GEO3502 Exam 3 Study Guide Manufacturing occurs at each stage largest US is 2nd and East Asia Manufacturing regions Includes assembly production and distribution Value added by manufacturing Present day manufacturing still reflects Post WWII history but China is now the 4 main regions Eastern North America Western Europe Western Russia Ukraine 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 one of 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 BioValley Network of Germany France Switzerland Medicon Valley in success in innovation Demark Sweden Automobile 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 Organization Electronics 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 countries Major 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 turnover Effects 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 firms Services Government Nonprofit In 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 communications Wholesale and retail trade intermediaries between producers and consumers Consumer services eating drinking repair maintenance entertainment tourism Labor Markets in Service Economy Labor intensity more labor per unit output than manufacturing income distribution Bifurcated well paying professional jobs unskilled low paying jobs Contingent involuntary part time women minorities Evidence does not support McDonaldization Middle