Economic Geography
Economic Geography
The study of the flow of goods and
services through space, as well as
how people provide for themselves in
different places.
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Commodity Chain
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Linking producers to consumers
Classification
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Underdeveloped, Developed, and
Developing Nations:
• To say a country is underdeveloped
would be politically incorrect, in light of
the fact that the word underdeveloped
had a negative connotations
geographers developed a new way to
groups nations in the core-periphery
model.
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This model characterized nations into either:
core, semi-periphery, and periphery nations.
Measures of Development
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GNP-the measure of all the goods and
services produced by a country in a year.
• Provides a very vague vision of productivity.
For it fails to account for the lost through the
exploitation of natural resources.
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GDP- similar to GNP but it omits any
investments abroad.
Example: Japan has a huge amount of
investments abroad there for the GNP
would be significantly larger than the GDP.
Classification
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Characteristics of a
Core Nation:
• Have achieved high
levels of socioeconomic
prosperity and high
standards of living
• Contain world cities
such as London, Tokyo,
and New York which
serve as global centers
of economic activity.
• These nations include
the U.S., Germany,
Great Britain.
• Technology, Education,
Research
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Characteristics of a
Semi-Periphery
Nation:
• Newly industrialized
countries with diverse
economic opportunities
but have extreme gaps
between rich and poor.
• These nations are usual
in a transition stage to
becoming a core nation.
• Examples: Chile, brazil,
India, China, and
Indonesia
Classification
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Characteristics of a
Periphery Nations:
• Usually poor regions
that are very dependent
upon core nations.
• Low levels of economic
productivity and lack
infrastructure and have
rapidly growing
populations.
• These place have
benefited little from
globalization.
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Keep in mind that the
core-periphery model
focus on the economic
relationships among
places.
The “slow word” of the
periphery is often
compared to the “fast
world” of the core
because of the lack of
technology and
communication in
periphery nations.
Advantages of Production in
Periphery Nations
1)
2)
3)
4)
5)
Cheap Labor
Loose Labor Laws
Loose Environmental
Regulations
Low Taxes
The distribution of
natural resources by
locating different
aspects of production
in different countries.
•
Note: Most MNC’s are
conglomerate
corporations: composed
of many smaller firms
that serve different
functions. (i.e. distance
to natural resources)
World-System Theory
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Immanuel Wallerstein said “the world was
and interdependent system of countries
inked by political and economic
competition.”
When political and economic relations
strengthened the areas connected (core
nations) begin to thrive but the nation not
connected (periphery nations) did not get
these new technological advancements
and innovations. This was Wallerstein’s
theory as to why there are core,
periphery, and semi-periphery nations.
Impact of
Industrialization/Development
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Neocolonialism: the entrenchment of the
old colonial system under a more
economic than political society.
Tourism usually places a negative affect
on periphery nations because eventhough
it may support an economy it may take
away from the local culture. It also takes
away from the local entrepreneurs.
• Tourism may promote awareness about a
particular culture and intercultural contact it
takes a harsh turn on the cultural landscape.
Models of Development
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~Liberal Model ~
Assume that all
counties are at the
same stage
All countries are
capable of
development
~Structural Model~

general term for
models of economic
development
 A result of historically
derived power
relations within the
global economic
system
 Only certain countries
can become developed
 The structure is
already in place
(maquiladoras)
Modernization Model-Rostow
(1960)
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This model states that all countries follow
a similar path through 5 stages of
development.
• Traditional: subsistent farming, rigid social
structure, little technological change.
• Preconditions: progressive leadership,
diversification, more flexibility
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Introduction to technology such as the steal plow
Ability to mass produce food
Infrastructure is built
Development of political organization
Charismatic leader
Modernization (continued)
• Take-off: Manufacturing, some type of
industrial revolution, sustained grown
occurs. Urbanization increases,
industrialization continues, mass
production.
• Drive to Maturity: technology diffuses,
specialization, international trade,
modernization, population growth.
Modernization (continued)
• High mass consumption: High incomes,
Widespread productions, mainly service
sector jobs.
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International trade
Dependency Theory
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The structuralist view to Rostow’s
model. Relationship between
countries control and limit economic
development
• Development does not happen
everywhere due to dependence on a
core nation for money
Industrialization (Regions)
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Soviet Union: 90% of coal mined.
•
•
•
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Largest manufacturing complexes.
After WWII, industrialization continued. Dames were created.
Lack of coal with poor quality.
Four Tigers: South Korea, Taiwan, Hong Kong, and
Singapore.
• Tied to a shift in labor intensive industries.
• Created mainly automobiles, grand pianos to calculators and
computers.
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Europe: Began to expand after WWI
• Began in Italy, Spain and Scandinavia
• Successful in the Ruhr
• Industry rebounded through much of the continent while
maintaining its position in the globe
Industrialization (continued)
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North America:
• U.S. was the
industrial power
• Canada was a big
part as well
• American
manufacturing Belt
was formed and
extended
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Russia/Ukraine
• St. Petersburg
• Ukraine was
threatened by the
German army WWII
• Reassembled in
Samera
Changing World
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The Fall of the Soviet Union:
• Led to the establishment of international boundaries. For
example Ukraine became independent and Russia lost
one of it key industrial heartlands, which took a toll on
the supranationalism that was established.
