Information Technology (IT)
Industries in the S4-5
Geography Curriculum
Dr. Becky P.Y. Loo
Associate Professor
Department of Geography, HKU
Information Technology (IT) Industries in
the S4-5 Geography Curriculum
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What?
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Where?
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Why?
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How?
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Conclusion
What?
What is information technology?
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Desktop computer?
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MP3?
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Mobile phone?
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Telephone line?
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Electronic dairy?
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E-mail account?
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Radio?
Generate, process and exchange information
Old IT
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New IT
• Late 19thC and early 20thC
• Mechanical, electromechanical
• Early electronic technologies
• e.g. typewriter, camera, telephone, telegraph
Oral face-to-face contact
Simple pictorial presentation
Written language
Printing:
e.g. paper, ink, printing press
• After the 1950s
• Microelectronic technologies
• e.g. computers, robots, fibre optics
Convergent IT
• Computer +
generate &
process
Telecommunications
exchange
What are information technology industries?
•
Standard Industrial Classification (SIC) (1972) (Varga, 1999)
Information technology
357
Office computing and accounting machines
361, 3825 Electrical transmission and distribution equipment
365
Radio and television receiving equipment, except
communication types
366, 367 Electronic components and accessories,
communication equipment
•
Information technology sector (Norton, 1999)
• Large computers
• Personal computers
• Software
• Semiconductors
• Semiconductor equipment
• Communications
• Medical technology (biotechnology & instruments)
Where?
Global level
N. America?
 Africa?
Europe?

Asia? 
National level
USA?  Mexico?
Germany?  Yugoslavia?
Japan?  Burma?
Sub-national level
Silicon Valley?  Hollywood? Munich?  Berlin?
Tokyo?  Sendai?
IT industries are highly localized at
different spatial scales.
Case study: The silicon valley
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San Francisco Bay
3,400 square km
Flanked by the Coastal Range
Valley: 1/3 of the total area
Spanish colonizers in the
late 1700s
• Agrarian economy
• Santa Clara county
1930s
• Prof. Frederick Terman, Electrical
Engineering, Stanford University
• Setting up commercial enterprises
with professional knowledge
1940s
• No. 15 most productive agricultural counties in US
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1/3 of California’s annual crop of plums, cherries, pears & apricots
Stanford Research Institute
1950s
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WWII and the outbreak of Korean War
Federal funds for electronics research and development
1950-1954:  Military prime contracts to California $13 billion
 14% of US total
War-related aerospace and electronics enterprises
Stanford Industrial Park, Stanford Research Park
1960s
• Throughout the entire Cold War period
• Department of Defense’s electronics-based programs
Distinguishing characteristics at early stages:
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Large supply of scientific and engineering manpower
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Federal defense and aerospace contracts as huge markets
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Easy access to venture capital in San Francisco
1970s
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Over 40,000 new jobs a year
1 new jobs
Multiplier effect
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“Right place to be”
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2-3 new jobs in other sectors
1980s
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Population: 1.25 million
World’s most intensive complex of high-tech activity
Electronics Employment
Hi-tech in total employment of the
Silicon Valley:
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1959
9.7%
1965
20.9%
1970
39.5%
1975
55.7%
1980
69.8%
1985
78.9%
Computers, other office machines,
communications, semiconductors,
other electronic components,
missiles/parts, instruments, drugs,
software/data processing, IC labs,
electronic wholesale, computer
wholesale
Why?
Open Windows of Locational Opportunities
1. Discontinuity nature
Away from old
centres
2. Innovative milieu … ability to create favourable production
environment.
Lack of favourable
factors not important
3. Chance … importance of generic, as opposed to specific
factors of production
Widely range of
suitable areas
Innovative milieu
Three reasons for localized knowledge
creation and accumulation
1.
Nature of the innovation process
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Formal and informal networks for knowledge exchange
a) Incremental reduction of technical and economic uncertainty
Technical feasibility
Market acceptability
Trial and error approach
b) Continual interaction between related firms
Joint development work
Sensitive information
c) Face-to-face contacts in the exchange and creation of new
knowledge
Informal channels
Tacit knowledge
Direct observation of products and production process
Material elements
Immaterial elements
Institutional elements
Web of relationship
2. Barriers to spatial diffusion
• Limited mobility of physical, human & social capital
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Geographical inertia
Speed
Costs
Led time
3. Tapping
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Outside resources
• People
Firms
Capital
Ideas
Technology
Patents
By outsiders
• “Right
place to
be”
By incumbents
• Role of
TNCs
Case study: Silicon Valley
1. Nature of the innovation process
1930s-1940s
• Not particularly strong
• Stanford University
• Other Universities: e.g. MIT in engineering
• Other commercial clusters: e.g. laboratories of IBM, Bell …
1960s
• Stanford University
• PhD degree
• Part-time honours programmes
• Industry-university research sharing and seminars
• Local laboratories recruiting nationally
• SRI, NASA’s Ames Research Center, IBM, ITT, …
• Important to small firms and young semiconductor industry
• Unusually high degree of interactions
2. Barriers to spatial diffusion
• Physical capital
• Supplies of specialized inputs and services
• Photomasks, testing jigs, chemicals, silicon and special
production equipment
• Human & social capital
• Highly desirable lifestyle (creation of social & cultural milieu)
• Social status
• Recreational opportunities
• Suburb lifestyle
• Horse owners
• Switch jobs without relocating
3. Tapping
• Outside people
Young scientists from all over the country
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To land jobs
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To start their own firms
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Outside technology
New firms
Inflow of capital
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Local industry liberally financed with venture capital
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Success of Fairchild
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Financial support from San Francisco
• A large pool of wealthy individuals and families with
discretionary incomes
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Management consulting house
How?
Flexible production
“ Post-Fordism”
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Specialized production
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Flexibly deployed (increasingly non-union) labour
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Flexible machines
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External economies of scale
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Agglomeration economies
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Spatial division of labour
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Vertical disintegration within each product group
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Transformation within the capitalist economy
Less-developed countries
Developed countries
Labour-intensive industries
Capital-intensive industries
Less-developed countries
Developed countries
Low-technology
components/process
High-technology
components/process
1. Different stages do not need to be in geographical proximity
Stages 1 – 3
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High-level scientific, technical & engineering personnel
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Pure production environment
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Suitable utilities
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Pure water supply
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Waste disposal facilities
Stages 4 – 6
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Low-skill labour, female
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Clean environment
2. Low weight-high-value characteristics
Which stage is the most mobile?
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Stage 5 -- Assembly & packaging
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Low-labour cost areas
3. Differential impacts of technological change on different stages
Which stage is the most profoundly affected?
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Stage 3 – Wafer fabrication
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New lithographic techniques
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Automation
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Increasingly capital- & research- intensive
How much money is required?
1960s
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Roughly 2 millions
Early 1970s
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15 – 20 millions
Early 1980s
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50 – 75 millions
Late 1980s
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150 millions
1 billion to 2 billions
1996
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Rise of the “fabless” semiconductor firms
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In-house
USA in 1980s
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Design house, product design and development
Quality assurance, marketing, sales, customer
support, testing
4
Contract
out
6
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Raw wafer manufacturing
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And wafer fabrication subcontracted to outside
firms
2
3
5
Chip assembly
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1
Conclusion
• One of the many approaches
• Industrial geography is always changing
• Some major trends and characteristics
• Information sharing vs teaching kit guides