Chapter 11
“Industry”
Industry – Manufacturing of goods in a factory
Money - People – Raw Materials – Machines - Product
Past - Cottage Industry - products made at home
James Watt - Steam Engine - Industrial Revolution
1700 - United Kingdom - Hearth Region - Diffusion to:
1800 - Europe and North America
1900 - Rest of the world
Industrial Revolution Hearths
The Industrial Revolution originated in areas of northern England. Factories often
clustered near coalfields.
•2 main industries diffused with the industrial revolution:
•Iron and Textiles
Iron Industry
•Iron ore is mined - ore is melted (smelted) - pour iron
into molds that can be transported - now called Pig Iron
•Pig iron is shipped to be re-melted into something
useful
•If iron needs to be purified - called rolling or puddling
•Could be used to make steel with addition of Coal
•Coal - bulky so factories located near the coal and iron
ore mines
•Engineering became an important field - hundreds of
new machines were invented to create products
•Transportation took on a new meaning - canals and railways
were built to transport: people, products and raw materials
•Economics was developing
Textile Industry
•Spinning yarn - turns the short threads from cotton plants into
continuous yarn needed to weave cloth. Carding is the
untwisting of the fibers prior to spinning.
•A lot of energy was needed - more than humans could supply
- along comes the Steam Engine
•All processes to make cloth could now be housed in one
building - The Factory
•Bleaching and Colouring was in demand - Chemicals!
•Chemicals were created to colour Cotton and Wool
•Later comes synthetic cloth - Dacron, Orlon and Nylon
Food Processing
•Preserving food was the key
•In the past - dry it, ferment it, pickle it
•1810 - boiling and then canning first with glass then with tin
now with aluminum
Industry is concentrated in four main areas of the world
North America
•North east US - Boston (cotton), New York (financial),
Buffalo (food processing), Pittsburgh (steel), Detroit
(automobiles)
•South east Canada - Great Lakes (steel, textiles, food
processing) - helped also by power from Niagara Falls
•Today industry is moving South and West
•South - ‘right to work’ states - no unions - Texas
•West - Technology - computers - Silicon valley, L. A. San
Francisco and San Diego
Western Europe
•Rhine-Ruhr Valley - iron and steel - Rotterdam
•Mid-Rhine - Finance and Commerce - cars
•United Kingdom - Iron and steel
•Northern Italy - Po river, textiles
Eastern Europe
•Moscow - Central Industrial District - textiles
•St. Petersburg - shipbuilding
•Eastern Ukraine - coal and steel
•Ural mountains - minerals, chemicals
•Kuznetsk - manufacturing, coal, iron and steel
•Silesia - steel
East Asia
•Japan, China, South Korea, Taiwan
•All the above have a large hard working labour force
•High quality goods at a low cost
•Electronics and automobiles
See the following maps!
Manufacturing Regions
The world’s major manufacturing regions are found in North America, Europe, and
East Asia. Other manufacturing centers are also found elsewhere.
Industrial Regions of North America
The major industrial regions of North America are clustered in the northeast U.S. and
southeastern Canada, although there are other important centers.
Manufacturing Centers in Western Europe
The major manufacturing centers in Western Europe extend in a north-south band
from Britain to Italy.
Manufacturing Centers in Eastern
Europe and Russia
Fig. 11-7: Major manufacturing centers are clustered in European Russia and
the Ukraine. Other centers were developed east of the Urals.
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.
Location of Industry
Situation Factors: …
Site Factors: …
Maximize Profit by Minimizing Costs!
A company that obtains all inputs from one source and
sells all products to one customer can easily compute the
optimal location for its factory.
If the cost of transporting the product (output) exceeds
the cost of transporting inputs - then locate near your
customer (market) and so on…..
Situation Factors
Location near inputs
Usually bulky goods, goods that are difficult to transport
because of size, weight, quantity or shape.
Minerals, wood, animals
Eg. Copper - heavy and bulky
Bulk Reducing Industry - …
Steel and iron ore are also bulk reducing. These need to be
near large energy sources as well.
Because of this Mini-Mills have been set up. These deal
with scrap metal and can be located near markets.
Location near markets
Bulk Gaining Industry - …
Eg. Soft Drinks - empty cans or bottles are brought to the
bottler and filled and then shipped
Water is another but it is available near the customer
Empty containers have volume but gain weight when
product is added.
Electronics are Bulk Gaining as well as automobiles. Make
parts and then assemble near your market. The US
automobile industry is today locating in the middle of the US
to distribute both to the West and East of the US
Agglomeration
(Alfred Weber) - …
Agglomeration - note how the parts plants locate
near the assembly plants.
Hosiery and Sock Production
Hosiery manufacturers usually locate near a low-cost labor force, such
as found in the southeastern U.S.
Knit Outerwear Manufacturing
Knit outerwear requires more skilled workers, and much manufacturing is
still clustered in or near New York City.
Electronic Computer Industry
Computer and parts manufacturing requires highly skilled workers and
capital. It is clustered in the Northeast and the West Coast.
Single Market Industry
•High style fashion - New York, Paris, Rome
•Buyers converge to these cities
•Where the buyers come to you - Airline industry, Video
gaming - exhibitions and conventions
Just in time manufacturing - …
Perishable Products
•Rapid transportation
•Very near markets
•Eg. Food, milk, eggs, bread
•This is where frozen foods, canned foods, preserved
foods make locating away from market possible.
•Fruit - picked while still ripening - ripen during transport.
•Newspapers are perishable and locate near markets Effect of Internet
•Newspapers can now go National and do not have to be
local since they can be read by a wide audience on the
Internet.