• Major Political and Economic Changes in:
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Mexico, Brazil, Thailand, and Malaysia
• Until the end of the 1980’s there were three major
political-economic blocs:
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First World: The Capitalist
Second World: The Communist
Third World: Mainly mixed economies
• Due to the collapse of the Soviet Union, and the new
polcies implemented by Tanzania, and Ethiopia the 3rd
World party was no more.
Industrialization (continued)
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Eastern Asia
• Japan and China
• Where large-scale
industrialization 1st took
place
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China
• Industrial expansion
took place during
communism time
• Included manufacturing
districs
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Japan
• Limited resources
• Main manufacturing
made from raw
materials imported
from the whole world
• Established colonies
• Four Japanese districts
Secondary Regions
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Special Economic
Zones (SEZ)
• “Open Cities” and
“open coastal areas
to encourage
foreign investment
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Secondary areas
• Thailand, Malaysia,
Indonesia, and
Vietnam (possibly
the Philippines
• Most of the pacific
rim
Categories of Economic Activities
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Primary Economic
Sector:
• These are the countries
that harvest and extract
raw materials.
• Activities include
fishing, agriculture,
ranching, and mining.
• Nations who do these
kinds of activities are
usually undeveloped
nations trying to grow
their economy.
• Examples: Vietnam,
Laos
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Secondary Economic
Sector:
• These are the countries
that are associated with
the assembly of raw
materials in to goods
for consumption.
• Activities include:
Manufacturing,
production of metal,
and textile production.
• This type of activity is
characteristic to
undeveloped and
developing nations.
• Example: Japan
Categories of Economic Activities
continued
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Tertiary Economic
Sector:
• Involved with the
exchange of goods
produced, from the
manufacturer to
consumer in the
secondary service
sector.
• Activities include:
offices, banks,
hospitals, and other
basic service jobs.
• These Nations are
usually developing and
sometimes developed
nations.
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Quaternary Economic
Sector:
• Research and
development, teaching,
tourism, and other
activities that have to
do with generating or
exchanging knowledge.
• These jobs usually
require a higher level of
education and are
characteristic to
developed nations.
• Examples: U.S., Great
Britain, Germany
Deindustrialization
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Deindustrialization is when industrial
facilities leave an area, taking the
economic base with them.
• This occurred in places like the Midwest,
Central Britain, the Great Lakes, and Flint,
Michigan.
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Example: Flint’s economic base was in General
Motor’s automobile industry. It moved to Mexico for:
1)Cheaper Labor, 2) Flexible environmental
regulations, 3)Inexpensive Land, and 4) Enticing tax
breaks. Because of this the economy went into a
slump. This par of the Midwest is now known as the
Rust Belt.
Deindustrialization Continued
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When one region’s economic gain translate into another’s
economic loss it called the backwash affect also know
deglomeration when a firm leaves a region for to start up
in a distant place.
One of the main reason firms began to move is because of
the time-space convergence which is when the absolute
distance between to places decreases because of the
increase in technology and communication.
While deindustrialization was hurting some
regions other were experiencing a different kind
of economic rev or “high tech boom”.
With the rise of this new economy, nations
became transnational or MNC’s (Multi National
Corporations).
• The rise of these new transnational nations was
attributed to the advantages of production in periphery
nations.
Deindustrialization Continued
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Export-processing zones were also created
through deindustrialization. These zones
wer designated for manufacturing, and
were often accessible for distribution, and
worked well with the 5 advantages to
production in periphery nations.
• In North America NAFTA was created in 1994
as a result of deindustrialization. This
agreement allowed for free trade between the
U.S., Canada, and Mexico. This brought
economic growth and rising standards of living,
which also strengthened the rules and
procedures governing trade and investment.
Shifts in Manufacturing
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Heavy industries were limited to N.
Europe, E. Asia, N. America, Britain,
France, Russia, Germany and Japan.
These countries were known as industrial
countries.
• The geography of industrial production
has shifted from core nations to periphery
nations.
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Many firms have relocated their factories
to less-developed nations where it is
cheaper to produce goods. For example
when Multinational Corporations moved
their factories to Mexico called
Pre-industrial World
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Industrial development did not being
with the Industrial Revolution. It
began during that period and
diffused from certain areas of
innovation to other parts of the
world.
Industrial Revolution
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During the 18th century, European markets were
growing and there was not enough labor to keep
pace with local or overseas trade.
Better machines were needed
the steam-driven engine was invented called the
power loom, which revolutionized the weaving
industry
Affected transportation and communication
. The 1st railroad was opened in 1819.
The Industrial revolution diffused eastward.
Weber’s Least Cost Theory
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Transportaion: The site chosen must entail the
lowest possible cost of moving raw materials to
the factory and finished products to the market.
Labor: the availability of cheap semiskilled labor.
• Low price goods
• and low-wage workers.
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Agglomeration: happens when a substantial
number of enterprises cluster in the same are in
a large industrial city that can provide assistance
to each other through shared talents, services
and facilities.
Shifts in Manufacturing Continued
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Wealthier nations were shifting to
information and service-based economies.
• Their focus was on research and development,
marketing, tourism, sales and
telecommunications.
• These jobs generally provided better pay, safer
working conditions, less pollution, and higher
standard of living. Yet, they required more
education.
• Newly industrialized countries include: Mexico.
China, and Malaysia.
Impact of other Variables on
Economics
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Infrastructure
Energy
Government