Oh Industry
Industrialization and Economic Development
-the past 300 years
Industrialization
That is the process of economic activities on the
earth’s surface evolved from producing basic goods
to using factories to mass produce goods for
consumption
Industry is Secondary Economic Activities: those that
transform raw materials into usable products-useful
Involves advanced sources of energy
Machinery
Specialized labor
Involve both assembly, processing, and distribution
Economic Development
Were talking about improving material conditions of
people through diffusion of knowledge but MOSTLY
technology
Primary Sector
Secondary Sector
Tertiary Sector
Newly industrializing countries-between MDC and LDC
Compressed Modernity-rapid economic and political
change that stabilizes a country (South Korea)
Economic Indicators
Gross Domestic Product and GDP Per Capita
20 K for MDCs and 1 K for LDCs
Differences between MDC’s and LDCs
Types of Jobs
Worker Productivity (value added)
Access to Raw Materials
Availability of consumer goods
There are strong correlations between economic development
and social development (literacy, education, healthcare)
Theories of Economic
Development
Modernization (Westernization) Model: to be
successful follow model of industrialized nations
Tradition greatest barrier to economic development
Dependency Theory: global poverty is the fault of
rich nations and their historical and contemporary
exploitation of LDC’s.
Marxism-class theory
Rostow’s Theory:
Extension of Modernization Theory
4 Stage Theory
Traditional Stage
Take-off Stage
Drive to Technological Maturity
High Mass Consumption
Modernization Theory encourages LDC’s to control
population growth, increase food production, and take
advantage of industrial technology.
Wallerstein’s Capitalist World
Economy-Outgrowth of
Dependency Theory
Divided by role in global economy (role determined
by colonial period dominated by Europeans)
Core Countries-rich nations that fuel world economytake raw materials from around the world (starbucks
coffee commercials)
Countries of the Periphery-poor nations, continue to
support rich nations with raw materials, inexpensive
labor, market to buy products
Countries of the Semi-Periphery-between poor and
rich, still dominated by Core
A Brief History of
Industrializtion
Britain-coal-steam engine-textiles-the rest of Europemass production-North America-more inventionsNew York port
After WWI-industry needs fuel/energy starts
exploring periphery for it-America most successful
Location Theory of
Industry
Primary Industry-develops around location of natural
resources but when transport improves
Secondary Industry-develops without dependence on
resource location
Variable costs-energy labor transport less expensive
Friction of distance-costs go up as distance from
source increases
Distance decay-industries are more likely to serve
markets nearby
Weber’s Least Cost Theory
of location of industry
Location of Industry influenced by 3 factors
Transportation-site chosen partly based on cost of
moving raw materials to factory to market
Labor-cheap labor may allow an industry to make up
for higher transport costs
Agglomeration-if several industries cluster in a city,
they can provide supporting services (truck factory,
furniture company, restaurant)
Can backfire and cause deglomeration-exodus from an
areas
Locational
Interdependence Theory
Dependent on locations of competition
Variable Revenue Analysis-a company’s ability to
capture a market that will earn more customers and
money than competitors
Ice Cream on the Beach
Situation and Site
Remember them?
Situation factors of development: mainly deal with
transportation (locate factory as close as possible to
buyers and sellers)
Bulk Reducing-copper heavy expensive to transport
closer to factory
Bulk Gaining-canned food and beverages, weigh more
after processed closer to market
Single Market-clothing cluster near market (buyers)
Situation and Site
Remember them?
Site factors are particular to a specific geographic
location and focus on varying costs of land, labor and
capital
Climate, land costs, access to cultural or sporting
events, labor costs, willingness of banks to invest
Globalization
patterns and impact of industrialization
Factories are still placed in places that have hard
infrastructure (if not some industries may invest because
labor is so inexpensive)
Industrial Regions of the World:
Primary Industrial Regions (areas w/largest agglomerationcalled the Industrial Belt)
Western and Central Europe
Eastern North America
Russia and Ukraine
Eastern Asia (Japan, China, Singapore, South Korea, Hong
Kong, Taiwan)
Globalization cont.
Secondary Industrial Regions:
Venezuela
Argentina
Brazil
South Africa
Nigeria
Coastal Areas of India, Malaysia
Southern Austrialia
Let’s talk about Mexico
The US, Canada, and Mexico have a special
relationship that allows for free trade among the
three countries called NAFTA North American Free
Trade Agreement
On the border between US and Mexico regions called
Maquiladora-workers produce goods primarily for US
consumers in US based plants
Mexico faces a dilemma-Maquiladora jobs taken
elsewhere where labor is even cheaper (Mexico to China)
What about outsourced
India?
India has some advantages
Government policies encouraging industrialization
Growing urban centers
Hydroelectric potential, coal, iron ore
Large labor force
Midway between Europe and Pacific Rim
Global access to Information Technology
Outsourcing jobs (call centers)
Tertiary sector growth
Globalization equals
global inequality?
Industrial Revolution set in motion global inequality
Increasingly global economy provides challenges for
all countries both MDC’s and LDC’s
Challenges for MDC’s
Trading Blocs-trade among countries
North America, EU, East Asia
Transnational Corporations and Conglomerate
Corporations
Deindustrialization (decreasing manufacturing)
Globalization equals
global inequality?
Challenges for LDC’s
Distance from Markets
Inadequate infrastructure
Competition with existing
manufacturers in other countries
Transnational corporations set up low
cost jobs in LDC’s-keeps global
inequalities in place
Industry and the
Environment
Coal replaces wood as leading source of energyNew energy: coal, petroleum and natural gas will run
out (fossil fuels)
Fossil Fuel reserves
Proven-discovered not extracted
Potential-undiscovered
Petroleum is being consumed faster than it is being
found
MDC’s with ¼ world’s population consume ¾ world’s
fossil fuels
Industry and the
Environment
Industrial Pollution
Air, H20, Land
Global Warming-reduce ozone layer, world gets hotter
Called the Greenhouse effect
Acid Rain-sulfur dioxide nitrogen released into air by
burning fossil fuels
Get into lakes and streams
Sustainable development
Environment cannot sustain industrial demands on it
Current populations should not impair future ones
Possible Solutions to
Environmental Problems
Prevention-changing governmental policies
Technological change-pollution capturing filters for
industrial runoff and recycling of industrial wastes
Alternate energy sources-wind, solar
Mitigation-reduce damage by replacing or cleaning
Compensation-political bodies could compensate
companies and industries who are more responsible
in practices and business