germany
) was

always oriented toward specialized lighter industries. It became known for
its optical equipment, cameras, and ceramics



The Silesia

district was based on high quality c
oal resources

A NEGATIVE CONSEQUENCE OF ALL THIS
EUROPEAN INDUSTRIALIZATION WAS THAT IT ENSURED THAT WWII WOULD BE THE MOST
DESTRUCTIVE
CONFLICT EVER!

Page 391: North America




Manufacturing in North America
began in New England during colonial times
even though they were not located near
mineral resources



North America benefitted from the capacity of its companies to acquire needed raw materials from overseas sources



Coal was the chief fuel for industries at the time and the United States coal reserve
s are among the
world’s

largest
. See figure 12.9



The United States competes with China as the world’s largest coal producer



Raw materials play an important role in industrial location.
For example, i
n the northeastern United States
steel plants were locate
d on the
seaboard to
facilitate the transferring of iron ore from Venez
uela, Labrador, and Liberia.
Steel plants were built right on the port so that once
the iron ore was shipped to the port the

plants would begin to manufacture steel



In the decades after

WWI the United States emerged as the world’s prom
inent
industrial power. Of course it also helped that the
destructive
war

was fought in Europe and not on our soil or it could have turned out much differently



The Great Depression that began in 1929

was an enormous setback to all because the effects were felt
worldwide yet the U.S. came out of it
with an expanded industrial dominance

Page 393: The American Industrial Belt




Look at figure 12.10 to locate the manufacturing belt



In the northeastern edg
e
of the U.S. the light industries of New England and New York give way to heavier manufacturing



Throughout much of the 20
th

century iron ores were smelted right on the water front in tidewater steel mills



Pharmaceutical industries, and lighter manufacturi
ng plants were established there too

7




Industrialization began early in New York
, which today is the heart of the American megalopolis and homes to tens of thousands of industrial
establishments



New York does not have many natural resources

but it is a very
big market



New York has an intensive transport network and long has been one of the world’s greatest ports



The port is a major break of bulk point where cargo is transported from one mode of transportation to another; what does this

mean?



Such transfers g
enerate employment, activity, and wealth



Growth in upstate New York district was originally stimulated by the Erie Canal which was dug in the early 19
th

century

to connect the East
coast to the Great Lakes



The area around Rochester came to be known for its

cameras and optical products
, Schenectady for electrical appliances, and Buffalo for steel



Canadian and U.S. manufacturing complexes meet in two great horseshoe shaped zones around the western ends of Lake
Ontario and Lake
Erie




The Montreal area along th
e upper St. Lawrence
River

also forms part of the Canadian
industrial zone. It has a big advantage which is cheap
hydroelectric power.
Aluminum refining and papermaking industries are located there.


The Former Soviet Union



The So
viet effort to
industrialize fo
cused on manufacturing in the western
part of Russia




In Moscow, the capital, the city and its surrounding area offered an important local market, converging transport routes a la
rge labor force,
and strong centrality


just like Paris and
London



Nizhni Novgorod (S.E. Moscow)
had

huge automobile factories; became the Soviet Detroit



The Soviet Union had an enormous expanse of resources and raw materials within its borders.
East of Moscow, the Ural Mountains yield an
incredible variety of met
allic ores, including iron, copper, nickel, chromite, bauxite,
and many more



In the first decades of the 1900s Russia tapped a large supply of coal and iron ore in Siberia



The St. Petersburg area is one of Russia’s oldest manufacturing centers. It was chos
en by Tsar Peter the Great

not only to serve Russia’
s capita
l
but also to become the countries
modern industrial focus



The skills and specializations that Peter the Great nurtured with the help of Western European artisans still Mark the area’s

key industr
ies :

1.

High
-
quality machine building

2.

Optical products

3.

