1. © 2011 Pearson Education, Inc. Chapter 12: Services The Cultural Landscape: An Introduction to Human Geography

2. © 2011 Pearson Education, Inc. Services Service = any activity that fulfills a human want or need with payment of money to those who provide it The service sector is inextricably linked to settlements A settlement is a permanent collection of buildings where people live, work and obtain services Settlements occupy less than 1% of the earth’s surface but most people reside in a settlement Why are settlements located where they are? Location of services is important for profitability Affluent regions tend to offer more services Both globalization and local diversity is evident in the provision of services

3. © 2011 Pearson Education, Inc. KEY ISSUE 1: WHERE DID SERVICES ORIGINATE? Three types of services Services in early rural settlements Services in early urban settlements

4. © 2011 Pearson Education, Inc. KI 1: Where Did Services Originate? Three types of services Consumer services About 44 percent of all jobs in the United States Services primarily for individual consumers, including education Business services About 24 percent of all jobs in the United States Services to other businesses Public services About 17 percent of all jobs in the United States Government employment, excluding education In the United States, all employment growth has occurred in the services sector from 1972-2009. In 2008 there was a huge recession that came about from a series of events: high real estate prices, poor judgements in lending by financial institutions, the invention of new financial services that included the buying and selling of risky assets, decisions by governments to eliminate regulations on lending institutions, and the unwillingness of financial institutions to make loans once the recession started.

5. © 2011 Pearson Education, Inc. Percentage of GDP from Services, 2005 Figure 12-1

6. © 2011 Pearson Education, Inc. Employment Change in the United States by Sector Figure 12-2

7. © 2011 Pearson Education, Inc. KI 1: Where Did Services Originate? Services in early rural settlements Early consumer services met societal needs Consumer and public services were likely the first services Examples = burial of the dead, religious centers, manufacturing centers of tools and clothing (treated here as services, not industries) Early public services probably followed religious activities Included services to defend the settlement’s territory and possessions. Early business services were probably established to distribute and store food Business services probably included transportation services and producer services to help and regulate trade. Services in early urban settlements Settlements originated in Mesopotamia in the Fertile Crescent Two theories: diffusion into Egypt, China, and the Indus Valley from Mesopotamia at an early date, OR, independent development in the separate heaths. All settlements were rural, based on agriculture

8. © 2011 Pearson Education, Inc. KI 1: Where Did Services Originate? Services in ancient cities Earliest urban settlements (e.g., Ur: means “fire”), eastern Mediterranean in 2500 B.C.E Oldest: the isle of Crete: Knossos, Troy in Asia Minor (Turkey), Mycenae in Greece Athens: First City State to achieve a population over 100,000 Spread of the Roman Empire promoted growth of urban settlements Rome: 250.000,population; speculation it may have reached 1 million Urban settlements declined with the fall of Rome in the 5 th century, C.E. Established centers of administration (Military, Civic, and Public Services) Services in medieval cities Urban settlements began to revive in after 11 th century European cities developed with feudalism Feudal lords gave residents charters with rights to establish independent cities in exchange for military service Urban markets expanded with other citiies Serfs farmed the lord’s land, and paid rent in the food they farmed in exchange for protection Largest settlements were in Asia The most populous cities in 10 th century: Baghdad (present day Iraq), Constantinople (Istanbul in Turkey), Kyoto (Japan), Changan and Hangchow (China)

9. © 2011 Pearson Education, Inc. KEY ISSUE 2: WHERE ARE CONTEMPORARY SERVICES LOCATED? Services in Rural Settlements Services in Urban Settlements

