Industrial Regions before 1950 Saxony Nizhni Kanto Silesia Novgorod Plain New The RuhrS. Ontario England Great The Lakes Volga NY St. Petersburg Kansai District
The Industrial Revolution• Industrial Revolution – Began in 18th C Europe – Coal – Railroad – Population shifts
Coalfields, ironore deposits andports in closeproximity
Coal Barges, Leeds, UK
Birmingham, UK 19th Century
IndustrialRegions Today • Northeast District (Manchuria), • Shanghai/Yangzi District, • Guangdong Province, China • Four Tigers – S. Korea – Taiwan – Hong Kong – Singapore1/3 of world’s socksmade in Datang, China
THE NEW INTERNATIONAL DIVISION OF LABOROld System• Core – industrial production• Periphery –raw materialsToday• Manufacturing in the periphery• R&D - core (“Technopoles”)• TNCs Core Periphery in 2000 – Not tied to one nation – Take advantage of low wages; less regulation… Trade between the core countries or the core and periphery (not periphery to periphery)
CHANGING SIGNIFICANCE OF LOCATION• World Cities (control centers of the world’s economy) are found in the core – New York – London – Tokyo – Sao Paulo/Sydney – Sao Paulo, Brazil Southern Hemisphere
TYPES OF SERVICE INDUSTRIES In core regions, serviceindustries create most jobs•Quaternary Industries – Information and capital•Quinary Industries – High decision-making & advancement (research, management…)
Location Decision• Manufacturing can be located away from resources• Key issue: – Friction of Distance • ↑ time/cost with ↑ distance – Distance decay • Manufacturer more concerned with local markets
Weber’s Model• Model for the location of manufacture• “Least Cost Theory” – Transportation cost – Labor cost – Agglomeration • enterprises cluster in the same area • Too much agglomeration can lead to high rents and labor costs.
House in San Jose – How much? 2 bedrooms, 1 bath, 1632 ft2 $739,000
Weber’s Model• Special factors that affect some industries – Perishable food• Criticisms – Transportation costs can ↑ if labor costs/rent ↓ – Business would be most successful in one specific place – No mention of taxation policy
Sometimes location is moreimportant than any other factor
Raw Materials• Transport & location of factories• Exploitation of countries that produce raw materials (colonies)• OPEC Cartel
Labor• Manufacturers seek large, cheap, semi- skilled labor force• 1950’s Japan – Challenged by South Korea, Taiwan• 1980’s China – SEZ – Labor costs 40x lower than Japan• 1990’s US – NAFTA & Maquiladoras
Transportation• Innovation: container system that can be lifted from ship to tractor trailer• Distance & cheapest cost – Truck for short distances – Railroads for medium distances Container Home – Ships for long distances
Approximately 4 football fields long
Infrastructure• Infrastructure: facilities and services that make business possible – Telephones, roads, banks….
Energy• Today location close to energy less important – electricity transmitters• Current concern: Energy Security Alaska Pipeline
Petroleum Production in 2007 millions of barrels per day1. Saudi Arabia (OPEC) 10.22. Russia 9.83. United States 8.44. Iran (OPEC) 4.05. China 3.96. Mexico 3.57. Canada 3.48. UAE (OPEC) 3.09. Venezuela (OPEC) 2.710.Kuwait (OPEC) 2.611.Norway 2.612.Nigeria (OPEC) 2.4
Developed vs. Underdeveloped Countries Windhoek, Namibia Ginza Shopping District, Toyko How can development be measured?
Rostow’s Modernization Model All countries go through five stages• Traditional Society – Subsistence farming, rigid social structure…• Precondition of Takeoff – National leaders move the country to open/diversify• Takeoff – Type of industrial revolution; urbanization• Drive to Maturity – More technology, specialization, international trade• High Mass Consumption “ToPort rich is glorious” get of Shanghai Shanghai Mall – High income, large service sector, many goods & servicesCriticism: Rostow’s model suggests a single development path
Gross National vs. Domestic Product• GNP vs. GDP• Highest GDP per capita – Luxembourg $89,000 – Qatar $88,000 – US #8 at $48,000• Lowest GDP per capita – Liberia $600 – DR Congo $400
GDP & Development• GDP does not always correctly gauge development – e.g. black market, uneven development…
The Illegal EconomyEstimated value of global drug trade: $400 Billion $400,000,000,000!
Viktor Bout – International Arms Dealer “Merchant of Death” Global illegal arms trade worth tens of billions of dollars A Couple of his Clients…. Charles Taylor, Former Pres. Of Liberia Accused of war crimes for killing, mutilating & torturing thousands
Different Models of Development Liberal Models Structuralist Models Countries will Inequity existsdevelop along the because this are organized in a way same path that hinders development
Dependency Theory• Political & economic relationships between countries control & limit the economic development of poor “France feared that banana imports to the EU from its colonies and territories in the areas Caribbean would be crushed by competition from Latin American countries producing – Colonialism created larger and cheaper dollar bananas. At present, higher-cost producers in the former dependent countries European colonies in Africa, the Caribbean and the Pacific, are protected under an EU quota system which limits tariff-free imports of Latin American bananas to 2.2m tons a year.” Gabon The Independent, 1994
Belgium reduced the population of the Congo from 20 million to 10 million in 40years, while extracting millions of dollars in minerals, ivory and rubber
Aid to Africa Stop giving aid to Africa. Its just not working’“Development aid does more harm than good in Africa, saysZambian economist and author Dambisa Moyo, so we should stopit.”What are those consequences [of aid]?"First and foremost the widespread corruption. The people inpower plunder the treasury and the treasury is filled withdevelopment aid money. The corruption has contaminated thewhole of society. Aid leads to bureaucracy and inflation, to Dambisa Moyolaziness and inertia. Aid hurts exports. Thanks to foreign aid thepeople in power can afford not to care about their people. Millenium VillageSo why do Western countries keep on giving if it doesnt help?"The cynical answer is: because it distracts attention from thetrade barriers they have erected in order to protect employmentin the West. These trade barriers cost Africa an estimated 500billion dollars every year. Thats ten times the amount Africa isgiven in development aid. And because they secretly dontbelieve that Africa is ever going to pull it together. They feel sorryfor the Africans. So they buy themselves a conscience.” NRC Handelsblad, 4/2/09
Global Inequities• Periphery countries label the core’s dominance as “neo-colonialism”• Problems in the periphery: – Poverty – Inequality – Debt – Environmental decay• How can countries on the periphery change? – Economic nationalism? – Agriculture? – Tourism?
Tourism Sharm el Sheikh, EgyptHow does tourism enhanced and diminished landscape distinctiveness?
CHANGING SIGNIFICANCE OF LOCATIONTNCs SEZs Footloose Maquiladoras Technopoles Industries Issue: Time-Space CompressionThe world is ‘collapsing’ – Does location matter anymore???