GEO3502 Exam 3 Study GuideManufacturing-Includes assembly, production, and distribution. Value added by manufacturing occurs at each stage. -Present day manufacturing still reflects Post-WWII history, but China is now the largest. US is 2nd -4 main regions: Eastern North America, Western Europe, Western Russia & Ukraine, and East Asia. -Manufacturing regions-North American Manufacturing Belt: The Midwest + parts of New England and Southeastern Canada. 1/3 of population, but 2/3 of manufacturing jobs and ~50% of its output. -West Coast (US): Industrial restructuring post WWII (defense spending)—high tech and service industry jobs. Technopoles like Silicon Valley-Gulf Coast (US): Petroleum/chemical products -Britain: Britain’s manufacturing has lingered- its textile/woolen/steel/iron production is being out competed by other areas with lower labor costs-Largest European manufacturing region: The Rhine-Rhur River region (Germany, France, Belgium and the Netherlands). Many of these benefitted from being destroyed in WWII; they could retool their economies for a productive manufacturing sector. Centrally located countries with access to large markets. Rotterdam (in this region) is oneof the world’s largest ports. -Italy’s Emilia-Romagna Region: Europe’s largest conglomeration of high-tech firms. Exemplifies regional basis of competitive advantage & critical role of agglomeration economies. Ferrari, Maserati, etc.-Russia, Ukraine, Central Asia: Volga Region- oil/natural gas and chemicals.-Japan: Export-oriented; electronics, steels, ships and cars. National economic strategy heavily guided by the Ministry of International trade and Industry. Introduced offshore assembly to take advantage of cheap labor nearby. -China: Pearl River Delta Region. Special economic zones; Shenzhen and Zhuhai.Textiles-Low-tech industry. Unskilled, labor-intensive, little tech sophistication, small firms, few economies of scale. -Leading sector during Industrial Revolution-In developed world, steadily declining since 1970’s-Lured by lower wages in the developing world-Few barriers to entry; very competitive and sensitive to comparative advantage-50% apparel-China & India-“footloose company”Steel-Iron & steel production generates a wide variety of output. Essential to other sectors. (Automobile parts, ships, aircraft, steel girders, dams, pipes, wire, furniture)-Very capital-intensive-Oligopolistic and high barriers of entry (not very competitive) -US dominated this industry until the 1960’s. ~63% of global output. As of 2005, US only produced 8.3%-World competition from Europe, Japan and others. -Raw materials: iron ore and limestone-High costs; companies depend on economies of scale/agglomeration economies-Production now in Latin America, South and East Asia. China is by far the largest producer because of their own demand for it. -Minimills: automated to minimize labor costs. Located near markets because their main input is available there. Biotech-Application of molecular & cellular processes to solve problems, develop products and services, or modify living organisms to carry desired traits-Agriculture, healthcare, energy (biofuels) & environmental sciences-Venture capitalism: high risk, large investments with slow returns (but potentially large profits)-Tendency to cluster in distinct districts; place-based characteristics are essential to success in innovation-BioValley Network of Germany/France/Switzerland. Medicon Valley in Demark/SwedenAutomobile-The 3 developed regions of the world account for over 70% of automobiles produced (East Asia, North America, Europe)-Decline of electric trolleys-Oligopolization of the industry. Competitive pressures of economies of scale led to industry being controlled by handful of transnational corporations. -In US GM, Ford and Chrysler account for 95% of profit-In 2010 China became largest producer of automobiles. South Korea, Brazil and India also important. Big push after joining the World Trade OrganizationElectronics-Micro electronic technology dominant-Radio (1901), integrated circuit (1960), microprocessor (1970s)-Consumer electronics and increased productivity-US dominated 1960’s and 1970’s, Japan began dominance in 1990’s. -Japan leads, followed by US, Germany, France and the UK-Consumer electronics have shifted production to developing countriesMajor players through history (e.g. Andrew Carnegie and Henry Ford)-US Steel company under Carnegie produced 30% of US’ steel. -Henry Ford: deskilled car manufacturing with assembly line production that split things up into simple tasks and paid high wages to limit turnoverEffects of deindustrialization: international division of labor (manufacturing stretched geographically), decline in manufacturing jobs. In the US: Midwest belt hit hard. Causes of deindustrialization: high cost of wages, high pension costs, more capital intensive because of technology, companies failed to reinvest in research and inadequate investment in infrastructure.Fordism: Named after Henry Ford. Highly refined divisions of labor within a factory, social contract between capital & labor (labor unions tolerated), firms large & vertically integrated, implosion in 1970’s and 1980’s giving way to post-Fordism. Post-Fordism/Flexibilism: Flexible manufacturing- goods manufactured cheaply in small or large quantities. Most important aspect= flexibility of production process including organization and management in factory. “Just-in-time” inventory systems (little idle capital and downsizing),subcontracting, outsourcing, high use of info technologies in machines. Moore’s Law: long term trend of exponential growth in computing power and memory. Advancements have revolutionized capitalism- new productions and increasing speed/efficiency/productivity/profitability of other goods/services.Agglomeration economies: networks as opposed to individual firmsServicesIn US, Services make up 80% of employment. Other 20%= manufacturing and construction. Greatest employment gains in professional, personal and social services. Producer services: sold to corporations rather than households. Finance, insurance, real estate. Professional and business services (legal, advertising, engineering, architecture)Transportation and communicationsWholesale and retail trade: intermediaries between producers and consumersConsumer services: eating & drinking, repair & maintenance, entertainment, tourismGovernmentNonprofitLabor Markets in Service
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