KEY ISSUE 1: WHERE IS INDUSTRY DISTRIBUTED? Chapter 11: Industry and Manufacturing

THE INDUSTRIAL REVOLUTION

Series of improvements in industrial technology that transformed the process of manufacturing goods Prior to the Industrial Revolution  Industry geographically dispersed across landscape  People made tools/equipment in their homes – cottage industry Catalyst for the Industrial Revolution  Technology – inventions transforming the way in which goods were manufactured

INDUSTRIAL REVOLUTION Industrial Revolution can be a misleading term:  Transformation resulted in new social, economic, and political inventions … not just industrial  Changes involved gradual diffusion of new ideas and techniques over decades rather than instantaneous revolution First industries impacted: Iron – s team engine helped consistently heat ovens to make tools Coal – wood becoming scarce… coal was plentiful Transportation – canals and railroads allowed transport for material,workers,etc. Textiles – transforms from cottage industry to factory system (machinery) Chemicals – created to bleach and dye cloth (sulfuric acid from coal) Food processing – canned food created to feed factory workers

Where Is Industry Distributed? Industrial Regions  Industry is concentrated in three regions (much more clustered in space than agriculture)  Europe  North America  East Asia (China and Japan)  Less than 1 percent of Earth’s land is devoted to industry  Each regions accounts for roughly ¼ of the world’s total industrial output.  Brazil and India account for most of industrial output outside of the aforementioned regions.

WHY DO INDUSTRIES HAVE DIFFERENT DISTRIBUTIONS? Key Issue #2

Important factors in Industry o What are the characteristics of the land, labor, and capital o Location - Where are markets located and where are resources located Industry starting to shift from MDC’s to LDC’s – Global markets.

Site and Situational Factors Geographers attempt to explain why one location may prove more profitable for a factory than others.  Companies ordinarily face two geographic costs. 1. Situation factors – costs associated with the established transportation networks accessible from a specific place. 2. Site factors – costs resulting from the unique characteristics of a location.

Situation Factors Transporting materials to and from a factory A firm wants to minimize cost of transporting goods The farther something is transported, the higher the cost Factories usually locate near both buyers and sellers

Weber’s Least Cost Theory of Industrial Location Location Theory – predicting where a business will or should be located. Location of an industry is dependent on economic, political, cultural features as well as whim. Location Theory Considers: –Variable costs-energy, transportation costs & labor costs

Weber’s Least Cost Theory of Industrial Location Alfred Weber, ( ) a German economists, published Theory of the Location of Industries in His theory was the industrial equivalent of the Von Thunen Model. Manufacturing plants will locate where costs are the least. Three Categories of Costs: Transportation- *most important cost*-usually the best site is where cost to transport raw material and finished product is the lowest Labor-high labor costs reduce profit-location where there is a supply of cheap, non-union labor may offset transportation costs Agglomeration- (clustering of an industry) when a group of industries cluster for mutual benefit-shared services, facilities, etc.-costs can be lower – examples – Hollywood, Silicon Valley, NY/Wall Street (Finance Firms), Car Manufacturers

Weber’s Least Cost Theory Proximity to Markets  Critical location factor for three different types of industries  Bulk-gaining industries  Single Market manufacturers specialized manufacturers w/ only one or two customers (auto parts, zippers for clothing, etc)  Perishable products Food products Time sensitive products (newspapers, etc.)

Weber’s Least Cost Theory Bulk-Gaining Industry  Produces something that gains volume or weight during production  Examples:  Fabricated Metals and Machinery Televisions, refrigerators, air conditioners, etc. Motor Vehicles  Perishable Products Milk, Fruits, Vegetables  Transportation costs are cheaper for these industries if they locate near the market and not the resources

Weber’s Least Cost Theory Bulk-Gaining Industry

Situation Factors Proximity to Inputs  Inputs include resources from the environment (minerals, wood, or animals), as well as parts or materials from other companies  Weight and size help determine location of factories

Situation Factors Bulk-Reducing Industry  Economic activity in which the final product weighs less than its inputs  Examples:  Copper Industry  Steel Industry  Transportation costs are cheaper for these industries if they locate near the resource and not near the market

Weber’s Least Cost Theory

© 2014 Pearson Education, Inc. Input Factory Market Heavier input, shorter distance to plant Lighter output, longer distance to market Lighter input, longer distance to plant. Heavier output, shorter distance to market Bulk Reducing Bulk Gaining

Modes of Transportation Ship Rail Truck Air Break-of-Bulk Point  Location where transfer among transportation modes is possible

Site Factors Land Labor – Most Important Capital The cost of these three factors varies  from location to location  within countries  within regions

Why Are Situation and Site Factors Important? Site Factors –Labor Most important factor site factoron a global scale. –Minimizing labor costs, which vary around the world, is extremely important to some industries. A labor-intensive industry is an industry in which wages and other compensation paid to employees constitute a higher percentage of expenses.