Medical equipment



Industries such as shipbuilding, chemical production, food processing and textile making were also located there

8




When the Ukraine and Moscow areas were threatened by the German armies
in WWII
, whole industrial plants were dismantled and
reassembled in Volga cities


protected from war by distance. Samara even
served as the Soviet capital for a time during War II



Samara became an oil refinery center, Saratov acquired a chemical industry,

and Volgograd

became known for its
metallurgical industries. The
Volga was set on a course that has allowed it to remain one of Russia’s dominant industrial regions to this day

Page 395


The Ukraine Manufacturing Belt



After WWI, the Soviet Union annexed

Ukraine and used the rich resources and industrial potential of
Ukraine to become and industrial power



Ukraine produced as much as 90% of all the coal mined in the Soviet Union

and with iron ores from the Krivoy Rog reserve and later from the
Russian Kurs
k Magnetic
Anomaly
, the Soviet Union grew into one of the world’s
largest manufacturing complexes during the mid
-
twentieth
century

Eastern Asia



Japan and China are the Asian countries where large scale industrialization first happened. Japan was clearly
the dominant player. China’s
industrialization came later



In less than a century after the beginning of the Industrial Revolution, Japan became one of the world’s leading industrial

countries. This
accomplishment is all that more remarkable bec
ause Japan h
as limited resources



Much of what is manufactured is made from raw resources imported from all over the world



Japan’s territory is just 1/25
th

the size of the U.S.
and its population is less than
half
that of the U.S. Its transformation into the world’s
second
largest economy has often been considered a miracle



Japan’s economic development was built on capital from colonization and on government
policies that had the specific goal of
industrialization



Between 1866 and
1869 under the banner of the Meiji Re
storation, reformers mechanized Japan’s domestic industries, moved the capital
from the interior to the coast, organized its armed forces
, and obtained advice from British experts on issues ranging from education

to
transportation
-

which is why the Japanes
e drive on the left side of the road



The Japanese also established colonies and soon raw materials and capital were flowing to Japan from Korea, Taiwan, and mainl
and China



The 1930s and 1940s brought triumph and disaster; triumph because of a military camp
aign that included vast

conquests in the Pacific, East
Asia, and Southeast Asia and then a surprise attack

on Pearl Harbor in Hawaii, and disasters when Japanese forces were driven back with great
loss of life



The war ended with the utter destruction of th
e two Japanese cities by American atomic bombs

9




Although the U.S. took control of Japan in 1945 with Japan’s economy in shambles
, a few decades later the nation had become a global
economic power

Page 396: The Japanese Manufacturing Belt



Japan’s dominant re
gion of industrialization and urbanization is the Kanto Plain
, see figure 12.12, which holds 1/3 of the nation’s population and
includes the Tok
y
o
-
Yokohama,
Kawasaki

metropolitan area. It is the 2
nd

largest metropolis on earth behind Mexico City



The Kanto
Plain has a nice harbor at Yokohama and is centrally located with respect to the country as a whole. It is located near the c
apital,
Tokyo



When Japan embarked on its planned course of economic
development
, many industries and businesses chose Tokyo as thei
r headquarters in
order to be near government
decision makers



During the mid twentieth century, the Tokyo
-
Yokohama, Kawasaki area became Japan’s leading manufacturing comp
lex
, producing more than
20% of the
country’s

output



Japan’s second largest industria
l area extends from the eastern end of the Seto Inland
Sea

to the Nagoya area and includes the Kobe, Kyoto,
Osaka triangle. This is known as the Kansai
district and it is becoming a rival to the Kanto district because Kanto is an industrial region with ste
el
mills, it has a major

chemical industry,
automobile manufacturing, ship building, textile factories and many others



During the 19
th

century, raw materials from Korea and later from Northeast China moved l
arge quantities along the Seto I
nland Sea

bringin
g a
large amount of raw materials into the Kansai district



Japan’s product dominated the markets around the world and allowed Japanese industries to purchase needed raw materials from
anywhere



For example Australia became one of Japan’s leading suppliers



J
apan’s post war success

was based in large measure on the skills and the low wages of its labor force which allowed manufactures flood foreign
markets with low priced good. The good
s

were not known for quality

only for the affordable price




But that change
d when the factories began to excel in quality as w
ell (after the 1950s). This development led to higher prices, higher wages, and
competition from countries where cheaper labor could be found

Page 398: How
Has Industrial Production changed?



