Industry: Introduction and Industrial
Revolution
•Nike example: management and research
(core) vs. production (periphery)
• India, China, Japan established industrial
base long before Europe
•Colonialism allowed Europe to gain control of
India’s (and other places’) raw materials and
markets
•Britain needed mass production to be able to
flood colonial markets with cheap goods
Industry: Industrial Revolution
•First steps in Industrial Revolution:
•1. Improve machinery
•2. New uses for energy sources: using coal to produce
smelt iron and cast iron
•James Watt and steam engine: railroads and steam
ships (gave Great Britain advantage)
•Prior to railroad, manufacturing centers close to coal
fields and connected to ports
•North-central England and major coal belt through
mainland Europe (e.g., Ruhr area of Germany)
•Railroad expanded industrialism to London and Paris
(large markets, labor force, capital flow)
Diffusion of Industrialism
•Primary Industrial Regions by 1950s
•1. North America: started in northeast; large coal
deposits; ability to acquire overseas raw materials
•2. Russia and Ukraine: St. Petersburg region
historically the center; after USSR, Ukraine
annexed (coal rich)
•3. East Asia: Japan imported raw materials from
colonized Korea, Taiwan, China; Kanto Plain and
Kobe-Kyoto-Osaka
Changes in Industrial Production
•Early 20th Century
•Fordist production: supported by politicaleconomic structures and financial orders
•Assembly-line production
•Machines replaced people
•Vertical integration: same
firm owns numerous
companies in commodity chain
Changes in Industrial Production
•Friction of distance: increased time and cost
with distance (NC and furniture example)
•Alfred Marshall: industrial clusters
(localization)
•Alfred Weber: Where industries cluster
•Least cost theory: transportation, labor,
agglomeration (cluster of support businesses)
Changes in Industrial Production
•Post-Fordist: globalism, decreased transportation
•Flexible production systems: components are
made in different global places and brought back
together
•Commodification: goods gain a monetary value
and enter the market
•Product life cycle: changes in production of a
good over time (TV example)
•Three elements of production: R&D, components
manufacturing, assembly
Global Division of Labor
•Global division of labor: R&D in core, labor in semiperiphery/periphery, nothing permanent
•Time-space compression: changes in transportation
and communication accelerated the pace of change
and made distance less of a factor
•Just-in-time delivery: inventory management; keep
enough for short-term production, quick shipping
•Spatial fix: movement of production based on cost
advantages (e.g., opening of special economic zones)
•Outsourced / Offshore: production steps outsourced
to suppliers (offshore if in foreign country)
•Mass consumption still in core
Global Division of Labor
•In global division of labor, greatest benefits go
to management/R&D/stockholders
•Product’s afterlife: recycling, components,
environmental damage
Contemporary Global
Manufacturing
•Transportation: cost lowering, wider
dispersion of consumers
•Availability of transportation alternatives
(intermodal connections)
•Container innovations
•Regulatory Circumstances: international trade
organizations (WTO), free trade, anti-quotas,
anti-protectionism (Neoliberalism, special
economic zones, etc.)
Contemporary Global
Manufacturing
•Energy: coal to gas and oil
•Dependence on foreign fuel supplies (U.S.,
Europe, Japan); use of tankers and pipelines
•U.S. oil production dwarfed by consumption;
pressures for offshore drilling
New Centers of Industry
•Deindustrialization in core areas has led to
new industrializing countries (NICs)
•East Asia: Japan, Four Tigers (Korea, Taiwan,
Hong Kong, Singapore
•Hong Kong is break-of-bulk point: good
transferred from mode of transport to another
New Centers of Industry
•China: planned from start of revolution
•Large labor, low wages, SEZs, force attracts
international companies
•Parts of China are deindustrializing (Rust
Belt), manufacturing moving to interior;
world’s largest exporter
•Wider World: BRICS (semi-periphery)
Deindusrialization
•Led to rise in quaternary (finance,
administration, computer services) and quinary
(research, higher education) industries in core
countries
•Wealthier countries most successful at
postindustrial economies and still dominate
manufacturing
•Rust Belts: Northeast U.S., British Midlands,
parts of Eastern Europe
•Sun Belt: southern U.S., California, financial
industries, high-tech
New Patterns of Economic Activity
•Energy and market accessibility not as important to
service industry
•Tertiary services in transportation and communication
tied to both production and consumption (but don’t
have to be close to either)
•Restaurants and retail must be close to consumers
•Quaternary services in can be close to (retail banking)
or far from (technical help centers) costumers
•Quinary services near government, corporations, or
universities
New Patterns of Economic Activity
•High-Technology Clusters: SEZ with high-tech
infrastructure that provides high-tech jobs
(Silicon Valley)
•Growth pole: cluster that attracts businesses
and spurs growth in nearby areas
•Technopole: agglomeration of tech
companies
•Often near airports
•Economic benefits, environmental harm
New Patterns of Economic Activity
•Tourism: transformed communities
(downtowns, ports, theme parks, beaches)
•Service industry vulnerabilities:
•tourism / natural disasters
•jobs lost to mechanization (travel agencies /
Internet)
•Globalism and global economics: decisions
made far away affect local areas (housing
crisis)