CHAPTER 27: DEINDUSTRIALIZATION AND THE RISE
OF THE SERVICE SECTOR
CHAPTER OUTLINE
I.
II.
Introduction
Categories of service industries
A. Origins of manufacturing boom
1. Trace to the mass-production assembly line pioneered by Henry Ford
2. Fordist—name given to Henry Ford's assembly line production technique
3. End of World War II began to challenge the Fordist order
4. Sharp rise in oil prices in the 1970s caused increasing difficulty for core industrial
regions to sustain competitive advantage
a) Movement toward mechanization
b) Development of service and information industries
5. Service sector is broken down into three categories
a) Tertiary industries
b) Quaternary industries
c) Quinary industries
6. With the approach of World War II, the quaternary sector began expanding rapidly
7. During the last three decades the quaternary and quinary sectors have experienced
very rapid growth, giving greater meaning to the term postindustrial
III. Geographic dimensions of economic activity
A. Wealthier industrial regions were the most successful in establishing a postindustrial
service economy
1. Deindustrialization did little to change basic disparities between core and periphery
2. Even in the manufacturing realm, mechanization and innovative production
strategies allowed core industrial regions to retain their dominance
3. Dominant manufacturing cores have experienced economic changes associated
with economic shifts
4. Pockets of significant hardship within core areas
5. Example of Britain
a) Some aging plants still operating
b) Decline in the manufacturing cities of the Midlands and northern England
c) Industrial enterprises tend to relocate near London near the greatest domestic
markets
d) Closing of factories has drastically reduced the tax base of many areas
B. The new international division of labor
1. Countries and regions outside the core that have increased their manufacturing
output most rapidly are shown in Figure 27-1
2. United States and United Kingdom are no longer as significant as they once were
3. Large multinational companies
a) Have constructed vast economic networks
b) Taking advantage of low labor cost have started plants in peripheral countries
4. Research and development activities tend to be concentrated in the core
5. Labor-intensive manufacturing, particularly assembly activities, more likely
located in peripheral countries
a) Cheap labor
b) Few regulations
c) Tax rates are low
6. Trade itself is a tertiary economic activity
a) Patterns of trade vary by industry
b) Dominant flow is among and between core countries, and newly industrializing
countries
c) Level of trade between peripheral countries is low
7. Production of television receivers provides an example of how changing
multinational networks function
8. Discussion of foreign direct investment
9. Expansion of international banking
10. For many countries the cost of servicing their debts has exceeded revenues (Figure
29-2)
C. A Sense of Scale box: Nike and Economic Globalization
D. New influences on location
1. Service industries
a) Many are not tied to raw materials or need large amounts of energy
b) Market accessibility is more relevant
2. Discussion of why tertiary, quaternary, and quinary industries locate where they do
E. Specialized patterns of economic concentration and interaction
1. World cities
a) Have corporate structures and flows of capital that transcend national
boundaries
b) John Friedmann calls world cities the control centers of the world economy
c) May not be the largest in terms of population
d) Figure 29-3 shows their basic pattern of geographic location
e) Discussion of Figure 29-3
2. Specialized economic zones
a) Did not exist before the late twentieth century
b) Special manufacturing export zones in poorer countries
c) High-technology corridors in wealthier countries
d) Such zones are often created in places with easy access to export markets
e) By the early 2000s, more than 60 countries had established such zones
f) High-technology corridors have sprung up in the global economic core
(1) California's "Silicon Valley"
(2) Called technopoles
(3) Other examples and their locations are discussed
g) The drawbacks of high-technology industries
F. Looking Ahead box: The Future of Tourism
G. A service industry giant: tourism
1. Distinctive geographic nature
2. Accounts for some 11 percent of all jobs worldwide
3. Began as incomes and leisure time increased for a rapidly expanding segment of
the population
4. Cruising is one of its fastest-growing segments
5. Tourism has transformed many landscapes around the world
6. Theme parks
7. In 2000, the economic value of goods and services exceeded $4 trillion
IV. Time-space compression and its impact
A. Set of developments that have changed the way we think about time and space in the
global economic arena
1. Offshoot of concept of time-space convergence—reduction in the importance of
distance
2. Technological developments have made possible faster transportation and
communication across significant distances
3. Transition away from a Fordist industrial system to a more flexible set of
production practices
4. Places have been brought closer together in time and space
5. Rise of the World Wide Web
6. Geographical distribution of people with access to network connections closely
mirrors map of "haves" and "have-nots" (Figure 29-4)
B. Discussion of a shrinking world