Weber Notes 2014

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Weber Notes 2014

  1. 1. Industrial Activity and Geographic Location
  2. 2. Economic Geography  Economic geographers investigate the reasons behind the location of an economic activity
  3. 3. Location Theory  Attempts to explain the pattern of the location of an economic activity in terms of influential factors
  4. 4. The Location Decision (1)  Primary Industries  Because these deal with the extraction of resources, primary industries must be located where the resources are
  5. 5. The Location Decision (1)  Secondary Industries  less dependent on resource location  raw materials can be transported if profits outweigh the costs of transportation
  6. 6. The Location Decision (2)  Alfred Weber: 1868- 1958  German  The Von Thunen of economic geography  Least Cost Theory  Accounted for the location of a manufacturing plant in terms of the owner’s desire to maximize three costs
  7. 7. The Location Decision (3) Transportation (most important)  moving raw materials to factory and finished goods to market Labor  High labor costs reduce margin of profit  current economic boom on Pacific rim Agglomeration  number of similar enterprises clustered in the same area  Shared talents, services and facilities  when excessive, can lead to high rents, rising wages, circulation problems
  8. 8. Weber  Some argued that Weber’s model did not adequately account for variations in costs over time  Substitution principle: when one cost decreases can endure higher costs in another area (fixed vs variable costs)  Model suggests that one particular site (point vs area) would be optimal but the business could flourish in more than one area  Taxation policies are not accounted for by Weber
  9. 9. Factors of Industrial Location (1) Transportation  Raw materials to factory and finished products to market  steel plants along Atlantic seaboard because iron shipped in from Venezuela  Europe’s coal and iron ore regions  Iron smelters built near coal fields  Japan’s colonial expansion into E Asia (China/Korea) due to raw materials  European colonization for resources, periphery to core
  10. 10. http://www.epa.gov/sectors/sectorinfo/sectorprofiles/ironste el/map.html
  11. 11. Piedmont: foot of the mountains; from Italian pied (foot) monte (hill)
  12. 12. Factors of Industrial Location (1) Transportation  highly developed industrial areas are places that are served most efficiently by transportation facilities  alternative systems  container systems, break of bulk  for most goods, truck is cheaper over shorter distances, railroads cheaper over medium distances, and ships cheapest over longest distances  must consider loading/unloading, actual transportation (cost of transportation increases with distance at a decreasing rate), and weight and volume
  13. 13. World’s largest container ship
  14. 14. Intermodal Facility: Portland, Oregon
  15. 15. Factors of Industrial Location (2) Labor  a large, low-wage trainable labor force will attract manufacturers  Japan’s postwar success based on skills and low wages of workforce, low quality high quantity initially  China emerged with large labor force in 80’s  Taiwan and South Korea emerged to challenge Japan in mid ‘90’s due to cheaper labor  Four Tigers today
  16. 16. See page 377 in book
  17. 17. Factors of Industrial Location (3) Infrastructure  transportation, telephone, utilities, banks, postal, hotel  China-inadequate local and regional infrastructure  Vietnam-inadequate power, water, transportation
  18. 18. Factors of Industrial Location (4) Energy  used to be much more important than it is today  early British textile mills had to locate near water power  rarely a problem today, except industries needing a huge amount of energy--- metal processing and chemical industries may locate near hydropower (TVA or Pacific Northwest)
  19. 19. Map showing location of chemical manufacturing facilities.
  20. 20. Other Factors  agglomeration  political stability  regional receptiveness to investment  taxation policies  environmental conditions (Hollywood)
  21. 21. Silicon Valley  High Tech Heaven, headquartered in San Jose California, 50 miles south of San Francisco  Stanford University  Silicon is main ingredient in computer chip making  2nd most abundant element in Earth’s crust (ubiquitous)  IBM, Netscape, Apple, Yahoo!, Intel, Sony, Microsoft

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