Industry: Part I
APHG Copeland
Key Question:
Where did the Industrial
Revolution begin, and
How did it Diffuse?
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 (lumber
supply limited due to use in urban settings)
The Industrial Revolution
• European domestic markets were growing,
and a labor force was lacking in England
• The steam-driven engine made up for the lack
of available labor
Flow of Capital into Europe, 1775
Needed flow of capital in order to fuel the industrial revolution.
The Industrial Revolution
• Freed from charcoal use, iron smelters could
be concentrated near British coal fields
• Transportation and communications were
affected
Textiles
Production:
Liverpool and
Manchester
Iron Production:
Birmingham
Coal Mining:
Newcastle
The Industrial Revolution
• The first steam-powered ocean-going vessel
emerged
• England held a monopoly over products in
world demand and the skills to make
machines to manufacture them
Ironbridge, England
World’s first bridge made entirely of cast iron,
constructed in late 1700s.
Iron Ore to Steel
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
Examine the map of diffusion of the Industrial
Revolution into Europe and determine what other
characteristics (aside from presence of coal) were
necessary for industrialization to take hold in these
regions.
Key Question:
How do Location Theories
explain Industrial Location?
The Paris Basin is the Industrial base of France. Rouen (pictured
here) is at the head of navigation point on the Seine River.
Location Theory
• Location Theory – predicting where business
will or should be located.
Considers:
- Variable costs vs. Fixed costs (List)
- Profit maximization (Revenue>Costs)
- Friction of distance (time & cost increase due
to increasing distance)
- Transportation
Factors of Industrial Location
Raw Materials
• Very few industries use raw materials
• Most manufacturing is based on the further
processing and shaping of materials already
treated in some fashion
• Transportation costs affect
industry location
Power Supply (Energy)
• Power supplies that
are immobile or of
low transferability
may attract activities
dependent on them
• Current technology
made less important
• Industries requiring
large amounts of
energy still situated
near the power source
Labor
• Spatial variable affecting location decisions
and industrial development
• 3 major traditional considerations
– price, skill, and amount
• Labor Flexibility: highly
educated workers able
to apply themselves to a
wide variety of tasks
and functions
Market
• Goods are produced to supply a market
demand
• Size, nature, and distribution or markets is
important in industrial location decisions
• Ubiquitous industries (necessities)
Transportation
• Unifying thread of
all factors of industrial location
• Modern industry is immediately tied to
transportation
• Use many different forms of transportation
modes locate at break-of-bulk points
(seaports, airports). If a manufacturer uses multiple b-o-b points,
what does this do to the price of the product for the consumer?
Alfred Weber
• Created the classical model of industrial
location theory in 1909 (Industrial Triangle)
Least-Cost Theory
• Explains the optimum location of a
manufacturing establishment in terms of
minimizing three basic expenses
– Transportation cost, labor, agglomeration
Least Cost Theory
1) Transportation: the site chosen must entail
the lowest possible cost of
A) moving raw materials to the factory
B) finished products to the market. This,
according to Weber, is the most important.
C) Is the item bulk-gaining or bulk-reducing?
Least Cost Theory
2) Labor: higher labor costs reduce profits, so a
factory might do better farther from raw
materials and markets if cheap labor is
available
-ex: China – today
Least Cost Theory
3) Agglomeration: when a large number of
enterprises cluster in the same area, they can
provide assistance to each other through
shared talents, services, and facilities
Ex. manufacturing plants need office furniture, strip malls, light industrial parks (consumer goods),
heavy industrial parks (capital goods)
5 Controlling Assumptions
1. Area is uniform physically, culturally, and
technologically (isotropic, plain)
2. Manufacturing involves a single product to
be shipped to a single market whose
location is known
3. Inputs involve raw materials from more
than one known source location
5 Controlling Assumptions
4. Labor is infinitely available but immobile in
location
5. Transportation routes connect origin and
destination by the shortest path and
directly reflect the weight of the items
shipped and distance moved
Other Location Models
Hotelling’s Model
Location of an industry cannot be
understood without reference to other
industries of the same kind.
Theory:
Locational interdependence:
indicates that locational decisions
are not made independently but
are influenced by the actions of others.
Other Location Models
Losch’s Model
Manufacturing plants choose
locations where they can
maximize profit.
Theory:
Zone of Profitability