Chapter 12 Deblji Notes

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Chapter 12 Deblji Notes by Mind Map: Chapter 12 Deblji Notes

1. How Have the Character and Geography of Industrial Production Changed?

1.1. Globalization: a set of processes that are increasing interactions, deepening relationships, and heightening interdependence without regard to country borders

1.2. Globalization is also a set of outcomes that are felt from these global processes

1.2.1. Outcomes that are unevenly distributed and differently manifested across the world

1.2.2. The roots of globalization Improvements in transportation technologies Steam Ship Railroad Improvement in communication technologies Telegraph Telephone

1.3. Fordist Production

1.3.1. The manufacturing boom of the 20th century can be traced in part to early innovation in the production process. Mass-production assembly line was on or the most significant pioneered by Henry Ford. allowed inexpensive production machines replased people unskilled workers worked here

1.3.2. Most common from 1945 to 1970

1.3.3. Fordist: highly organized and specialized system for organizing industrial production and labor. Named after automobile producer Henry Ford, Fordist production features assembly -line production of standardized components for mass consumption, where each worker is assigned one specific task to perform repeatedly The Fordist period is marked by a surge in mass production mass consumption

1.3.4. Ford's goal was to mass produce goods at a price point where his workers could afford to purchase them

1.3.5. Vertical integration: practice where a single entity controls the entire process of a product, from the raw materials to distribution common during the Fordist period the Ford Motor Company is and example of this because it started with raw materials

1.3.6. Friction of distance: the increase in time and cost that usually comes with increasing distance Explains why certain manufacturing activities are located where they are: close to the materials they need (Distance Decay)

1.3.7. Agglomeration Alfred Marshall (1842-1924) A leader in economic theory who is often credited with pioneering the field of industrial location theory.

1.4. Flexible Production and Product Life Cycle

1.4.1. As the global economy became more integrated and transportation costs decreased, the advantages of concentrating production in large-scale complexes declined.

1.4.2. post-Fordist refers to the flexible production model began in the later third of the 20th century

1.4.3. Flexible production system: a system of industrial production characterized by a set of processes in which the components of goods are made in different places around the globe and then brought together as needed to meet consumer demand designed to respond to consumers who want the newest/best/greates offering a custom offering that helps distinguish them from other consumers

1.4.4. Commodification: the process though which something is given monetary value The longer a product is out there the more firms are producing the producing, lowering the price (mobile tablet example) Product life cycle: The stages through which goods and services move from the time they are introduced on the market until they are taken off the market Television example After WWII, commercial production of television sets started The tv production industry has 3 key elements During the 70s, countries were moving their firms because the assembly stage in that location was the most labor intensive In the 80s, japan producers moved their firms to Europe and the U.S.

1.5. The Global Division of Labor

1.5.1. Global Division of Labor: phenomenon whereby corporations draw from labor markets all over the world, made possible by the compression of time and space through innovations in communication and transportation systems Moved because... labor is concentrated in the (Semi-)Periphery to take advantage of lower labor costs research and development is mainly located in the core Can also be moved to take advantage of... infastructure skilled labor accessible markets Research and Development is mainly located in the core.

1.5.2. Time-Space Compression Geographically the time-space conversion is the easiest way to compare the dramatic temporal and spatial changes taking place in the contemporary global economy based on the idea that developments in communication and transportation technologies have accelerated the speed with which things happen and made the distance between places less significant David Harvey (coined the term) argues modern capitalization has accelerated the pace of life and so changed the nature of the relationship between places that "the world seems to collapse inwards on us" Time-Space compression has fundamentally altered the division of labor. When the world was less interconnected, most goods where produced close to raw materials and to the point of consumption. Just-in-time delivery: method of inventory management made possible by efficient transportation and communication systems, whereby companies keep on hand just what they need for near-term production, planning that what they need for longer-term production will arrive when needed Spatial fix: The movement of production from one site to another based on the place-based cost advantages of the new site. "Distance is neither determinate nor insignificant as a factor in production location decisions" - David Harvey

1.5.3. Labor Divisions Periphery: most nultinational corporations have moved the labor-intensive manufacturing, particularly assembly actives, to peripheral countries where labor is cheap regulations are few tax rates are lo. Core: highly mechanicalized and technology sophisticated manufacturing Research and development activities large labor forces employed in the tertiary (service) sector of the economy

1.5.4. A large part of business decision making today focuses on sourcing, on where to get the component parts that are eventually assembled

1.5.5. Business magizines and textbooks discuss nimble sourcing decisions, proving that not only is production flexible, but the sourcing is too.

1.5.6. Outsourced: to turn over production processes to a third party; therefore not all stages of production happen in one location

1.5.7. Offshore: to outsource production processes to a third party located outside the of industry's home country - ex. Nike shoes are designed in U.S. but assembled in Vietnam

1.5.8. Consumption is still concentrated in the core and in the wealthy and middle-classes of the semi-periphery.

1.5.9. Trade flows among countries in the periphery are typically low because, for perp. countries, the dominant flow of goods consists of exports to the core.

