World Geography 3202
Unit 5: Secondary and Tertiary
Activities
Chapter 13
PATTERNS IN
MANUFACTURING
Introduction to Manufacturing
Three Sectors of the Economy
1. Primary
– Involves the collection or extraction of raw materials from
the earth. Farming, fishing, mining, forestry are the classic
parts or examples of the primary economy.
– The farmer takes plants from the land, the forester takes
trees from the forest, the fisher takes fish from the ocean
and the miner takes ore from the ground.
– All involve collecting natural resources.
2. Secondary
– Involves processing or manufacturing raw
materials into products for people to buy. All the
activities start with a raw material and convert it
to a product for sale.
– It is often referred to as the “manufacturing or
processing” sector.
– There are a multitude of examples for secondary
processing.
– Sometimes referred to as “Value adding”
(Example: the tree would be much less expensive
to buy than the lumber. The processing
(sawmilling) to make lumber has added value).
3. Tertiary Economic Activity
– It involves providing service to people. It is often
referred to as the service industry. Does not deal
with raw materials
– Nurses, doctors, lawyers, teachers, waitresses,
hairdressers, sales people all provide services for
other people. Tourism is an important part of the
tertiary sector.
Manufacturing: A Systems Approach
1. Inputs: materials & factors that go into
making a product (Examples: raw materials,
electricity, buildings, land, labor, capital,
machinery).
• There are two types of inputs:
1. Human: Made by people (i.e. steel)
2. Natural: Nature (i.e. sunshine)
2. Manufacturing Processes: 3 types of processes
that change a raw material to a usable form:
1. Conditioning: minimal change to a resource
(Example: logs into lumber; fish into fillets).
2. Analytical: one resource converted to a number of
different products (Example: cow into leather, milk &
cheese).
• 3. Synthetic: several resources are combined
to make one resource(Example: light bulb has
glass, tungsten, nitrogen and aluminum).
3. Outputs: it is the finished product from a
manufacturing process. For example, the
output from the fish plant is fish sticks or
frozen fish fillets.
Types of Manufacturing
1. Labour Intensive vs. Capital Intensive (Process)
– “Labor intensive”: requires a lot of person hours to
produce the product (Example: jewelry making).
– “Capital intensive”: requires a lot of expensive equipment
to make the product (Example: automotive plant).
– Some manufacturing businesses might be more
difficult to classify because they require large
quantities of both capital and labour.
Labour versus Capital
2. Heavy vs. Light Industry (Output)
– Manufacturing businesses can be classified based
on the output.
– Heavy industry: produces big expensive products
for other industry (Ex. Ship yard, tractor
production).
– Light Industry: produces products for consumers
(Ex. Pop, clothing manufacturing).
• Some manufacturing businesses might be more
difficult to classify because they produce items that
might be used by business or by private people.
Heavy Industry or Light?
Location of Industries
1. Site/Physical Cost Factors
– Three major factors of site (physical location)
a) Proximity to raw material: Heavier & bulkier the
raw material the closer the industry will be
located to the resource to reduce transportation
costs.
• “Resource Oriented Industry”
– industries located close to the resource because it is to
heavy/bulky to transport;
– communities frequently spring up around resource
industries. Labrador City, Churchill Falls, Grand Falls-Windsor
and Bonavista are good examples.
b) Land: price, level, good drainage, dense wellsettled soil
c) Energy: not as important a factor today due to
our ability to transport power long distances.
2. Human-based Cost Factors
– “Market Oriented Industry”
•
Industries that are located close to the market
(people). The inputs are not bulky or heavy, and are
transported near the market for manufacturing. The
soft drink industry is a good example.
– Market vs. Resource Oriented Industries:
•
•
Let’s examine the influence of weight gain & weight loss on
the location of industry
Market Industry:
•
•
•
Smaller parts are shipped and put together for manufacturing.
i.e. Smaller parts are shipped to manufacture lightbulbs, soda
pop, and furniture.
Output (product) weight is greater (weight gain) than the input
resources, therefore, it is located near market.