10. © 2011 Pearson Education, Inc. KI 2: Where Are Contemporary Services Located? Services in rural settlements Half of the world’s population lives in rural settlements Services are clustered in rural settlements Primarily centers for agriculture and small business services Two types Clustered rural settlements: Made up of homes, barns, tool sheds, and other farm structures, plus consumer services (religious structures, schools and shops Clustered rural settlements are often called villages Circular patterns of development comprise central open spaces surrounded by structures, with fields and lots surrounding the buildings in concentric rings Linear patterns of development are clustered along a river or a road. Fields extend behind the buildings in long narrow strips Clustered settlements in Colonial America Colonists built their villages (homes/public buildings) around an open area called a common Dispersed rural settlements In the United States Farmers working discontinuous fields rather than a continuous strip near where they lived A result of growing population and less land around the clustered settlements In Great Britain Enclosure movement: the British government consolidating small strips of land into a large, single owner farm Brought agricultural efficiency but destroyed self contained world of village life

11. © 2011 Pearson Education, Inc. Rural Settlement Patterns Figure 12-10 Circular Settlement in Germany Linear Settlement, or Long-Lot, (traditionally in France) for access to the river for all people Long-Lot Settlement in Quebec Equal Access to the river

12. © 2011 Pearson Education, Inc. KI 2: Where Are Contemporary Services Located? Services in urban settlements Differences between urban and rural settlements 1930s: Wirth defined a city as a permanent settlement with 3 characteristics Large size: In a rural setting a person knows most of their neighbors, but in an urban setting a person knows only a few people, and in specific roles related to the services they provide High population density People supported in an urban settlement through specialization: each person plays a role or performs a task to allow the complex urban system to function smoothly. People compete for survival in limited space Social heterogeneity within the population The larger the settlement, the greater the variety of people. More freedom in the urban settlement for the individual to be an individual The 3 characteristics still apply in LDCs, but the distinction between urban and rural residents has blurred. All but 1% of people in developed societies hold urban type jobs Universal ownership of telephones, computers and automobiles has reduced the differenced between urban and rural residents Process of residents moving to the “urban environment” is known as urbanization Increasing percentage of people in cities: High number reflects level of development Increasing number of people in cities: MDCs have more urban residents but 8 of the 10 most populous cities are in LDCs

13. © 2011 Pearson Education, Inc. Percentage of Population Living in Urban Settlements Figure 12-14

14. © 2011 Pearson Education, Inc. Urban Settlements With Populations of at Least 3 Million Figure 12-15

15. © 2011 Pearson Education, Inc. KEY ISSUE 3: WHY ARE CONSUMER SERVICES DISTRIBUTED IN A REGULAR PATTERN? Central Place Theory Market-Area Analysis Hierarchy of Services and Settlements

16. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Central place theory Characteristics A central place has a market area (or hinterland) surrounding the urban center Size of a market area Bigger centers serve a larger market area, providing more specialty, or high order goods, than smaller centers with smaller market areas First proposed by Walter Christaller (1930s) to explain the size and distribution of a competitive supply of goods and services to dispersed populations Chritaller’s Assumptions: All areas have an isotropic (flat) surface Rational behavior: people minimize distance they travel for goods Even distribution of population and resources All customers have similar purchasing power Transportation costs are equal I all directions Service and goods can be sold in all directions to a certain distance

17. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Central Place theory Definition: The Central Place is a market center for the exchange of goods and services by/among people from the surrounding area This market center is called a central place because it is centrally located in the area …in order to maximize the accessibility of customers (to the central place) from the surrounding area Simple basic services (e.g. grocery stores) are said to be of the low order Specialized services (e.g. universities) are said to be of high order Having a high order service implies there are low order services around it, but not vice versa Settlements providing low order service are said to be low order settlements Settlements providing high order services are said to be high order settlements The Sphere of influence is the area under the influence of the Central Place

18. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Central Place theory Maximizing accessibility is based on the Principle of Minimizing Transportation Costs Minimizing transportation costs is the feature that defines the geographic extent (the size) of a central place’s market area Range: the geographical extent of its market area – the distance that a customer will travel to purchase goods High transportation costs= decreased demand for the product High-range services: Specialized; people will travel great distances to use them Range; includes a large population (all people in the range are potential customers Threshold: Minimum population size required to maintain a service High Threshold activities: Low range, but they need large populations to support them Factors affecting the fall in threshold: 1.A decrease in population 2.Change in tastes 3.Introduction of substitutes

19. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Central Place theory Larger settlements are fewer in number The lager the settlement, the farther away a similar size a settlement is The larger the settlement, the higher the order of its services Deviations to the rules are: Tourist resorts that have a small population but large number of functions Dormitory or College towns have a large population but a small number of functions

20. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Market Area Shape The circular form of businesses’ market areas are not geographically optimal because a system of circular market areas leaves some “gaps” I customers/service areas are unserved) The gaps in a system of circular market areas can be removed by reducing the distance between businesses This results in an overlap of businesses’ market areas

21. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Market Area Shape The overlap in circular market areas yields to the principle of minimizing total costs to the customer Thus the market is “divided” at the circles’ intersections, and the optimal market area is the Hexagon (“least cost to the most customers, with maximum customers served) The breaking point is where the consumer is equidistant from two or more similar services (where the consumer is equally far from two or more centers)

22. © 2011 Pearson Education, Inc. Central Place Theory Figure 12-17 Illustration of why Central Place Theory uses hexagons to delineate market areas.. Circles are equidistance from the center, but leave gaps. Squares nest together without gaps, but are not equidistance from the center

23. © 2011 Pearson Education, Inc. “Daily Urban Systems” Figure 12-16 Demonstration that everyone in the U.S. has access to services in at least one large settlement

24. © 2011 Pearson Education, Inc. Market Areas, Range, and Threshold for Kroger Supermarkets Figure 12-18

25. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Market-area analysis Profitability of a location: The range and threshold together determine whether a good or service will be profitable in an area Compute the range: Survey residents to determine if they will travel up to 15 minutes to reach a service Compute the threshold: How much money must a service net to make a profit? What is the average amount the minimum number of people need to spend for the service to break even? (half of what the business needs to make a profit) Draw the market area: Draw a circle around the service location, adjusting for competitors. Count the number of people in the area. Do the numbers match your projected customer numbers? Optimal location within a market: The best location is the one that minimizes the distance for the largest number of people Best location in a linear settlement: Best location in a nonlinear settlement Gravity Model

26. © 2011 Pearson Education, Inc. Optimal Location for a Pizza-Delivery Service Figure 12-20 Read the caption under the picture on page 391

27. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Gravity Model Based on Newton’s Universal Law of Gravitation Formula: The number of people moving between places A and B is equal to the population of A multiplied by the population of B divided by the square of the distance between them In terms of Market Area: The model predicts that the optimal location of a service is directly related the to the number of people in the area and inversely related to the distance people must travel to access it. Prediction that consumers will behave in two patterns: The greater number of people living in a particular place the greater the number of potential customers for a service. The farther people are from a service, the less likely they are to use it

28. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Gravity Model Larger places draw more people than small places They attract more ideas and commodities Places closer together have a greater pull (connectivity) between them The largest cities will have more interaction between them Population and distance are inversely related As population goes up, distance matters less As population goes down, distance matters more

29. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern ? Hierarchy of services and settlements Small settlements are limited to customer services that have small thresholds, short ranges and small market areas because too few people live in small settlements to support services. Nesting Market areas in MDCs = a series of hexagons of various sizes 7 Different size settlements (market hamlet, township center, county seat, district city, small state capital, provincial head capital, and regional capital city) Distance between hamlets, 17 sq. miles Distance figures are higher for each increasing size within the hierarchy Nesting market areas work within cities as well Page 392 in the text book

