1. Unit 6:Industrial and Economic Development
Chapters: 10,12 and 14
20-22 Days

2. Unit Concepts
What factors account for uneven economic development across the globe?
What is the relevance of the growth theories of economic development?
How has globalization affected labor, finance and markets around the world?

3. What does Development Mean?
Development implies “progress”
Progress in what?
Do all cultures view development the same way?
Do all cultures “value” the same kinds of development?

4. Main Points
Geographically, the single most important feature of economic development is that it is highly uneven.
Geographical divisions of labor have evolved with the growth of the world-system of trade and politics.
Regional cores of economic development are created cumulatively.
Spirals of economic development can be arrested in various ways.
The globalization of the economy has meant that development is much more open to external influences.
Per Capita GNI

5. Patterns of Economic Development
Economic development refers to processes of change involving the nature and composition of the economy.
These processes can involve three types of changes:
Changes in the structure of the regions’ economy;
Changes in forms of economic organization within the region;
Changes in the availability and use of technology within the region.
Guangdong Province, near Shenzhen

6. Measuring Development
Gross National Product (GNP)
Measure of the total value of the officially recorded goods and services produced by the citizens and corporations of a country in a given year. Includes things produced inside and outside a country’s territory.
Gross Domestic Product (GDP)
Measure of the total value of the officially recorded goods and services produced by the citizens and corporations of a country in a given year.
Gross National Income (GNI)
Measure of the monetary worth of what is produced within a country plus income received from investments outside the country.
** Most common measurement used today.

7. Gross National Income Per Capita
GNI per capita is one of the best single measures of economic development.

8. Issues with Measuring Economic Development
All measurements count the:
Formal Economy – the legal economy that governments tax and monitor.
All measurements do not count the:
Informal Economy – the illegal or uncounted economy that governments do not tax or keep track of.

9. Other Ways of Measuring Development
Occupational Structure of the Labor Force
Productivity per Worker
Transportation and Communications
Facilities per Person
Dependency Ratio

10. Dependency Theory
The political and economic relationships between countries and regions of the world control and limit the economic development possibilities of poorer areas.
-- Economic structures make poorer countries dependent on wealthier countries.
- Little hope for economic prosperity in poorer countries.

11. Stages of Economic Development
According to Walt Rostow’s view, now regarded as overly simplistic, places and regions can be seen as following parallel courses within a world that is steadily modernizing.

12. Three Tier Structure Core Periphery Semi-periphery
Processes that incorporate higher levels of education, higher salaries, and more technology
* Generate more wealth in the world economy
Periphery
Processes that incorporate lower levels of education, lower salaries, and less technology
* Generate less wealth in the world economy
Semi-periphery
Places where core and periphery processes are both occurring. Places that are exploited by the core but then exploit the periphery.
* Serves as a buffer between core and periphery

14. Barriers to Economic Development
Low Levels of Social Welfare
Trafficking
Foreign Debt
Structural adjustment loans
Political Instability
Widespread Disease
Malaria

15. Process of Regional Economic Growth
Geographical path dependence
Initial advantage
External economies
Localization economies

16. Regional Economic Decline
Spread effects
Import substitution
Deindustrialization

17. The Global Assembly Line
Transnational corporations
Conglomerate corporations
< The annual sales figures of many of the world’s largest corporations exceed the Gross National Income of some countries.

18. Toyota’s Global Assembly Line
Toyota’s global production strategies

19. Flexible Production Systems
The strategies of transnational corporations are an important element in the transition from Fordism to Neo-Fordism in much of the world.
Fordism
Neo-Fordism
Flexible production systems
Just-in-time production

20. Industry and Services
Chapter 12

21. Industrial Revolution:
a series of inventions that brought new uses to known energy sources, new machines to improve efficiencies and enable other new inventions.
eg. steam engine
iron smelting
water pump

22. Beginning of Industrial Revolution
When and where did the industrial revolution begin?
In Great Britain in the mid to late 1700s
Why Great Britain?
Flow of capital
Second agricultural revolution
Mercantilism and cottage industries
Resources: coal, iron ore, and water power

23. Diffusion to Mainland Europe
In early 1800s, innovations diffused into mainland Europe.
Location criteria: proximity to coal fields
connection via water to a port
flow of capital
Later Diffusion
In late 1800s, innovations diffused to some regions without coal.
Location criteria: access to railroad

24. Diffusion of Industrial Revolution

25. Location Theory
Location Theory – predicting where business will or should be located.
Considers:
Variable costs
Friction of distance

26. Location Models Weber’s Model Hotelling’s Model Losch’s Model
Manufacturing plants will locate where costs are the least (least cost theory)
Theory:
Least Cost Theory
Costs: Transportation, Labor, Agglomeration
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

27. Losch’s Model
Zone of Profitability

28. Major Manufacturing Regions of North America

29. Major Manufacturing Regions of Russia

30. Major Manufacturing Regions of East Asia

31. Post-Fordist
Fordist – dominant mode of mass production during the twentieth century, production of consumer goods at a single site.
Post-Fordist – current mode of production with a more flexible set of production practices in which goods are not mass produced. Production is accelerated and dispersed around the globe by multinational companies that shift production, outsourcing it around the world.