Resource Industry
•
•
Large, heavy inputs are broken into smaller pieces.
It is too heavy and costly to ship the resource, so it is broken
down. This creates weight loss. If product weight is less (weight
loss) than the input resources, the industry is located near the
raw material or resource. i.e. Logs are sawed into smaller
sections to make lumber.
– Agglomerating Tendency
• Agglomerating tendency refers to factories producing
related products locating close to each other for mutual
benefit (Ex. Auto plants & tire factories).
-
Industrial Parks
• Industrial parks provide many advantages for a
business. Existing infrastructure of roads, on and
off ramps to highways, large building lots, sewer,
ample electricity, and close location to related
industries make industrial parks attractive for
manufacturing businesses.
– Labour force characteristics that attract business
• Wages: lower wages in some developing countries like Mexico, and
the Philippines attract manufacturers
• Training: highly skilled labourers can attract businesses that
require welders, mechanics, carpenters etc.
• Benefits (EI, Pensions etc): lower costs of employment insurance,
pensions , etc. can attract business just as easily as low wages.
• Availability: a high unemployment rate might attract business,
especially if large numbers of workers are required.
3. Government Influence
– Subsidies: affect the location of industry. Subsidies
are financial aid from government
• Subsidies allow businesses to locate farther from the
resource.
• Subsidies allow governments to encourage industry in rural
areas.
Examples:
–
–
–
–
ice breakers in Botwood;
roads in Labrador;
cost of coastal transportation in Labrador;
cost of crossing the Gulf.
– Tax breaks affect the location of Industry.
• Provinces like Newfoundland have attempted to attract
business by offering tax breaks. The company obtains a
financial break while the province gets the advantage
of putting people to work.
4. Industry Location; The Global Picture
– Look at figure 13.6 on page 223 of your text book.
– The highly industrialized areas on the earth's
surface are concentrated in 4 definite regions:
•
•
•
•
North America
Western Europe
Japan
Australia
– Do you see any other patterns?
Activity
– Read the case study "Human and physical factors
in Japan's Car Industry" on pages 227-228 and
complete questions 18 & 19 on page 228 of your
text book.
Industry & Environmental Threats
Industrial Waste
• Industry has waste output as well as product output.
• Three of the many types of waste are outlined below.
– 1.
Green house gasses; ex. Carbon dioxide,
Chlorofluorocarbons & methane. Causes global warming &
associated problems.
– 2.
Acid Rain; ex. Sulfur & nitrogen. Decreases soil
fertility, kills fish, corrodes buildings
– 3.
Breaking down the ozone layer: Refrigerants &
sprays emit chlorofluorocarbons (CFC’s). The ozone layer
protects humans from harmful cancer causing UV rays.
• When we look at the maps on p. 238 and
realize prevailing winds play a role we can see
that pollution does not recognize political or
economic boundaries.
Roles of Stakeholders and
Environmental Threats
It is the extreme views that define the middle.
• Interest Groups: often fill the extremist role.
They raise valid points of concern and argue
them vehemently. (i.e. Greenpeace, World
Wildlife Fund)
• Government: has the role of balancing
environmental concerns & encouraging
economic development.
• Business: Concerned with profit
Averting environmental threats posed industry.
• 1. Take a global perspective:
– Prevailing winds transport acid rain from
industrialized areas.
– The winds are depositing acid rain/pollutants in
locations down wind from the industrialized area.
(i.e Japanese nuclear accident)
– The acid rain map (p. 238), the industrialized
country map (p. 223) and the prevailing winds
map (p. 64) demonstrate this
Actions to Avert Environmental
Threats
• 2. Cooperation and consultation:
– Solutions to industry related problems will have
to be dealt with by between different nations.
– The major environmental summits that have been
held in recent years are examples. The recent
Kyoto summit and Rio de Janeiro summit held
several years ago attempted to get countries to
reduce their carbon dioxide emissions.