The manufactur
ing boom of the 20
th

century can be traced prima
rily to the innovations of the mass production assembly line
started by Henry
Ford which allowed
for the production of consumer goods at a single site on a previously unknown scale



The time frame in which the

assembly line

was the dominant
mode of production is called_________________? Fordist

10




Economic geographers see the Fordist system as including a set of social structures

(meaning that corporations and countries support each other)

and financial orders (su
ch as Bretton Woods in which countries adopted the gold standard, agreeing to measure the value of their currency
to
gold)

that supported mass production by corporations



The world economy is now a post Fordist system. Production

has been and dispersed around the globe by multi
-
national compa
nies that shift
prod
u
c
tion
,

outsourcing it around the world and bringing places closer
together

in time and space than would have been ima
ginable at the
beginning of the 20
th

century



The conce
pt of time
-
space compression is the easiest way to see the dramatic changes in the global economy. Time
-

space compression
is the
notion that some places in the world are more connected through communications and transportation than ever before



David Harve
y, who coined the term, time
-
space compression, believes that modern capitalism has so accelerated the pace of life and so changed
the nature of the relationship between places that
“the world seems to collapse inward upon us”



Fluctuations in the Tokyo sto
ck market impact New York in hours or even minutes



Overnight campaigns
can turn a product innovation on
to every corner of the globe



Time
-
space compression has altered the division of labor. When the world was les
s interconnected, most goods were

produced

close to the
point
of consumption



With just in time delivery corporations can draw from labor around the world to grow profits annually. One way to gro
w profits is to cut costs
especially
la
bor



Most multinational corporations have moved the labor intensiv
e manufacturing particularly assembly activities to peripheral countries where
labor costs are cheap, regulations are few, and tax rates are low



The manufacturing jobs that remain in the core are usually highly mechanized, have a high cost of transportatio
n for finished products, and rely
on regional consumption



Technologically sophisticated manufacturing also tends to be sited in the core because both the expertise and the infrastruct
ure
are there



Research and development activities tend to be concentrated

in the core, where high levels of education and access to technology are the norm




The global division of labor has reshaped the role different economic sectors play within countries

Page 399: Televisions


Core, the semi periphery, and the periphery



Com
mercial production of television sets began after WWII with small and medium firms in
Europe
, Asia, and North America




Firms in the United States such as Zenith were the dominant producers of televisions until the 1970s



During the 1970s and 1980s a small n
umber of Asian producers, especially Japan seized a much larger percentage o
f the market and a few
European firms increased as well



By 1990 8 out of 10

large T.V. producers were Japan
and the other 2 were European

11




The T.V. production has 3 key element:

1.

Re
search and design

2.

Manufactur
ing of components

3.

Assembly



Research an
d design continues to be located in the home country
of the major television manufacturers



During the 70s major firms moved manufacturing “off shore.” The United States
moved their industri
es to the maquiladoras of Mexico and in
China



The Japanese firms moved these functions to Taiwan, Singapore,
Malaysia
, and South Korea



By the 1990s manufacturing methods had changed because greater mechanization was being used in the assembly process



Recently, the process has changed research and development has lead to high def T.V.s and plasma T.V.s and now these are bein
g produced in
Japan but is expanding into China and South Korea



Tracing T.V.s all over the world helps us to see how global divisio
n of labor currently work



Labor is moved to the periphery and semi
-
periphery to take advantage of labor costs. When methods of production changes the production can
be moved again to take advantage of the infrastructure and skilled labor

New Influences on the Geography of Manufacturing


Importance of Transportation in Industrial Location



Efficient transportatio
n systems

enable manufacturers to p
urchase new raw materials from d
istant
sources

and to distribute final products almost
anywher
e



They must have back up plan
in case one mode of transportation fail such as is rail services are interrupted



