Industrialization
 Industrial
Revolution- 18th century in North
America and Europe. Rises in wage labor and
large-scale urbanization, led to a range of
social changes
 Lead
to the rise of factories and the mass-produced goods.
 Today,
you can still find some specialty goods (usually artisanhandmade/local items) produced in small homes/shops (aka
cottage industries). They are not nearly as popular anymore.
 Assembly
lines for mass production were first standardized by
Henry Ford in the early 20th century, this was called Fordism.

Industrial Countries- are the countries responsible for the large
portion of the world’s industrial output.

Used to be limited to Northern Europe, East Asia, and North
America. In recent years this has shifted.
 By
1970’s even the wealthiest countries were outsourcing.
Industrial factories and jobs shifted to less developed
countries. This worldly shift has social implications (demand of
jobs, pollution, poverty)

Service-based Economies-industries with a focus on research,
development, marketing/sales, tourism, and telecommunications.
Wealthier countries have moved this way

Pros- less dangerous jobs, less pollution, higher paying jobs

Cons- more education required for jobs, difficult shifts
transitioning from industrial to service-based. Factories shut down
and jobs are outsourced.

Deindustrialization- when a region relies too heavily on a certain
industry


If a place revolves around a company/industry, a shift/collapse
can destroy other companies/services, real estate, taxes,
education, etc. Leaves booming/growing towns in shambles (EX:
Rustbelt Detroit car industry)
Rapid growth in the technology industry lead to E-Commerce

Instead of having brick-and-mortar businesses (actual store-front
locations)- businesses moved into ‘internet’ space and people
could shop online. More outsourced/work from home. Less
transaction costs

Transnational Corporations (also known as multinational corporations) are a
result of today’s global economy.

They are often large, global companies that take advantage of
smaller/weaker countries and their labor laws (ex GM and Nike)

Export-processing zones- are now common all over the world. They are
accessible areas that have distribution facilities, lax environmental laws
and lax labor restrictions. Appealing to foreign corporations and foreign
investment


EX: Maquiladoras Mexican border cities with jobs for locals but are
often corrupt, dangerous, and have terrible pollution. American
companies own offices on the American side and factories on the
Mexican side. The border makes it a prime place to take advantage of
both economies.
Another corporate benefit to having a footprint in another country is to
take advantage of financial systems.

Offshore financial centers- a way for a company to save money by
avoiding high taxes. This is common in international business and
often these centers are located in Panama, Switzerland, Singapore,
and the Bahamas. Money moving into banks in these countries is
often part of money scams.
Bulk Industries
Bulk gaining industries:

Bulk gaining industriesassemble products whose
weight is greater after
assembly than it was in its
parts. (Ex: Soda bottling
companies) This affects where
production should be located
and how factories need to be
spread out to avoid shipping
costs.
Bulk reducing industries:

Bulk reducing industriesassemble products that are
lighter in weight after the
product is made. The pieces
are bigger/heavier before.
(Ex: Oil into gasoline or timber
into sawmills)

A break-bulk point- is a place,
such as a port city, where large
shipments of goods can be
broken into smaller containers
to ship to markets.
Models of Development and Measures of
Productivity

As economies move from industrialized to service-based- they move from low
levels of economic development. Relying less on farming, raw materials, and
heavy manufacturing and into more information based services.

Levels/Types of Economic Activities 
Primary Economic Activities: the harvest/extraction of raw material (mining,
ranching, fishing)

Secondary Economic Activities: anything associated with those raw materials
and how they get turned into goods for consumption (textiles, manufacturing)

Tertiary Economic Activities: the exchange of goods (retail stores,
restaurants)

Quaternary Economic Activities: research, development, teaching, tourism,
and anything involving the exchange of knowledge.

Quinary Economic Activities: involves subsets of quaternary activities
(usually scientific research or high-level decision making)

Rostow’s stages of development.

FIRST STAGE- Traditional Society: Limited technology/Static society


SECOND STAGE- Conditions for Take-Off: Commercial Exploration of agricultural


Exporting and foreign investment starts. Railroads, highways, and infrastructures
start to rise
FOURTH STAGE- Drive to Maturity: Development of commercial base


Usually triggered by a transition of external interest/market. Also growth of other
industries.
THIRD STAGE- Take-Off: Development of manufacturing sector


Least-developed countries are often stuck in the primary economy. Nepal’s
economy may never look like Denmark’s (different history/culture/geographic
events)
This occurs when investments in manufacturing exceeds 10% of the countries
national income.
FIFTH STAGE- High Mass Consumptions

Could mean things like increased social welfare or ecological sustainability.
Measures of Development
NONECONOMIC MEASURES

Human Development Index (HDI)created by the UN- calculates
development in terms of human
welfare (not money). HDI uses life
expectancy, education, and income

Gender Equity- is also important when
measuring human welfare
ECONOMIC MEASURES

Gross National Product (GNP) –
common way to measure economic
development. The GNP measures all of
the goods and services produced by the
country in one year (including
investments from abroad).

