Unit 6:Industrial and Economic
Development
Chapters: 10,12 and 14
20-22 Days
Unit Concepts
What factors account for uneven economic
development across the globe?
What is the relevance of the growth
theories of economic development?
How has globalization affected labor,
finance and markets around the world?
What does Development Mean?
Development implies “progress”
Progress in what?
Do all cultures view development the same
way?
Do all cultures “value” the same kinds of
development?
Main Points
 Geographically, the single
most important feature of
economic development is that
it is highly uneven.
 Geographical divisions of labor
have evolved with the growth
of the world-system of trade
and politics.
 Regional cores of economic
development are created
cumulatively.
 Spirals of economic
development can be arrested
in various ways.
 The globalization of the
economy has meant that
development is much more
open to external influences.
Per Capita GNI
Patterns of Economic Development
Economic development refers to
processes of change involving the
nature and composition of the
economy.
These processes can involve
three types of changes:
 Changes in the structure
of the regions’ economy;
 Changes in forms of
economic organization
within the region;
Guangdong Province, near Shenzhen
 Changes in the availability
and use of technology within
the region.
Measuring Development
Gross National
Product (GNP)
Measure of the total
value of the officially
recorded goods and
services produced by the
citizens and
corporations of a
country in a given year.
Includes things
produced inside and
outside a country’s
territory.
Gross Domestic
Product (GDP)
Measure of the total
value of the officially
recorded goods and
services produced by the
citizens and
corporations of a
country in a given year.
Gross National
Income (GNI)
Measure of the
monetary worth of what
is produced within a
country plus income
received from
investments outside the
country.
** Most common
measurement used
today.
Gross National Income Per Capita
GNI per capita is one of the best single measures of economic
development.
Issues with Measuring
Economic Development
All measurements count the:
Formal Economy – the legal economy that
governments tax and monitor.
All measurements do not count the:
Informal Economy – the illegal or uncounted
economy that governments do not tax or keep
track of.
Other Ways of
Measuring Development
 Occupational Structure of the Labor Force
 Productivity per Worker
 Transportation and Communications
Facilities per Person
 Dependency Ratio
Dependency Theory
The political and economic relationships between countries
and regions of the world control and limit the economic
development possibilities of poorer areas.
-- Economic structures make poorer countries
dependent on wealthier countries.
-- Little hope for economic prosperity in poorer
countries.
Stages of Economic Development
According to Walt Rostow’s view, now
regarded as overly simplistic, places and
regions can be seen as following parallel
courses within a world that is steadily
modernizing.
Three Tier Structure
Core
Periphery
Processes that incorporate higher
levels of education, higher
salaries, and more technology
* Generate more wealth in the
world economy
Processes that incorporate lower
levels of education, lower
salaries, and less technology
* Generate less wealth in the world
economy
Semi-periphery
Places where core and periphery
processes are both occurring.
Places that are exploited by the
core but then exploit the
periphery.
* Serves as a buffer between core
and periphery
Barriers to Economic Development
Low Levels of Social Welfare
Trafficking
Foreign Debt
Structural adjustment loans
Political Instability
Widespread Disease
Malaria
Process of Regional Economic Growth
 Geographical path dependence
 Initial advantage
 External economies
 Localization economies
Regional Economic Decline
 Spread effects
 Import substitution
 Deindustrialization
The Global Assembly Line
 Transnational corporations
 Conglomerate corporations
< The annual sales figures of many of the
world’s largest corporations exceed the
Gross National Income of some countries.
Toyota’s Global Assembly Line
Toyota’s global production strategies
Flexible Production Systems
The strategies of transnational corporations are an
important element in the transition from Fordism to NeoFordism in much of the world.
 Fordism
 Neo-Fordism
 Flexible production systems
 Just-in-time production
Industry and Services
Chapter 12
Industrial Revolution:
a series of inventions that brought new uses
to known energy sources, new machines to
improve efficiencies and enable other new
inventions.
eg.
steam engine
iron smelting
water pump
Beginning of Industrial Revolution
When and where did the industrial
revolution begin?
In Great Britain in the mid to late 1700s
Why Great Britain?
Flow of capital
Second agricultural revolution
Mercantilism and cottage industries
Resources: coal, iron ore, and water power
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
Diffusion of
Industrial
Revolution
Location Theory
Location Theory – predicting where
business will or should be located.
Considers:
- Variable costs
- Friction of distance
Location Models
Weber’s Model
Manufacturing plants will
locate where costs are
Hotelling’s Model
the least (least cost
Location of an industry
theory)
cannot be understood
Theory:
without reference to
other industries of the
Least Cost Theory
same kind.
Costs: Transportation,
Theory:
Labor, Agglomeration
Locational
interdependence
Losch’s Model
Manufacturing plants
choose locations where
they can maximize profit.