30. © 2011 Pearson Education, Inc. KI 3: Why are Consumer Services Distributed in a Regular Pattern? Rank-size distribution of settlements Geographers observe that ranking settlements from largest to smallest (population) produces a regular pattern or hierarchy. The 2 nd largest city is ½ the size of the largest, the 4 th largest city is ¼ the size of the largest, and so on Formula: The nth largest settlement is 1/n the population of the largest settlement When plotted on a graph, the rank-size distribution follows a straight line Settlements in the U.S. and other MDCs mostly follow this rule Primate city rule: When the settlement hierarchy does not follow the rank-size rule. A primate city has more than twice the population of the second ranking settlement. Primate cities: several in Europe follow the primate city ranking hierarchy Rank-Size distribution is a Mathematical curiosity, but also an excellent indicator of the quality of life for the inhabitants of a country. Periodic markets: Vendors who come together regularly to provide goods and services to a community. Market times in LDCs follow regular patterns

31. © 2011 Pearson Education, Inc. Rank-Size Distribution in the United States and Indonesia Figure 12-23

32. © 2011 Pearson Education, Inc. KEY ISSUE 4: WHY DO BUSINESS SERVICES CLUSTER IN LARGE SETTLEMENTS? Hierarchy of Business Services Business Services in LDCs Economic Base of Settlements

33. © 2011 Pearson Education, Inc. KI 4: Why Do Business Services Cluster in Large Settlements? Hierarchy of business services Geographers distinguish 4 levels of urban settlements with 4 levels of Business Services (1. World Cities, 2. Command and Control Centers, 3. Specialized Producer-Service Centers, and 4. Dependent Centers) World Cities: Dominant World Cities: London, New York, and Tokyo Major World Cities: Chicago, Los Angeles, Washington D.C. in N. America, and Brussels, Frankfurt, Paris, and Zurich in Europe. Sao Paolo and Singapore the only ones in LDCs Secondary World Cities: 4 in N. America, 7 in Asia, 5 in Europe, 4 in Latin America, and 1 each in Africa and Oceania Services in world cities Business: clustering of services is a product of the Industrial Revolution Consumer: retail services with extensive market areas May include leisure services of national importance due to large thresholds, large ranges, and the presence of wealthy patrons. Public: world cities are often the center of national or international political power

34. © 2011 Pearson Education, Inc. World Cities Figure 12-25

35. © 2011 Pearson Education, Inc. KI 4: Why Do Business Services Cluster in Large Settlements? Business services in LDCs (peripheral regions) Offshore financial services: Small countries and microstates exploit niches in the circulation of global capital by offering the protection of off- shore financial services Two functions: Taxes: Taxes on income and capital gains. Tax Free Status regardless of nationality. The U.S. loses and estimated 70 billion in tax revenue each year Privacy: Secrecy laws can help individuals and businesses evade disclosure in their home countries Back offices: Business Processing Outsourcing (BPO) Processing insurance claims, payroll management, transcription work and other clerical activities LDCs are attractive because of: Low wages: Workers earn a few thousand a year; higher wages than most in their country, but lower compared to MDC standards Ability to speak English: Large Labor force fluent in English.

36. © 2011 Pearson Education, Inc. KI 4: Why Do Business Services Cluster in Large Settlements? Economic base of settlements Two types: Basic industries: Brings money into an urban place and gives the city its primary function Cities often build their economies around the basic sector, which brings money in from outside Flint, Michigan: Car Manufacturing Chapel Hill, N. Carolina: University Town, (UNC at Chapel Hill) Hollywood, CA: Film Industry Las Vegas, NV: Casinos Non-basic industries: Shifts money within the city, does not come from outside Teachers, janitors, fire departments, dry cleaners, and repair companies Largely responsible for maintaining a cities infrastructure The larger the City, the higher the percentage of non-basic employment jobs to meet the larger number of infrastructural needs Distribution of talent Individuals possessing special talents are not distributed uniformly among cities These “talents” are cultural, and are often more incentive for people to cluster in certain cities.

37. © 2011 Pearson Education, Inc. Economic Base of U.S. Cities Figure 12-28

38. © 2011 Pearson Education, Inc. Geography of Talent Figure 12-29

39. © 2011 Pearson Education, Inc. The End. Up next: Urban Patterns