1. Manufacturing & Industrial Location Theory – Chapter 10
Questions –Directions for Future Research?
4 lectures left!
Location Theory
Space-cost curve
Tariff and NAFTA
High Technology
Cycle Theory
Fordism-Flexible Specialization

2. Alfred Weber, 1909 Labour costs - Isodapanes
Line of total transport costs
Determined by summing the value of all isotims at a point
And joining all points of equal total transport costs
Caution: As some hawk-eyed students have pointed out, there are a number of errors in this diagram!
As you can see for yourself, the $8 isodapane is really the $9 isodapane. The isodapanes are wrongly interpolated to the left of M and to the right of S

3. Derivation of Space Cost Curve

4. Spatial Margins to Profitability
Contemporary interpretation
Slopes of curves could be very gradual
Noneconomic factors may prompt nonoptimum location within margins
Firms may not have data to determine the optimum and are content with any location within margins of profitability
Satisficing behaviour

5. Manufacturing: Regional Patterns and Issues – Chapter 11
Tariff on manufactured imports
Import substitution
Protect infant industries
Foster industrialization and create industrial jobs
Linkages with other Canadian manufacturers
3rd Plank of the National Policy of 1869

6. Implications of the Tariff for Canadian Manufacturing
Industrialization benefits for southern Ontario and Quebec, rapid urban –industrial growth
Deindustrialization of Maritimes 1870s and 1880s
Higher costs due to tariff and low Canadian productivity were a small price to pay for Ontario & Quebec
The seeds of
Western alienation
Sir John A. &
Conservatives!

7. Implications of the Tariff for Canadian Manufacturing
Foreign ownership
Tariff factories
Branch plant economy
Technological dependency
High costs, low productivity
Not competitive on world markets
No mandate to export
Main links to U.S. not Canada!
By 1980s, NTBs more significant

8. ‘Free Trade’ Agreements
CUSFTA – 1 Jan 1989
NAFTA – 1 Jan 1994
Foreign location no longer a condition of market entry
Rationalization/specialization
Canada maintains positive balance of trade
Dispute resolution mechanism

9. It’s Not Really ‘Free Trade’
U.S. government procurement
Canada’s cultural industries
Dispute resolution: softwood lumber, durum wheat, beef are conspicuous failings
Loss of sovereignty ?

10. Canada’s International Trade Balance, 2001 ($ 000,000)
Source: Statistics Canada 2003, Cansim II Table 228

11. Costs and Benefits of ‘Free Trade’
“Giant sucking sound" of jobs and investment heading south – irony!
Growth in trade and investment, inbound and outbound. See DFAIT
Growth in dependence
Canada’s low dollar has been vital to strong trade performance under NAFTA
Impact is regionalized

12. High Technology New Metropolitan advantage remains
Semi-conductors, software engineering biotechnology, new materials
Complementary role of services
Outsourcing
Metropolitan advantage remains

13. Cycle Theory Regions (Chap 11) Products (Chap 10)
Biological development metaphors
Youth
Maturity
Old age

14. From Fordism to Post-Fordism & Flexible Specialization
Mass production & economies of scale
Assembly line
Specialized
Post-Fordism
Economies of scope
Constellations of small firms
Networks
Flexible specialization
Rapid switching among products
Multi-purpose machines and workers
New industrial districts