Theory:
Zone of Profitability
Losch’s Model
Zone of Profitability
Major Manufacturing
Regions of North America
Major Manufacturing Regions of Russia
Major Manufacturing
Regions of East
Asia
Post-Fordist
Fordist – dominant mode of mass production
during the twentieth century, production of
consumer goods at a single site.
Post-Fordist – current mode of production
with a more flexible set of production
practices in which goods are not mass
produced. Production is accelerated and
dispersed around the globe by
multinational companies that shift
production, outsourcing it around the
world.
Time-Space
Compression
Through
improvements in
transportation and
communications
technologies, many
places in the world
are more connected
than ever before.
Time-Space Compression
Just-in-time delivery
rather than keeping a large inventory of
components or products, companies keep
just what they need for short-term
production and new parts are shipped
quickly when needed.
Global division of labor
corporations can draw from labor around
the globe for different components of
production.
Deindustrialization
This derelict steel mill in New Jersey is testament to the downward economic spiral.
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
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 offices 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.
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.
Offshore –
Outsourced work that is
located outside of the country.
Globalization and the
Geography of Networks
Chapter 14
What is Globalization?
A set of processes that are:
A set of outcomes that are:
- increasing interactions
- deepening relationships
- heightening
interdependence
- unevenly distributed
- varying across scales
- differently manifested
without regard to
country borders.
throughout the world.
Globalization
Geographer Andrew Kirby explains that
with globalization, we are living “not so
much in a world without boundaries, or in
a world without geography – but more
literally, in a world, as opposed to a
neighborhood or a region.”
Networks
Manuel Castells defines networks as “a
set of interconnected notes” without a
center.
Time-Space Compression
Global Cities
World Cities most Connected
to New York City
This map shows the 30 world cities that are the most connected to
New York City, as measured by flows in the service economy.
Networks in Development
Nongovernmental Organizations (NGOs)
have created a web of global development
networks.
Participatory Development – idea that locals
should be engaged in deciding what
development means for them and how to
achieve it.
Gets back to “What is development and how do we
measure it?”
Nongovernmental
Organizations (NGOs)
entities that operate independent of state and local governments,
typically, NGOs are non-profit organizations. Each NGO has its own
focus/set of goals.
Microcredit program:
loans given to poor
people, particularly
women, to
encourage
development of
small businesses.
Dollarization –
Abandoning the local currency of a country and adopting
the dollar as the local currency.
El Salvador went through dollarization in 2001
Maquiladora Centers
Cheap labor and tax breaks for firms manufacturing and assembling good for reexport have made many Mexican border towns attractive to U.S. companies.
Globalized Office
• Institutionalization of savings; large pools of capital
• Banks with overseas branches (i.e., OPEC)
• Print more money, causing inflation
• Governments lift restrictions and regulations in banking and finance
• U.S. trade deficits (the debt ceiling has been raised to $9 trillion)
• “Hot” money is globally laundered
A call center in Bangalore, India
Hyundai Maquiladora, Tijuana, Mexico
Government-created Island of Development
Malaysian government built a new, ultramodern capital at
Putrjaya to symbolize the country’s rapid economic growth.
Corporate-created Island of Development
The global oil industry has created the entire city of
Port Gentile, Gabon to extract Gabon’s oil resources.
Networks in Media
Vertical integration – a corporation that has
ownership in a variety of points along the production and
consumption of a commodity chain.
eg. Media Companies
Goal is synergy, the cross promotion of
vertically integrated goods.
Networks in Media
Networks of Retail Corporations
Horizontal integration – ownership by the same
firm of a number of companies that exist at the same
point on a commodity chain.
eg.
The Gap (Banana Republic, Old Navy)
Global retail corporations have more connections to
the local around the world than global manufacturing
corporations. Retail stores create a local presence.
Identities in a Globalized World
Identity – how we make sense of
ourselves
We have identities at different scales.
Globalized networks interlink us with flows of
information and global interaction.
In a globalized world, a growing number of
people are “making sense of themselves” within
the context of the globe.
Personal Connectedness
When a tragedy occurs somewhere in the
world, people have the desire to:
 personalize it.
 localize it.
In the process of personalizing and localizing a
tragedy, a new global awareness can be
created.
Personal Connectedness
When a death or tragedy happens, how do
people choose a local space in which to
express a personal and/or global sorrow?
Short term = spontaneous shrines
Longer term = permanent memorials
Landscapes of
Violence and Tragedy
Geographer Ken Foote draws from
extensive fieldwork to understand how
Americans memorialize tragedy.
Arlington National Cemetery (right)
where thousands came
to pay respects to Jacqueline Kennedy
Onassis, who had recently died.
The Process of Memorializing Place
Whether and how quickly
a place is memorialized
depends on:
 funding
 debate over what to
build
 who to remember
 whether people want to
remember the site