Ship, Rail, Truck, Air???
The further something is shipped the lower the cost per
KM.
Trucks - short distances (relative), door to door service,
easy to unload
Trains - longer distances and bulkier goods
Ships - Cheapest, very long distances, must be used to
cross the oceans and some seas, very bulky good.
Air - fastest, most expensive, only high value goods,
consumer pays dearly for air transport
Break of Bulk Points
…
Discuss how containers changed transporting of goods!
Site Factors
Land, labour and Capital
Japan’s economic growth depends on Site not situation.
Japan has no raw materials.
Land
Factories - urban, suburban, rural locations
Factories - …
Labour
Labour cost is a high expense
Skilled and unskilled
Unskilled
Textile and Clothing
Spinning the cotton is located near the crop - Situation
Weaving is labour intensive so it locates near the market site
LDCs supply unskilled labour - low labour costs out way
the cost of transportation
Skilled labour
Education and training is required
Industries concentrate near cities with major universities
---------------------------------------------------------------------------Fordist - …
Post-fordist - …
Capital
Location near banks to borrowing money
Publicly owned companies near stock market
Finance companies and insurance companies locate in
cities with a well established banking system
Cities and even countries offer financial incentives like
tax-breaks, grants, low-cost loans to attract industry.
Honda
Selects
a
Factory
Location
Page: 353
Site Selection for Saturn
GM considered a variety of economic and geographic factors when it searched
for a site for producing the new Saturn in 1985. The plant was eventually located
in Spring Hill, TN.
Companies do not have to follow an ‘Optimum Location’
plan
Footloose industries …
Work at home industries - called Cottage industries
Personal preferences - owner decides to locate where he
was born, went to school or location has an historical
significance - Microsoft in Seattle - Bill Gates was born
there
You can do a lot of business through Fax or email
The internet has created Footloose industries
See the last slide
Problems that industries face
Global supply is greater that global demand
•In the past  industrial growth  increase in pop.  increase
demand  increase production  increase in pop again
•Today - …
•TVs, phones, computers - invent a new gimmick every couple
of months
•TV - HD - Blu-ray? – Flat Screen or LCD or Plasma?
•Phones - blue-tooth, GPS, iphone, mp3, movies
•Computers - Dual core
•Gaming - PS 2 to PS 3, xbox to xbox 360 - add-ons - Guitar
hero, rock band, new online maps
•Price Drop of consoles and games, online gaming
•Anything to increase sales and pro-long the life span of the
product
•Today we pay more for quality and expect the product to last
longer
•Since we pay a lot we tend to hang on to a product longer as
well
Increased capacity to produce products has increased
worldwide
•…
•…
•…
•…
•…
•…
•…
Trading Blocks
•…
•…
•…
•…
Globalization?
•…
•…
•…
•…
•…Supranationalism
•This movement brings countries together for a common goal.
Sometimes this is called a Centripetal Force. Centripetal
forces can be a major event that makes a country rally around
- 911, Olympics etc.
•When there is a movement to disband or break up a country
or a region (eg. Quebec) we call this movement Devolution or
it is considered a Centrifugal Force. Centrifugal forces can
involve war, civil unrest, protests etc.
Regional Disparities - MDCs
…
Europe - Northern Italy - rich, Southern Italy - poor
- France - Paris region - rich, South and West - poor
Canada - Ontario, Quebec, B.C., Alberta - rich, Maritimes - poor
USA - Northeast - rich, South - poor
There are incentives now to locate industry in these regions to
spread the production around so to speak
Casa Del Mezzogiorno - help southern Italy
Magiladora - Mexico/USA - a little different
LDC problems
Africa, Asia and Latin America - shift from agricultural
economies BUT some old problems
1. Distance to markets - …
2. Inadequate infrastructure - …
There are no new markets to sell to. They have to sell to
themselves.
Key - Attract Trans-nationals with 1. Access to Raw
Materials and 2. Offer cheap abundant labour
New International Division of Labour
How has the internet changed the way industries
do business and locate?
Think of shopping and ordering on-line.
Think of downloading.
Is the ‘store’ becoming obsolete?
What is a distribution center?
What happens to the cost of the product is
purchased on-line? Eg. Purchasing books on-line.
Transportation is key and who pays for shipping?
Vocabulary List
Outsourcing
Ozone depletion
Plant location (supplies, “just in time” delivery)
Postindustrial
Refrigeration
Resource crisis
Resource orientation
Special economic zones (China)
Specialized economic zones
Substitution principle
Threshold/range
Time-space compression
Topocide
Trade (complementarity)
Transnational corporation
Ubiquitous
Variable costs
Weber, Alfred
Weight-gaining
Weight-losing
World cities
Industrialization
Acid rain
Agglomeration
Agglomeration economies
Air pollution
Aluminum industry
- (factors of production, location)
Assembly line production/Fordism
Bid rent theory
Break-of-bulk point
Canadian industrial heartland
Carrier efficiency
Comparative advantage
Cumulative causation
Deglomeration
Deindustrialization
Economic sectors
Economies of scale
Ecotourism
Energy resources
Entrepôt
Export processing zone
Fixed costs
Footloose industry
Four Tigers
Greenhouse effect
Growth poles
Heartland/rimland
Industrial location theory
Industrial regions (place, fuel source, characteristics)
Industrial Revolution
Industry (receding, growing)
Infrastructure
International division of labor
Labor-intensive
Least-cost location
Major manufacturing regions
Manufacturing exports
Manufacturing/warehouse location
- (industrial parks, agglomeration, shared services,
zoning, transportation, taxes, environmental considerations)
Maquiladora
Market orientation
Multiplier effect
NAFTA