Why Are Situation and Site Factors Important? Site Factors cont’d –Capital Manufacturers typically borrow the funds needed to establish new factories or expand existing ones. Ability to borrow money has greatly influenced the distribution of industry in developing countries. –Land Lots must be large enough to accommodate efficient, contemporary one-story buildings. –Mostly available in suburban and rural locations and tends to be relatively cheaper than land in the city.

Left: Factories earlier in history were much more inefficient for production due to the compactness. Raw materials were housted to the top to be produced into something at the bottom. Right: Straight-lined modern factory that is more efficient in producing goods

WHY ARE SITUATION AND SITE FACTORS CHANGING? Key Issue 3 and 4

Intraregional Shifts in Manufacturing Historically manufacturing located inside cities  Proximity to markets  Convenience in shipping (especially w/ railroads)  Negative: Land tough to come by and $$. Modern Day - Tend to locate near suburbs/rural areas  Large tracts of land  One story buildings that are more efficient  Trucks now responsible for delivery  Location near major highways and interstates

Left: Factories earlier in history were much more inefficient for production due to the compactness. Raw materials were housted to the top to be produced into something at the bottom. Right: Straight-lined modern factory that is more efficient in producing goods

Attraction of New Industrial Regions Proximity to Low Cost Labor  United States: Northeast to Southeast  Showed little interest in joining unions  Opening of highways allowed southeaster mills to reach markets

Changes Within Developed Regions Changes within Developed Regions  Shifts within the U.S.  Industrialization during the late 19 th and early 20 th centuries largely bypassed the South, because they lacked the needed infrastructure. e.g. transportation network and electricity.  More recently, manufacturers have been lured by right-to-work laws- legislation that requires a factory to prohibit workers from being forced to join a union.  Essentially, industry in the U.S. over time has shifted from the Northeast toward the South and West.

Interregional Shifts in Europe Movement of Industry to Central Europe Transition started with the fall of communism Attractive due to:  Cheap labor  Proximity to market (Western Europe)

Emerging Industrial Regions Some manufacturers are locating in places where prevailing wage rates are lower than in traditional industrial regions.  Transnational corporations have embraced using low-cost labor in developing countries. New international division of labor refers to selective transfer of production operations requiring highly skilled workers to factories located in developed countries and those requiring little skill to factories located in developing countries.

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Attraction of New Industrial Regions Outsourcing  Transnational Corporations  Review production processes to see which steps can be performed by low-paid/low-skilled people  Selective transfer of jobs is known as new international division of labor  Each step in production process now scrutinized for optimal location

Emerging Industrial Regions  Mexico and NAFTA  The North Atlantic Free Trade Agreement (NAFTA) eliminated most barriers to moving goods among Mexico, the U.S., and Canada since  Mexico attracts labor-intensive industries because of its relatively low-cost labor and its proximity to the U.S. Plants in Mexico near the U.S. border are known as maquiladoras.

NAFTA Canada, US, Mexico- NO TARIFFS Maquidoras : an area set up along Mexico / US border where factories and industry are set up. It has the benefits of lower wages, lower transportation costs because of closeness to US, lower environmental restrictions, and due to NAFTA no tariffs on goods

Asia World’s largest supply of low cost labor World’s largest consumer market Changes in Policy in 1990’s (China)  Privatization and open up to foreign markets/investment led to growth in industry and markets An Export Processing Zone (EPZ) is a Customs area where one is allowed to import plant, machinery, equipment and material for the manufacture of export goods under security, without payment of duty

BRIC AND BRICS Companies expected to dominate global manufacturing during the 21 st century  Brazil  Russia  India  China BRIC Countries  Control ¼ of world’s land area  Contain 43% of world’s population  Account for only 1/6 th of GDP

Where Does Industry Cause Pollution?

Air Pollutin Concentration of trace substances at a greater level than occurs in average air Most generated from factories and power plants (burning coal) and motor vehicles (burning petroleum… carbon monoxide)

Global Scale Air Pollution Global Warming  Increasing of earth’s temp through burning of fossil fuels  Greenhouse effect  Earth’s temp. increasing due to greenhouse gases trapping some of radiation emitted by surface

Regional Scale Air Pollution May damage region’s vegetation and water supply  Acid deposition – sulfur and nitrogen oxides (burning fossil fuels) combine w/ water and oxygen to form sulfuric acid and return to earth  Acid precipitation – conversion of sulfur and nitrogen oxides to acids that return to earth as precipitation

Local-Scale Air Pollution Carbon Monoxide – reduces oxygen level in blood, impairs vision, threatens those w/ breathing problems Hydrocarbons – in presence of sunlight create photochemical smog (causes respiratory proglems) Particulates – visible particles… dark dust/smoke

Solid Waste Pollution Sanitary Landfill Hazardous Waste – mining operations largest producers

Water Pollution Sources  Point-Source pollution – enters body of water at specific point  Water-using manufacturers  Municipal sewage  Nonpoint sources  Agriculture – fertilizers, pesticides,etc. Impact on Aquatic Life  Aquatic animals consume oxygen  Biochemical oxygen demand (BOD) – oxygen consumed by decomposing organic waste