1.6. Made in America or Designed in America?

1.6.1. iPod commodity chain Components of an iPod are produced by companies in Japan, Korean, Taiwan, and China The Hard drive is produced by Toshiba (a Japanese company)(most expensive part) The microchip specially designed for Apple products is produced by PortalPlayer, a Californian company with offices in India

1.6.2. The iPod is produced using a global division of labor because it is manufactured throughout all parts of the globe through a process.

1.6.3. Apple gets $80 from each iPod sold

1.7. Major Influences on the Contemporary Geography of Manufacturing

1.7.1. Factors that impact industrial location wages transportation costs and options regulatory constraints expertise access to energy

1.7.2. Transportation efficient transportation systems enable manufacturers to purchase raw materials from distant sources and to distribute finished products to a widely dispersed potation of consumers. Intermodal connections: places where two or more modes of transportation meet (including air, road, rail, barge, and ship) container system: goods are packed in containers that are picked up by special, mechanized cranes from a container ship at and intermodal connection and placed on the back of a semitrailer truck, on a barge, or on a railroad car. Lowered costs increased flexibility

1.7.3. Benelux Belgium, the Netherlands, and Luxembourg Jacques Charlier - studied major changes to the Benelux transport system and the role containerization played in these changes. Stressed the importance of containerization to the grown of sea trade in the benelux ports explained the location advantage of Rotterdam

1.7.4. Regulatory Circumstances Regional trade organizations have trade agreements that influence where imported foods (and components of goods) are produced. NAFTA EU WTO MERCOSUR SAFTA CARICOM ANDEAN AFTA COMESA close to 300 regional trade organizations exist WTO: works to negotiate rules of trade among the member states, that push the world in the direction of free trade, typically dismissing import quota systems and scourging protection by a country of its domestically produced goods Whether regional or global, trade agreements directly affect the location of production and what is produced in a place

1.7.5. Energy The energy source of fossil fuels is most critical to industry today A huge system of pipelines and tankers delivers oil and natural gas to manufacturing region throughout the world today. U.S combustion of petroleum and natural gas today is about 20% of the annual world total. Countries with large reserves of oil and natural gas occupy a special position in the global economic picture playing a key role in the industrial boom of the 20th century Saudi Arabia Kuwait Iraq Russia etc The U.S. and GB involved and invested in these countries because they have oil and gas that they don't have. Cheaper to import Natural Gas could be the new industry helping to reduce U.S. reliance on foreign oil

1.8. New Centers of Industrial Activity

1.8.1. Deindustrialization: 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 to work through a period of high unemployment

1.8.2. The Pacific Rim: synonymous with manufacturing ALL the islands, countries, provinces, and cities forming the Pacific Ocean are caught up in a frenzy of industrialization that has made the term

1.8.3. The Rise of East Asia The 4 Tigers (of E and SE Asia) S Korea Taiwan Hong Kong Singapore Newly industrializing countries: countries in the transition stage between developing and developed countries. Newly industrializing countries typically have rapidly growing economies

1.8.4. The Chinese Juggernaut China's major industrial expansion occurred during the communist period Under state planning rules, the ES district (Manchuria now called Dongbei) became China's industrial heartland Shanghai and the Chang J(or F)gang District(contained both Shanghai and Wuhan) became the second industrial heartland Firms are interested in locationg their manufacturing in China because enormous labor force comparatively low wages Industrialization changed cultural landscapes by introducing more educated people, so then there is schools and creates a ripple effect creating an urban center. The "Rust belt" of China is the NE The Chinese government are pushing industrialization into the interior of the county "Chinese economic juggernaut": still relies on exports and foreign investment, also a social and environmental crisis in China that could destabilize their economic power "None of the foregoing means that china will inevitable become the dominant power of the 21st century." meaning China is not ready to become a dominant power, there are still so many things that need to be fixed

1.8.5. The Wider World Over the past decade, manufacturing has surged in S and SE Asia South Africa Parts of Central and South America BRICS - each country are evidence of a shift in global economic power away from the traditional economic core Brazil Russia India China South America

1.8.6. Where from Here? "We are entering an era characterized by the 'end of geography'... 'the world is flat' " meaning that a combination of technological changes and developments in the global economyy have reduced the significance of location and made place differences increasingly insignificant. Wht is needed is a greater understanding of how places have changed as a result of... new production methods new corporate structures new patterns of industry an examination of how the interplay between global processes and local places is creating opportunities and constraints for different parts of the planet

2. How Have Deindustrialization And The Rise of Service Industries Altered Global Economic Activity

2.1. Service industries (tertiary industries) they scope the range of services that are found in modern societies.

2.2. quaternary industries: processing, and manipulation of information and capital (finance, administration, insurance, legal services, computer services)

2.3. quinary industries: for activities that facilitate complex decision making and the advancement of human capacities (scientific research, higher eduction, high-level management)

2.4. postindustrial:The rapid growth of the Quaternary, and Quinary sectors.

