Industry
APHG
Spring 2015
Industrialization
• What is it?
• Where?
• Why?
• Why care?
What 2 things were needed in order to
manufacture products at the beginning
of the Industrial Revolution?
1. Close access to raw materials
2. Ability to move materials
(waterway)
Why big cities like London and Paris?
Is this true today?
Would you add any other factors?
Economic Classification
• Production / Consumption / Distribution
• Sectors
– Primary
– Secondary
– Tertiary
– Quaternary
Industrialization is the
process by which economic
activities evolved from
producing primary goods to
factories that mass-produce
goods.
5
Western
European
Nations and
the US
followed
Britain
Britain
Industrializes
Wealth
became a sign
of virtue
instead of
kinship.
6
The Industrial Revolution
• Pre-Industrialization: what did
the Revolution change?
– People had made goods for
thousands of years before IR
• things made slowly (low
productivity), all by hand
• workmen handled all
facets of production >
different quality goods
• guilds created production
standards, but prices were
high
Before the Industrial Revolution
There were industrial centers before the late
18th Century but it was isolated. Most industries
were cottage industries.
Examples:
Chinese Silk Factories
Metal Workshops in India
8
The Early 18th Century
Early factories in Great
Britain during the 18th
Century were run by
water running down
slopes.
9
The Most Important Invention
In 1769, James Watt built
the first efficient steam
engine. This was the most
important invention to the
Industrial Revolution.
10
Assembly Line Production
• 1920’s
– Henry Ford
– Assembly Line Production
– Interchangeable parts
– Mass Production
• Division of Labor
New Industrial Concepts
• International Division of Labor
• Just in Time Production
Time-Space Compression
• Just-in-time delivery
rather than keeping a large inventory of
components or product, companies keep just
what they need for short-term production and
new parts are shipped quickly when needed.
Two issues can result from reliance on just-intime delivery: labor unrest and “Acts of God”
• Global division of labor
corporations can draw from labor around the
globe for different components of production
This labor can be skilled or unskilled.
Current Industrial Patterns
• Develop faster / Richer?
• Levels of Development
– Material condition of people
– Everywhere / some level of development
Great Britain
Diffusion of the Industrial
Revolution
Belgium/France (late 1700s)
The United States (1790s)
Most of Europe came late to the party
because of revolution and strife (ie. French
Revolution, Napoleonic Wars)
Italy, Netherlands,
Russia, Sweden
(late 1800s)
The United States entered the IR later
than Belgium and France but
expanded more rapidly.
The Middle East and Africa
entered the IR because of WWI
and the need for oil.
Asia, Middle East and Africa
(Mid 20th Century)
16
Why do you think that some places
were affected by industrialization
while others were not?
18
Diffusion to Mainland Europe
• In early 1800s, innovations diffused into mainland
Europe.
• Location criteria:
• proximity to coal fields;
• Connection via water to a port
• Flow of capital
Later Diffusion
•In late 1800s, innovations diffused to some regions
without coal.
•Location criteria:
•Access to railroad
•Flow of capital
Industrial Regions
The world’s major manufacturing regions are found in North America,
Europe, and East Asia. Other manufacturing centers are also found
elsewhere.
Industrial Areas in Europe
Industrial Areas in North America
Manufacturing Centers in East Asia
Many industries in
China are clustered in
three centers near the
east coast. In Japan,
production is clustered
along the southeast
coast.
What is the hearth?
What is diffusing?
What historic patterns can you identify?
EXIT SLIP:
1. Why was Great Britain the first country to become
industrialized?
2. What changes occurred with the steam engine, new
machinery, and the factory system?
MUDDY WATERS…
What idea/concept did you not understand from today’s
lesson?
Can you predict where a factory
should locate?
• What is the goal of any factory?
Profit = Price - Costs
• Assuming:
– Labor cost the same and is available anywhere
– There is only one market
– Topography is flat
– Transportation costs are a direct result of weight
• Where would you put a factory?
Primary Industry
• Develops around
natural resources.
Secondary
Industry
• Develops as
transportation
improves.
• Less dependent on
location
27
Variable
Costs
Secondary
Industry
Locations
Distance
Decay
Friction
of
Distance
28
Situation Factors
•Transportation Issues
•Bulk-Gaining, Bulk Losing
Site Factors
•The cost of Land, Labor, and Capital
•Climate
•Access to Amenities
29
Situation factors
• Inputs
– Heavy, bulky, fragile – locate near the inputs
• Known as Bulk-reducing
• EX. Copper, steel, canned tomatoes
• Outputs
– Heavy, bulky, fragile – locate near market
• Bulk-gaining
• Beer, glass, concrete
Transportation Factors
• Methods
– Ship (ocean, lake, river)
• Very Low cost, very slow, long-distance, nonperishables
– Rail
• Low cost, slow speed, long/med. Distance
– Trucking
• High cost, mod to high speed, any dist., very flexible
– Air
• Very high cost, very high speed, med/long dist.
– Pipeline
• Very low cost, LIQUIDS!
Types of Transportation
Mode of
Transportation
Advantages
Disadvantages
Trucks
•Can go anywhere there are roads
•Fair amounts, large distance,
relatively quickly
•Weather Delays
•Traffic
•Fossil Fuels
•Maintenance
Trains
•Efficient and Cost-effective
•Immense amounts long distances
•Inflexible routes
•Break-of-bulk points needed
•Can’t cross oceans
Airplanes
•Fastest means
•High flexibility
•Most expensive
•Break-of-bulk points needed
•Weather delays
Pipelines
•Highly efficient ways to move liquid
and gas
•Very safe delivery method
•Limited to gas and liquid
•Expensive to build
•Costly to move a pipeline
Ships
•Most energy efficient
•Slowest method
•Need access to waterway
•Break-of-bulk points needed
•Weather delays and Port costs
Site factors
• Physical characteristics of a place.