• Solutions to solving the acid rain problem
include:
– government regulation to reduce sulfur &
nitrogen emission;
– development of sulfur filtering equipment;
– tax breaks for companies if they reduce pollution
output;
– meetings and consultation between business,
environmentalists and government to decide on a
plan of action.
Moral Issues and Industry
• Moral and social issues are concerned with right
and wrong
• There are many social/moral issues associated
with manufacturing operations.
Examples
include:
–
–
–
–
child labour
safety of workers
fair wages (fair trade)
a company’s responsibility to be environmentally
friendly
• Business drives the economy and provides us
with our high standard of living here in the
western world.
• The question we have to keep asking
ourselves is "are industries acting within the
moral parameters of our society". Are we
taking advantage of others? Are profits put
ahead of people? Environment?
• In Canada, and most well developed nations,
there are strict regulations about safety, wages,
waste emissions, age of workers, and corporate
responsibility.
• In some developing nations the regulations might
not be in place. Or they might be relaxed in the
hope of stimulating business instead of inhibiting
it.
• What are a company’s moral responsibilities?
– Profit versus People
– Profit versus Environment
Video: Sweatshops
• http://documentaryheaven.com/behind-theswoosh/
• “Nike Sweatshops: Behind the Swoosh”
Video: Child Labour
https://www.youtube.com/watch?v=2z5YpSDuV
VU
Tertiary Activity
Tertiary Activity
– It is involved with providing services to people
– Ex. Doctor, lawyer, waitress, banking, tourism,
mechanic, teacher, etc.
Private vs Public Economic Activity
• There are two ways economic activity can be classified.
They are private and public.
– Private tertiary service:
• operated by private business
• requires that a profit be made from the service
• Ex. Mechanics, lawyers, tourism, banks, insurance
– Public tertiary service:
• operated by government (towns, cities, provincial and federal
governments)
• Do not require a profit. Funded through taxes
• Ex. Water and sewer, police, fire protection, highway maintenance
Types of tertiary Activity
– The four types of tertiary activity are:
• 1. Distributive Activities:
– involve the transportation and sale of all products from
manufacturer to consumer
– ex. truck driver, warehouse manager, sales person
• 2. Financial Activities:
– involves banks, insurance companies, financial advising
companies, and trust companies.
• 3. Personal Service:
– involves a wide range of services to individuals
– Ex. legal services, food services, entertainment
counselling services.
and
• 4. Government service:
– operated by government
– not for profit. Actually costs tax payers money
– Ex. Education, health care, mail, water, sewer, roads. Hence
the term public servant
Private or Public Tertiary Service?
• It is important to note that many careers in the
tertiary sector can not be classified as public or
private.
• A teacher can work in the public school system which
is public service, or s/he can work for a private
college, which is private service.
Tertiary Activity
• Two key factors that determine the location of
service industries.
– 1. Market size: services must be located close to a
large enough market to produce DEMAND.
– 2. Price: services are only viable as businesses if
the demand is high enough & the price is
reasonable.
Tertiary Activity and Population
• Is there a relationship between service
available and population?
• Yes! Larger populations support a wider range
of services.
– For example, consider health services, education,
recreation facilities, shopping facilities, hotels, and
restaurants. The range and amount of services
available is directly related to community size.
Tourism –Case Study of a
Tertiary Industry
• Tourism is one of the fastest growing sectors
of the economy. It is also one of the most
profitable.
• If your country happens to be located in a
sunny area, or to have good ski slopes, or to
have cultural attractions, then people will
flock there and spend money.
International Tourism
• From a country’s point of view, international tourism is a good thing
because it is new money coming into the economy.
• International tourism has increased dramatically for 6 reasons:
– 1. people have increased leisure time due to available
technologies;
– 2. retired people have secure incomes and are able to travel;
– 3. people have increased discretionary spending money;
– 4. travel has become easier and less expensive;
– 5. travel agencies have packaged attractive "all expenses paid"
trips;
– 6. advertising has been effective using attractive & exotic pictures.
