1. INDUSTRY AND SERVICES
Chapter 12

2. Where Did the Industrial Revolution Begin, and How Did It Diffuse?
Industrial Revolution: A series of inventions that brought new uses to known energy sources, new machines to improve efficiencies and enable other new inventions

3. Beginning of Industrial Revolution
Began in Great Britain in the middle to late 1700s
Why Great Britain?
Flow of capital
Second Agricultural Revolution
Mercantilism and cottage industries
Resources: Coal, iron ore, and water power

4. Flow of Capital into Europe, 1775

5. Origins of the Industrial Revolution
Textiles: Liverpool, Manchester
Iron: Birmingham
Coal mining: Newcastle

6. Diffusion of the Industrial Revolution
Mainland Europe
Early 1800s
Location criteria:
Proximity to coal fields
Connection via water to a port
Flow of capital
Later
Late 1800s
Some regions without coal
Location criteria
Access to railroad

7. Diffusion of the Industrial Revolution

8. How Do Location Theories Explain Industrial Location?
Location theory: Predicting where business will or should be located, considering
Variable costs
Friction of distance

9. Location Models Weber’s Model Hotelling’s Model Losch’s Model
Manufacturing plants will locate where costs of transportation, labor, and agglomeration are the least
Theory: Least Cost Theory
Hotelling’s Model
Location of an industry cannot be understood without reference to other industries of the same kind
Theory: Locational Interdependence
Losch’s Model
Manufacturing plants choose locations where they can maximize profit
Theory: Zone of Profitability

10. Least Cost Theory (1909)
Alfred Weber’s model – owners of manufacturing plants seek to minimize three costs: 1) Transportation, 2) labor, and 3) agglomeration (too much can lead to high rents & wages, circulation problems)
Weight-losing case: final product weighs less than raw mat.s; location = source

11. Weight-gaining case: final product weighs more (or takes more space) than raw mat.s (e.g. addition of water); location = market
Some argue Weber’s model doesn’t adequately account for variations in costs over time (e.g. taxation, consumer demand)
Substitution principle – decreases in certain costs can offset increases in others

12. Christaller’s Central Place Theory – Revisited
Distance affects the marketing strategies of enterprises
Businesses identify one location, possess a monopoly
Hexagons display a nesting pattern; Christaller’s theory is not as accurate today (diminishing specialization)

13. A third vendor complicates this (spatially)
Harold Hotelling Model (Two dimensional)
Locational interdependence – the location of industries can’t be understood w/o ref. to the location of other industries of like kind
Two vendors located on pts. A & C, eventually gravitate toward pt. B (moving from this pt. will only hurt profitability)
A third vendor complicates this (spatially)

14. Losch’s Model: Zone of Profitability

15. Major Industrial Regions of the World Before 1950
Main determinants
Near raw materials
Transportation
But…additional needs
Goods and capital
Political circumstances
Economic leadership
Labor costs
Levels of education and training

17. Western and Central Europe

18. Major Deposits of Fossil Fuels in North America

19. Major Manufacturing Regions of North America

20. Major Manufacturing Regions of Russia

21. Major Manufacturing Regions of East Asia

22. How Has Industrial Production Changed?
Fordist : Dominant mode of mass production during the twentieth century, with production of consumer goods at a single site
Post-Fordist : Current mode of production with more flexible production practices
Goods not mass produced
Production accelerated and dispersed around the globe
Multinational companies that shift production, outsourcing it around the world

23. Time-Space Compression
Improvements in transportation and communications technologies
Many places in the world more connected than ever before

24. Effects of Time-Space Compression
Just-in-time delivery
Keeping just what is needed for short-term production
New parts shipped quickly when needed
Global division of labor: Corporations drawing from labor around the globe for different components of production

25. New Influences on the Geography of Manufacturing
Transportation
Regional and global trade agreements
Energy

27. Modern Production Outsourcing
Moving individual steps in the production process (of a good or a service) to a supplier, who focuses their production and offers a cost savings
Offshore
Outsourced work that is located outside of the country

28. Where Are the Major Industrial Belts in the World Today, and Why?
Deindustrialization
A process by which companies move industrial jobs to other regions with cheaper labor
Period of high unemployment in deindustrialized region
Goal: Switch to a service economy
Newly industrialized regions
Pro–free trade laws
Lax environmental regulations

29. China: Newly Industrialized Country
Major industrial growth after 1950, in 1960s
State-planned
Focus on:
Northeast district
Shanghai and Chang district
Today
Companies that bring production (not the whole company)
Advantages
Chinese labor
Special economic zones (SEZs)

30. Geographical Dimensions of the Service Economy
Influences on location
Information technologies
Less tied to energy sources than manufacturing
Market accessibility more relevant for some and less relevant for others because of telecommunications
Presence of multinational corporations
Quaternary and quinary economic activities

31. High-Technology Corridors
Technology corridor: An area designated by local or state government to benefit from lower taxes and high-technology infrastructure with the goal of providing high-technology jobs to the local population
Technopole: An area planned for high technology with agglomeration built on a synergy among technological companies