• Different industries have different needs.
• Availability and cost of:
– Land (lg areas – Airplane manufacturing)
– Power (lots of electricity or fuel – Aluminum)
– Labor (unskilled – electronics, skilled –
research/dev)
– Capital (Money, money, money…money!)
• Footloose Industries –
– Can locate anywhere (Diamonds, computer chips
- YUMM)
Location Models
Weber’s Model
Manufacturing
plants will locate
where costs are the
least (least cost
theory)
Theory:
Least Cost Theory
Costs:
Transportation,
Labor,
Agglomeration
Hotelling’s Model
Location of an
industry cannot
be understood
without reference
to other industries
of the same kind.
Theory:
Locational
interdependence
Losch’s Model
Manufacturing plants
choose locations
where they can
maximize profit.
Theory:
Zone of Profitability
http://ed.ted.com/lessons/why-do-competitors-open-their-stores-next-to-one-anotherjac-de-haan#watch
Weight
Reducing
Industry
Resource 1
Weight
Gaining
Industry
What is this model called?
Weber’s Least Cost Theory
(Industrial Location Theory)
MARKET
Footloose
Industry
Resource 2
Weber’s Least Cost Theory
• Factory Location
– Least Cost to the
Factory / Company
• Assumptions
– Cost of Transportation
• Weight
• Distance
– Maximize Profits
• Minimize Cost
Weber’s Least Cost Theory
• Assumptions
– Markets are fixed
– Labor is fixed
– Uniform Landscape
– 4 Main Drivers
•
•
•
•
Transportation
Labor
Agglomeration
Deglomeration
Weber Key Ideas
• Friction of Distance:
The greater the weight the greater the cost
The greater the distance the greater the cost
The greater the time the greater the cost (think
veggies!)
• Focused on Costs : Variable Costs!
Profit = Price – Costs
Hotelling’s Model
Locational Interdependence
• Variable Revenue:
– Maximize Profits not minimize costs!
Profit = Price – Costs
Find the location that provides the best profit
…and where other industries are located.
Can you create a
Spatial Monopoly?
Losch Model
(pronounced laesch)
• You can look at one point…but maybe a bunch of points
will work.
• And things can change…replace labor with machines?
Increase transport costs but reduce land rent?
Time to apply some theories…
Using Weber, Hotelling, and Losch…
Where would you sell doughnuts in the
morning for OHS?
Use the school map provided.
What is a Post Industrial
World?
What does it look like?
• Tertiary, quaternary, and
quintary sectors.
• Deindustrialization?
• Increasing Mechanization
• Multinational
Corporations
• Post-Fordist Production
• Global Division of Labor
• Global Production Chain
• Can outsource services –
Who prepares the food and
cleans the place?
Where is it located?
 Core countries still
 Sunbelt in US
With Services…what is
more important?
Resources
Markets
Why call centers in India?
What is a high tech
corridor?
(IL Research and Technology
Corridor…Silicon Prairie?)
Why Are Location Factors Changing?
• Attraction of new industrial regions
– Changing industrial distribution within MDCs
• Interregional shift within the United States
– Right-to-work laws
– Textile production
• Interregional shifts in Europe
– Convergence shifts
– Competitive and employment regions
– Changing distributions
– Modern Production
• Outsourcing - moving individual steps in the
production process (of a good or a service) to a
supplier, who focuses their production and offers a cost
savings.
• http://www.metatube.com/en/videos/10420/TheSimpsons-India-Outsourcing/
• Offshore – Outsourced work that is located outside of
the country.
Deindustrialization
• a process by which
companies move
industrial jobs to
other regions with
cheaper labor,
leaving the newly
deindustrialized
region to switch to a
service economy and
work through a
period of high
unemployment
Abandoned street in Liverpool, England,
where the population has decreased by onethird since deindustrialization.
Key Question
What is the Service Economy, and Where
are Services Concentrated?
Service Economy
• Service Industry
• Economic activity associated with the
provision of services – such as transportation,
banking, retailing, education, and routine
office-based jobs.
Geographical Dimensions of the
Service Economy
• New influences on Location:
- information technologies
- less tied to energy sources
- market accessibility is more relevant for
some and less relevant for others because of
telecommunications.
- presence of Multinational Corporations
Wal-Mart
Requires producers of goods to locate office in the Bentonville,
Arkansas (Wal-Mart’s headquarters) area in order to negotiate
deals with Wal-Mart.
Proctor & Gamble
put their office in
nearby
Fayetteville,
Arkansas.
How does the
presence of these
companies in the
region change the
region’s economy
and its cultural
landscape?
Nike
Headquartered in Beaverton, Oregon,. Nike has never
produced a shoe in Oregon. Beginning in the 1960s, Nike
contracted with an Asian firm to produce its shoes.
Skopje,
Macedonia
The swoosh is
ubiquitous, but
where is the shoe
produced?
Nike has a global
network of
international
manufacturing
and sales
High – Technology Corridors
• An area designated by local or state government
to benefit from lower taxes and high-technology
infrastructure with the goal of providing hightechnology jobs to the local population.
eg. Silicon Valley, California
• Technopole – an area planned for high
technology where agglomeration built on a
synergy among technological companies occurs.
eg. Route 128 corridor in Boston