• Travel agents see that people are usually
looking for one of three different kinds of
vacations:
– 1. Climate oriented (skiing & sun bathing are at
opposite extremes but both rely on climate)
– 2. Landscape oriented (some people like to view
the sites)
– 3. Culture oriented (cultural land marks are of
interest to people ex. Athens)
Quaternary Activity
The quaternary sector of the economy is a
specialized part of the tertiary sector.
– Quaternary activity: refers to data collection and
information processing (i.e. engineering, scientific
research)
– Activities which involve the collection, recoding,
arranging, storage, retrieval, exchange, and
dissemination of information.
– Computers, cell phones, e-mail, and the WWW are
some of the examples of new information technology
which drives the quaternary sector.
Factors Affecting Location of Quaternary
Activity
• 1. People:
– Populations of people concentrated in an area
make the information sector viable. People create
demand
– Historically, information technology like cable TV,
telephones, and radio flourished in areas where
there was a population large enough to support
them.
• 2. Infrastructure
– Infrastructure is required for the communication
of information.
– The infrastructure has been closely linked to
population.
Factors that Account for Patterns in Mass
Communication.
• Mass communications is very closely connected
with economic and industrial development.
• In the emerging “telesphere” of global
communications, there are islands and continents
of activity
• “Telesphere” is the emergence of telephone
lines, data lines, satellites and infrastructure
connecting computers and people all over the
world
• Parts of the world that are economically
developed, have well developed systems of
mass communications
• Parts of the world that are NOT well
developed, do NOT have well developed mass
communication systems
– An advantage the lack of infrastructure might
present for less developed nations is that they are
not tied to the old and outdated infrastructure.
– It might be the time for lesser developed nations
to build infrastructure and increase their share of
the information technology market.
• Key Ideas: Remember!
– The areas of connectivity are closely associated
with development.
– There are deserts or areas where there is no
activity because there is no connectivity. These
places lack necessary infrastructure (i.e. electricity
grids). See the map!
Economic Development and
Communcations
Mass Communication Affecting Workplace
Location.
• As more and more people work in the
information sector, we see a trend towards
reducing urbanization.
• People can live in rural areas and use
communications technology to do their work
• People will not be tied to an office building if
they could work at home. They could work at
home and submit work electronically.
• Remember the “Agglomerating Tendency?”
• Agglomerating tendency is when businesses
providing related products and services locate
close to each other. (i.e. a tire factory locating
near an automobile plant)
• Impacts of improvements in information
technology,
mass
communications
and
infrastructure:
1. Some businesses (and employees) will not need to
be located physically near each other. Key Idea!
2. If Infrastructure improves to the point it overcomes
distances, information technology will be a new
source of employment and economic activity in
rural, depressed regions. Key Idea #2!
Tertiary & Quaternary Activity Trends
• Economists recognize that the tertiary industry has
expanded significantly in the last 100 years.
• The entire tertiary sector is growing and is becoming
a much larger part of the economy of developed
nations.
• In Canada, the tertiary sector has grown from 36% of
GNP to 73% of GNP over the last 100 years.
• As the secondary sector of the economy grew,
there were more people working in urban
areas as manufacturers. The concentration of
people meant there was more need for
services.
• Service industries grew in turn. The people
working in the tertiary industry need services
too so the growth of the service industry
continues.
Standard of Living Indicators
Economic Indicators
• “Indicators" are used to give some measure to
the concept of development.
• Two type of indicators developed by social
scientists: 1. economic and 2. social indicators.
• There is debate over which indicators are a better
measure of development.
• A variety of indicators provide the best way to
determine the level of economic development.
Economic Indicators
• A number of economic indicators provide a
measure of economic development.
• Two of these indicators are:
– 1) Employment Structure
– 2) GNP per Capita
Indicators: 1. Employment Structure:
• “Employment Structure” is the percentage of
people working in each economic sector
• “Developed" countries have been able to
move their economy beyond the primary
sector. Economy is shifted to the secondary
sector, which in turn grows the tertiary sector.