Since WWII major developments in transportation have
improved

intermodal connections
-

places

where 2 or more modes of transportation
meet
. This

eases the flow of good and reduce costs



The invention of the container system has lowered costs and increased flexibility
, allowing many manufactures to pay less attention to
transportation in their location
decisions



The container system also helped wit
h the refrigeration of goods that can now be shipped around the world



Jacques Charlier
studied the Benelux seaport system and the role that containerization played in these changes



Containerization lead to a growth of sea trade in the Benelux ports and exp
lained the locational advantage of the ports to Rotterdam (6 hours by
rail or truck) to 85% of the population of Western Europe


12




The container system lead to a growth in shipping

and what he called a “warehouse” for Europe.

He believed the Netherlands was

the
warehouse of Europe



The Netherlands has 1800 U.S. firms



In 2003 50% of all goods entering into Europe came from Rotterdam or Amsterdam

Page 400: Importance of Regional and Global trade Agreements



Regional trade organizations such as NAFTA and the E.U.

have trade agreements that set up quotas for where imported good
s

can be produced



Governments have individual agreements with each other about production and imports, and most
governments

are part of the WTO whic
h
negotiates

rules of trade among member st
ates



The WTO:

1.

Promotes free trade

2.

Dismisses the use of the import quota system

3.

D
iscou
rages

the
protection by a country of its domestically produced goods



The agreements help to maintain a stable economy within a given state



In 2001 when the US and EU agreed to allow China to become a member of the WTO they agreed to remove the
quota system that restricts
Chinese goods into the EU and US



However, the EU and US issued safeguard quotas against Chinese
imports. In a few years the
se safe
guard quotas will go away and we will see
more Chinese goods entering into both the EU and US



The World Trade estimates that there are close to 300 regional trade organization in existence



Most regional trade organizations encourage movement of prod
uction within the trade region and promote trade by deleting trade quotas and
tariffs
among member countries



A regional trade agreement sets up a special free trade agreement
among parties to the
association
, leaving
non
-
members to trade through the
rules
of the WTO

Importance of Energy in Industrial
Location



Coal as an energy source gave way to oil and gas



Although
there was the

discovery
of oil in the North Sea
Europe still depends on foreign petroleum



The US has 2 neighbors with
substantial

fossil fuel reserves

(Mexico’s oil and gas may rank among the world’s largest
) but

its own supplies remain
limited. Japan is almost totally dependent
on foreign oil



During the Industrial Revolution manufacturing plants were located near coal fields; tod
ay major plants are not located neat
oil fields

13




A huge system of pipelines and tankers delivers oil and natural gas throughout the world



The fears of the oil crises in the 1970s caused manufacturing plants that required a lot electricity to move to sites
where the environment

is
moderate and heating and air conditioning costs were low



After the crises energy conservation goals were modified and in the early 2000s the reliance of
the US on foreign energy was greater than before
the 1970s




Securing an energy

supply is an increasingly important national priority



US consumption of petroleum and natural gas is about 27% and 37% respectively of the annual
world
total




By 2001 the US needed at least 20 million barrels
of petroleum per day to keep the power plants
, machinery, vehicles, aircraft, and ships
functioning



But oil production in the US recently has averaged about 10
% of the world total

and our oil reserves are estimated to be about 4% of the world
total



In 2004 the US was the 3
rd

largest oil producer yet
it remains heavily dependent upon
foreign oil



The US leads the world on demand and consumption of oil



The use of natural gas increased since WWII. One result of increased use of natural gas is the pro
liferation
of pipelines. We have over 2.5 million
miles

of pipeline in North America.



Countries with large reserves of oil and natural gas; Saudi Arabia, Iraq, Russia, etc. occupy a special position in the globa
l economic
picture of
these only Russia is a major industrial power



While oil has brought much wealt
h to some in the Middle East, it has also ensured the outside powers such as the US and
Great Britan are
involved and invested in what happens in the region

Page 402: Where are the Major Industrial Belts in the World Today and Why?