Gross Domestic Product (GDP)- Is like
the GNP but it excludes foreign
investments. Only the goods/service
profits within the country

Net National Product (NNP)- is a
measure of the GNP (goods/services
including abroad) MINUS the loss of
degradation of natural resource capital
as a result of this productivity.
Global Economic Patterns

Core-Periphery Model- the division of the world’s countries into a global economic
core, semi periphery and periphery.

Core- includes the countries with relativity high per capita incomes and high standards of
living. It includes most of Europe, Japan, the US, Canada, Australia and New Zealand.

Within these Core countries are the World Cities- the global centers of economic activity
(London, Tokyo and NYC).

Semi-periphery- are the newly industrialized countries, with median standards of living
(Chile, Brazil, China, India, Indonesia).


Periphery- includes the world’s least developed countries. This includes Africa, parts of
South America, and parts of Asia. The places have low levels of economic productivity,
low per capita incomes, and mostly low standards of living.


These places are usually diverse but have wide gaps between the rich and poor.
They usually lack infrastructures (paved roads, sanitation facilities, telecommunication towers,
etc). They often have rapidly growing populations, not enough resources, environmental
problems, etc.
This is called the ‘slow world’ compared to the ‘fast world’ of the Core. In the fast world
we have telecommunications, mass media, online markets, computers and devices
compatible with each part of life.

World-System Theory- Created by Immanuel Wallerstein, describes the earth as an
interdependent system of countries linked by political and economic competition.


With access to markets/technology, the core, semi peripheral and peripheral
countries started to emerge, and the Core began to dominate as the
peripheral didn’t have the same access to markets/technology. Some move
fast and others get stuck.
Location Principles- while companies can’t perfect all of the below conditions,
the more they can maximize, the more they have an advantage. All industries
locate their production facilities based on the following geographic factors:

The location a company chooses must provide easy access to the materials.

The location must have an adequate supply of labor (skilled or unskilled)

The location must be in proximity to shipping and markets

The location site must minimize production costs (cheap land, labor, etc)

The location must have ideal natural factors (climate, agricultural conditions)


Least-cost theory- by Alfred Weber, says location of production facilities
can minimize costs. Depending on the product, and where it becomes the
heaviest/most expensive- the location should change.

The least-cost theory doesn’t take into consideration products that
have little or no weight. These are called footloose firms- an
example would be a company that makes computer chips.

Spatially fixed costs- do not change despite where the product is
assembled while others have spatially variable costs, which change
depending on where the product is produced
Agglomeration effects: When you start to see certain geographic clusters
take place to draw from the same set of resources. EX: Hollywood=Film


Brings in skilled labor, political influence, tax breaks, etc.
Deglomeration occurs when firms leave an agglomerated area and start
up in a new far away region. EX. After the dot.com bust, many high
tech companies fled from San Francisco because of high living costs.
Regionalization
Regionalization occurs when specific regions take on characteristics
that differentiate themselves from others within the same country.
Involves the development of dominant economic activities in certain
regions.

The primary manufacturing region of the U.S. has traditionally
been the Great Lakes region. Even though this is now the Rust
Belt from deindustrialization, this is still the home of much of the
United States remaining industrial base.

Other regions experience economic backwaters, which is when
one region experiences huge growth, others lag behind or recede.
This can lead to high levels of out-migration, lack of investment,
and shrinking of local tax base.
Sustainability and Globalization



Sustainable Development- current
development can continue without
prohibiting the future generations.
A problem with development is
that it isn’t always sustainable.
EX, if a countries development
depends on a resource or raw
material- it could run out.
Renewable (natural) Resourcesmust be able to keep growing on
their own- and these are needed
for sustaining development. Trees
for timber, fish for food, and other
resources are renewable
Non-renewable resources- don’t
sustain themselves (oil,gold) Once
it is gone- it’s gone. Limits to what
the earth can provide us with.

GLOBALIZATION- the world is
integrating on a global scale.

Social barriers are knocked down,
less meaning on space/distance.

Pros- traveling, international
relationships, less
import/export bans, product
exposure, you can buy anything
online

Cons- less mom/pop shops,
certain countries getting taken
advantage of (border towns),
lack of preserving smaller
cultures, loss of jobs or
industries to an area.