Employment Structure for Country "X"
Primary sector (fishing, farming, mining):
Secondary sector (manufacturing):
Tertiary sector (service):
60%
15%
25%
• Economists would look at country X and realize that it is a developing
country. Why? A majority of people are employed in the primary sector
• Key Idea! A developed country would have a great majority of its workers
in the secondary and tertiary sectors of the economy.
• Note: There is a difference between developing and developed countries
• 1. Developing (poorer) versus Developed (wealthy)
Employment Structure for Country Y
Primary sector
5%
Secondary sector
25%
Tertiary sector
70%
• Economists would classify country Y as a
developed country. Why?
• It has the vast majority of its workers in the
secondary and tertiary sectors of the economy!
GNP per Capita
• GNP refers to the total value of the production of
goods and services in a nation
• The GNP per capita takes the dollar value of all goods
and services produced and divides it by the population.
• GNP per capita = Total value of goods &
services/population
• It is measured over a year, together with any money
earned from investment abroad, less the income
earned within the nation by non-nationals
• It is possible that country X would have a much higher GNP per
Capita.
• The major flaw with GNP per Capita as a measure of standard of
living is that the measure is an average! An average assumes that
the wealth in the country is evenly spread. This is often not the
case.
• For example, if one or two families in the country are very rich and
control most of the money, then many of the people could be living
in poverty even though the GNP per capita is high.
• Look at Figure 13.12 on page 231 of your text. This map shows you
a comparison of countries based on GNP per capita. The disparity
between countries should reveal a familiar pattern.
• NOTE: GNP and GNP per capita are usually expressed in U.S. Dollars.
Social Indicators
• 1. Infant Mortality Rate (IMR):
– Measures the number of deaths of children under
one year of age per 1000 live births
– Indicator of the health of a country
– World IMR is 49.4
• 2. Literacy Rate:
– Measures ability of people to read and write
– Focus upon 15 year olds
– Global literacy rate for males is 88% and females is 79%
• 3. Life Expectancy Rates:
– Refers to the average number of years a person
would be expected to live
– Reflect quality of healthcare, wars, obesity and
HIV infection
– Worldwide: the male life expectancy is 68.5 and
female is 73.5
Worldwide Life Expectancy
Defining Development
• The level of development in a country refers to two types of
development:
1. economic development
2. social development
• “Economic Development” refers to how well the economy is doing,
and how much money people have at their disposal.
• “Social Development” It refers to more human indicators of well
being. It includes life expectancy, infant mortality rate, literacy rate,
availability of communications.
• Generally speaking, people in more developed countries are better
off and have an easier life than people in lesser developed nations.
• The term “Standard of Living" is used to describe how well off
people are. Standard of living equates to quality of life.
• The level of development among nations is far
from equal.
• Some countries have a very high standard of
living with long life expectancy, equal rights, high
average wages, strong economies, great health
care and high literacy rates
• Other countries have a short life expectancy,
fierce discrimination against woman, very low
wages, faltering economies, little health care and
very low literacy rates.
Worldwide Disparity
• The United Nations recognizes the disparity and has set
forth eight "millennium goals" to reduce the disparity
among nations.
–
–
–
–
–
–
–
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Eradicate extreme poverty and hunger
Achieve universal primary education
Promote gender equality and empower women
Reduce child mortality
Improve maternal health
Combat HIV/AIDS, malaria and other diseases
Ensure environmental sustainability
Develop
a
global
partnership
for
development
• By the year 2015 all 189 United Nations
Member States have pledged to meet the
above goals.
Developed and Developing World
Patterns in Developed and Developing
Countries
• A number of indicators suggest that:
– North America, Western Europe, Japan, Australia
are well developed
– Central Africa and South East Asia are poorly
developed
– South America, North and South Africa and much
of North Central Africa is developing
Assigned Readings & Activities
– "Employment Structures and Development
Indicators" on page 230-233 of your text book and
complete questions #22-28
– "Tertiary Activity & Economic Development" on
Pages 241-243 of your text book.