We have been
experiencing deindustrialization

and then the region changes to service region and when this occurs the region will at first
experience

a period of high unemployment



The new industrial regions emerge as shifts in politics, laws, capital flow, and labor ava
ilability occur



Europe and the US are deindustrialized regions
. When an area deindustrializes it becomes a Rust Belt.

China



China’s major expansion occurred during the communist period



China is a large country with many resources. The quality of the coal i
s good, the quantity enormous, and many of the deposits are near the
surface



China’s iron ore is not so productive and is of low grade quality

14




The Communist leaders in 1949 were determined to rapidly industrialize China



Under the planning rules the Northea
st district became China’s heartland. Shen
yang became the Chinese Pittsburg with metallurgical, machine
making, engineering, and other large factories



Anshan

became China’s leading iron and steel
-
producing center
. Harbin has more than 2 million people, pro
duced textiles, farm equipment, and
light manufacturing



The 2
nd

largest industrial region is the Shanghai and the Chang district developed around the country’s biggest city
-
Shanghai



However, the communist planners never allowed Shanghai to reach its fulle
st potential and instead focused on the Beijing

Tianjin complex.



China’
s labor force could attract h
undred
s

of
companies

in the world
-
economy
’s global division of labor



The low daily wage has resulted in thousands of companies moving their manufacturing t
o China


not just moving the actual company

just the
production of a good



Many cities are polluted


belching smoke stacks that rise above a smog


choked urban landscape



Streets are jammed with traffic



Today China is pushing industrialization into the in
terior of the country



On the coast, Shanghai recently trumped the Netherlands Rotterdam as the world’s busiest port



China is a major recipient of industrial work that is out sourced or moved offshore. Each step in the commodity production is

now outsourced

to
suppliers
, who focus their production and offer cost savings



When outsourced work is located outside the country is called offshore

Page 404
:

What

is the Service Economy and Where are Services Concentrated



In the 1970s there was a major increase in oil

prices when international instability and inflation produced a downturn in the global economy



The core had a problem keeping its competitive edge without some type of readjustment



The direction that readjustment would take was toward mechanization and the

development of
service

and information industries. This led to a
post Fordist economic o
r
der in many of the core countries



Many of the core area went from industrial economies to tertiary, quaternary, and quinary economies



The service sector grew exponen
tially and employed more workers than the primary and secondary industries combined



During the last three decades, both
qua
ter
nary and quinary sectors have experienced very rapid growth validating the core moving towards a
post industrial economy

Geographi
cal Dimensions of the Service economy

15




The world economy was already experiencing wide socio
-
economic disparities by the time of deindustrialization and the growth of the service
sector



Only the wealthier industrial regions were the most successful in estab
lishing a postindustrial service economy



In the first decade of the 21
st

century
, east Asia, western Russia and the
Ukraine
, western Europe and North America still account for over 75%

of
the world’s total output of manufactured goods



Some secondary indust
rial regions have made the transition to a service economy while maintaining the manufacturing base



The Sunbelt is one of those regions. The population and economy of the Sunbelt region has grown as companies from the service

sector have
chosen to locate i
n areas
such as Atlanta and Phoenix where the climate is warm and local laws welcome them



Birmingham developed into an iron and steel economy



Atlanta has cotton, tobacco, and a furniture industry



High tech
and financial industries have been created in Jack
sonville, Fl (Everbank Field) and in
Charlotte there is the Bank of America stadium

changing the cultural landscape


Someone read 12.15

(How companies change the landscape)



A high tech corridor is an area designated by local governments to benefit from low
er taxes and high technology structure
with a goal of providing
high tech jobs to the local population



California’s Silicon Valley is a good example of a high tech corridor



Several decades ago a number of tech companies located their research and
development activities in the area around the University of
California, Berkeley and Stanford

University because of the prospect of developing links with existing research companies and a highly educated
work force



Some of the companies located there are:
Cicso Systems, Adobe, Hewlett
-
Packard, Intel, IBM

and Netscape to name a few



As a result we have a high tech corridor



What is a technopole? An
area planned for high technology where agglomeration

built on a synergy