Class 12b: Secondary economic activitySecondary economic activityIndustrial RevolutionIndustrial Revolution and geographySlide 5Where does industry locate?Slide 7Five location factorsSlide 9Slide 10Slide 11Slide 12Slide 13Slide 14Slide 15Slide 16Slide 17Slide 18Slide 19Slide 20Slide 21Slide 22Slide 23Slide 24Slide 25Slide 26Slide 27Slide 28Slide 29Slide 30Slide 31Slide 32Class 12b: Secondary economic activity• Site and situation for industry• Weber’s locational triangle• Globalization and manufacturingSecondary economic activity•Adding value to primary products•Manufacturing, processing, energy, construction•Where? culture and economy > physical environmentIndustrial Revolution•1750s in Great Britain•From cottage industry to factories•Technological change: steam engine–Iron: blast furnaces stay hot–Coal needed as fuel–Steam locomotive (1812)Industrial Revolution and geography •Clustering of industrial activity•New or old cities•Rapid population growth•Social changes•New industries: chemicals, food processingWhere does industry locate?•Situation factors–Cost of carrying inputs vs. outputs–Accessibility to different modes•Site factors–Cost of land–Cost and skill of labor–Availability of capital•Economies of scale: producing additional units costs less than producing the first few•Benefits of concentrating many firms in one place •Benefits of concentrating many firms in one industry in one place Agglomeration economiesFive location factors•Raw materials–From primary activity or manufactured goods–Most important when:•Bulky or heavy inputs•Lose weight in processing•Perishable inputs•Market–Final consumer or another firm–Most important when:•Bulky or heavy outputs•Weight added in processing• Perishable outputsFive location factors•Energy–More important historically than today–Mills in Britain, New England, etc.•Labor–Price, skill, availability–Usually not mobile•Transportation–Costs vary by mode, distance, transfersFive location factors•Increasing interconnection of the world•Economic–Stock markets, international finance–Transnational corporations•Political•CulturalGlobalization•Henry Ford’s Model T assembly line•Large batches of a standardized product•Large inventory in warehouse•Workers could afford to buy productFrom Fordism…•Certain places concentrate in certain products–E.g., cars in Detroit, steel in Pittsburgh, chemicals in New Jersey•Considerable multiplier effects•Strong industrial regionsFrom Fordism…•Cheap long-distance transportation•Separate out production processes•More flexible production–Small batches, not mass production–Workers forced to be flexible–Just-in-time: minimize warehousing…to flexible production•The five location factors matter at each stage of production•One production line, many continents•Rapid growth where labor is cheap•“Race to the bottom”…to flexible production•Places specialize by function, not product–New York: “command and control”–India, Ireland: call centers–Jamaica, Dakotas: data processing…to flexible production•Labor: largest percentage of cost (and low-skilled)•Raw materials: cotton, other fibers•Market: population concentrations•Energy: moderately important•Transportation: not too importantFive location factors: textiles•Spinning fiber into yarn–Close to cotton, fiber production•Weaving yarn into fabric–Low labor costs•Designing clothing–Skilled labor needed•Cutting and sewing–Unskilled laborFive location factors: textiles•Where is labor cheapest?•High unemployment•Few or weak unions•Immigrants and/or womenFive location factors: textiles•Stage 1: Early industrial cities–Lowell, MA; Manchester, UK•Stage 2: Underdeveloped regions–Southern U.S.•Stage 3: Underdeveloped countries–Mexico and southwards–East Asia and westwardsFive location factors: textiles•Firms operating in more than one country•Exploiting spatial differences•But are they global?–90% headquarters in Europe-US-Japan–75% of investment, tooTransnational corporations (TNCs)Company Country with comparable GDPGeneral MotorsIndonesiaFord IranExxon TurkeyIBM
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