32. Time-Space Compression
Through improvements in transportation and communications technologies, many places in the world are more connected than ever before.

33. Time-Space Compression
Just-in-time delivery
rather than keeping a large inventory of components or products, companies keep just what they need for short-term production and new parts are shipped quickly when needed.
Global division of labor
corporations can draw from labor around the globe for different components of production.

34. Deindustrialization
This derelict steel mill in New Jersey is testament to the downward economic spiral.

35. Deindustrialization –
a process by which companies move industrial jobs to other regions with cheaper labor, leaving the newly deindustrialized region to switch to a service economy and work through a period of high unemployment.
Abandoned street in Liverpool, England, where the population has decreased by one-third since deindustrialization

36. Geographical Dimensions of the Service Economy
New Influences on Location:
Information technologies
Less tied to energy sources
Market accessibility is more relevant for some and less relevant for others because of telecommunications
Presence of Multinational Corporations

37. Wal-Mart
Requires producers of goods to locate offices in the Bentonville, Arkansas (Wal-Mart’s headquarters) area in order to negotiate deals with Wal-Mart.
Proctor & Gamble put their office in nearby Fayetteville, Arkansas.
How does the presence of these companies in the region change the region’s economy and its cultural landscape?

38. Nike
Headquartered in Beaverton, Oregon, Nike has never produced a shoe in Oregon. Beginning in the 1960s, Nike contracted with an Asian firm to produce its shoes.
Skopje, Macedonia
The swoosh is ubiquitous, but where is the shoe produced?
Nike has a global network of international manufacturing and sales.

39. 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.

40. Globalization and the Geography of Networks
Chapter 14

41. What is Globalization? A set of processes that are:
increasing interactions
deepening relationships
heightening interdependence
without regard to
country borders.
A set of outcomes that are:
unevenly distributed
varying across scales
differently manifested
throughout the world.

42. Globalization
Geographer Andrew Kirby explains that with globalization, we are living “not so much in a world without boundaries, or in a world without geography – but more literally, in a world, as opposed to a neighborhood or a region.”

43. Networks
Manuel Castells defines networks as “a set of interconnected notes” without a center.
Time-Space Compression
Global Cities

44. World Cities most Connected to New York City
This map shows the 30 world cities that are the most connected to New York City, as measured by flows in the service economy.

45. Networks in Development
Nongovernmental Organizations (NGOs) have created a web of global development networks.
Participatory Development – idea that locals should be engaged in deciding what development means for them and how to achieve it.
Gets back to “What is development and how do we measure it?”

46. Nongovernmental Organizations (NGOs) entities that operate independent of state and local governments, typically, NGOs are non-profit organizations. Each NGO has its own focus/set of goals.
Microcredit program:
loans given to poor people, particularly women, to encourage development of small businesses.

47. Dollarization –
Abandoning the local currency of a country and adopting the dollar as the local currency.
El Salvador went through dollarization in 2001

48. Maquiladora Centers
Cheap labor and tax breaks for firms manufacturing and assembling good for re-export have made many Mexican border towns attractive to U.S. companies.

49. Globalized Office
Institutionalization of savings; large pools of capital
Banks with overseas branches (i.e., OPEC)
Print more money, causing inflation
Governments lift restrictions and regulations in banking and finance
U.S. trade deficits (the debt ceiling has been raised to $9 trillion)
“Hot” money is globally laundered
A call center in Bangalore, India
Hyundai Maquiladora, Tijuana, Mexico

50. Government-created Island of Development
Malaysian government built a new, ultramodern capital at Putrjaya to symbolize the country’s rapid economic growth.

51. Corporate-created Island of Development
The global oil industry has created the entire city of Port Gentile, Gabon to extract Gabon’s oil resources.

52. Networks in Media
Vertical integration – a corporation that has ownership in a variety of points along the production and consumption of a commodity chain.
eg. Media Companies
Goal is synergy, the cross promotion of
vertically integrated goods.

53. Networks in Media

54. Networks of Retail Corporations
Horizontal integration – ownership by the same firm of a number of companies that exist at the same point on a commodity chain.
eg. The Gap (Banana Republic, Old Navy)
Global retail corporations have more connections to the local around the world than global manufacturing corporations. Retail stores create a local presence.

55. Identities in a Globalized World
Identity – how we make sense of ourselves
We have identities at different scales.
Globalized networks interlink us with flows of information and global interaction.
In a globalized world, a growing number of people are “making sense of themselves” within the context of the globe.

56. Personal Connectedness
When a tragedy occurs somewhere in the world, people have the desire to:
personalize it.
localize it.
In the process of personalizing and localizing a tragedy, a new global awareness can be created.

57. Personal Connectedness
When a death or tragedy happens, how do people choose a local space in which to express a personal and/or global sorrow?
Short term = spontaneous shrines
Longer term = permanent memorials

58. Landscapes of Violence and Tragedy Geographer Ken Foote draws from extensive fieldwork to understand how Americans memorialize tragedy. Arlington National Cemetery (right) where thousands came to pay respects to Jacqueline Kennedy Onassis, who had recently died.

59. The Process of Memorializing Place
Whether and how quickly a place is memorialized depends on:
funding
debate over what to build
who to remember
whether people want to remember the site