Economic Geography Goals to understand how people earn their living that livelihood systems vary spatially how economic activities are interrelated and linked the how and why of variations in the spatial patterns of economic activity I Economic Systems patterns of production and consumption and the location of economic activities within each system subsistance economic systems commercial market economic systems planned command economic systems Distribution most countries show combinations of each system dual economies rural versus urban Technology Systems affect geography of economic development and systems II Characteristics of Each System 1 Subsistance agricultural rural technologically underdeveloped regions intensive ag vs extensive ag pastoralism one crop plantation economies specialization based on colonial relationships 2 Market complex advanced economies hierarchically spatially linked in patterns of consumption production exchange of goods services profit specialization even in ag interdependence Economic location decisions based on accessibility to material inputs raw materials labor with particular skills processing costs land taxes energy relative pull of market transfer costs at other locations transportation local government policies weight gaining versus weight losing weight bulk perishability fragility Goal Maximize profit comparative advantage skill labor environment resources specialization and complementarity trade networks interdependence agglomeration effects cluster advantages intervening opportunity distance decay and accessibility Location of agricultural activities in a market economy von Thunen Agriculture in the Global Economic System revolutionary phases subsistance market oriented Four Kinds of Economic Activities primary e g secondary e g tertiary e g quaternary e g location of activities in each sector Four Kinds of Economic Primary Secondary Tertiary Activities Activities Quaternary Economic Economic activities can be categorized into Primary economic resources directly four types activities are those that use natural Secondary economic activities use raw materials to produce or manufacture something new and more valuable Examples of secondary economic activities include manufacturing steel processing wheat into flour milling lumber into plywood iron smelting chemical industries power production and construction Tertiary economic activities are those activities which provide services personal and professional services such as doctors teachers dry cleaners and secretaries as well as retail and wholesale services such as store clerks truck drivers and fast food providers In modern economies some individuals process administer and disseminate information Such activities are termed quaternary which is used to describe white collar professionals working in education government management information processing and research Location of Economic Activities Geographers are concerned with the spatial organization and location of economic transportation and communication systems which produce and exchange the great variety of commodities raw materials manufactured goods capital and services which constitute the world economy Primary economic activities are located at the site the natural resource being exploited for example iron mining at the site of the iron deposit of Secondary economic activities locate either at the site of the resource or close to the market for the manufactured processed good depending upon whether which affect the location of economic activities labor costs energy costs availability of capital land resources and expertise In the case of lumbering the finished product is cheaper to ship than the raw materials so lumber mills are located close to forests to minimize costs and maximize profit In the case of flour and bread it is cheaper and easier to ship wheat than the finished product bread Consequently bakeries are located close to consumers in cities again to minimize costs Tertiary economic activities locate where services are required that is where people are Quaternary economic activities are not tied to resources the environment or access to a market With improvements in telecommunications these economic activities can be located anywhere Factors which do tend to affect the location of high tech economic activities include access to universities and research centers and to a pool of highly trained and skilled workers availability of venture capital proximity to places with high quality of life attributes scenery recreation climate quality education system and access to excellent transportation and communication networks Patterns of Economic Development Read the textbook pages 269 on to understand differences in economic development Development can be defined as the extent to which the resources of an area have been brought into full productive use Carefully look at the patterns of economic development shown on the world map Note that most less developed nations are located in the southern part of the world and that most developed nations are in the northern half of the world People talk about this in terms of the North South split Other people the authors of the text see this in terms of core periphery relations This pattern may be explained by a number of different factors including resource poverty overpopulation former colonial status location in relation to the core vs the periphery but there is no single reason to explain the level of economic development in most countries 3 Planned Economies central planning to achieve government determined objectives gov t agencies control supply price decide where to locate industries and crops to grow on social not profit criteria III Economic Development processes of change a changes in structure of region s economy b changes in forms of ec organization c changes in availability use of technology Economic development uneven core periphery patterns resources uneven imperialism colonialism result world system Characteristics of LDCs Characteristics of Developed Versus Less Developed Countries Less Developed Developed Per capita incomes are low and capital is scarce Wealth is unevenly distributed within individual countries e g Colombia 2 6 of population owns 40 of the national wealth Per capita incomes are high and capital is readily available Wealth is comparatively evenly distributed e g Canada 10 of population owns 24 of national wealth Primary industries dominate national economies