2.5. Aspects of the changing economy

2.5.1. the expanding service sector in the core economics

2.5.2. the increasing mechanization of production

2.5.3. the growth of large multinational corporations

2.5.4. dispersal of the production process

2.6. Geographical Dimensions of the Service Economy

2.6.1. Deindustrialization: A process by which companies move industrial jobs to other regions with cheaper labor, leaving the newly deindustralized region to switch to a service economy and to work through a period of high unemployment.

2.6.2. In the first decade of the 21st century these regions accounted for more than 75% of the world's total output of manufactured goods E Asia W Russia and Ukraine W Europe North America

2.6.3. downsides of large-scale deindustrialization is job los because they can't reinvent themselves

2.6.4. Rust Belt: The northern industrial states of the United States, including Ohio, Michigan, and Pennsylvania, in which heavy industry was once the dominant economic activity. In the 1960s, 1970s, and 1980s, these states lost much of their economic base to economically attractive regions of the United States and to countries where labor was cheaper, leaving old machinery to rust

2.6.5. Sun Belt: U.S. region, mostly comprised of southeastern and southwestern states, which has grown most dramatically since World War II

2.6.6. New Patterns of Economic Activity Locational influences Tertiary services Quaternary services Quinary services

2.7. High-Technology Clusters

2.7.1. High tech Corridor: area set aside by local or state government to benefit from lower taxes to provide high technology jobs California Silicon Valley: population benefits from jobs, corporations benefit from low tax status Boston Route 128: Harvard University and NIT supported by the federal government for growth in surrounding areas. Washington DC: HQ to technology industries because it brings ing great business and infrastructure to the areas, then the area developes

2.7.2. Growth pole: industries designed to stimulate growth through the establishment of various supporting industries

2.7.3. Technopole: an area with a cluster of firms conducting research, design, development, and/or production in high-tech industries, for example, Silicon Valley in CA

2.7.4. Important locational considerations for high tech corridors Transportation and Communication

2.8. Tourism Services

2.8.1. tourism is the world's largest service sector industry Expected to grow because of expanding incomes and liesure time

2.9. Place Vulnerabilities in a Service Economy

2.9.1. vulnerabilities that service industries face reccession service jobs are mechanicalized

2.9.2. root causes to the dramatic economic downturn in 2008 banks gave risky loans to people who could not afford them. They then lost their homes and a snowball effect happened were then jobs were lost, no one spending money. People lived on borrowed money

3. Field Note

3.1. Giant worldwide Industries such as Nike can be found in even the poorest of areas like in Skopje, Macedonia in Europe

3.1.1. Worldwide: 30,000 people work directly for Nike

3.1.2. 800,000 workers are employed by its 700 contract factories in 52 countries

3.2. Nike started Beaverton, Oregon and is now the World H.Q. for Nike

3.3. As Nike got bigger within the last 100 years (Started in Beaverton, Oregon)

3.3.1. Nike grew to be the world’s leading athletic shoes manufacturer and shared 40% of the athletic shoe market

3.3.2. Employment numbers skyrocketed

3.3.3. Manufacturing plants were established in Asia and beyond

3.3.4. Provided many jobs for people in Beaverton, Oregon (Such as: computer technicians, marketing and sales specialists, financial administrators, etc.)

3.4. Today, the production and marketing of industries involves and elaborate global network of international manufacturing and sales.

3.5. The contemporary geography of industry and services is a product of shifting forces that have shapes production and consumption over time.

4. Where Did the Industrial Revolution Begin, and How Did it Diffuse?

4.1. Manufacturing goods began long before the Industrial Revolution (workshops and through merchants who traded)

4.1.1. Towns and Villages of India Workshops produced goods made of iron, gold, silver, and brass India’s art was in demand wherever it could be sold. India’s textiles, made on individual handlooms and spinning wheels were some of the best on the globe British textile makers rioted in 1721, demanding legislative protection against imports from India they were so good

4.1.2. Rural Great Britain Spun threat or wove fabric during winter months Quality varied accordingly

4.1.3. Europe could not math the price and quality of products from other parts of the world Gained control of local markets in these areas and buries local industries Flooded the local market in Asia and Africa because of inexpensive products and forcing their colonies to purchase imported good.

4.1.4. The Industrial Revolution During the 1700s, markets of European goods were grown, especially in the colonies meaning producers needed better machines (especially for spinning and weaving) Industrial Revolution: a series of improvements in industrial technology that transformed the process of manufacturing goods Did not involve an energy source (i.e. foot pedals New inventions that brought new uses for energy sources Energy is generate from coal by burning the coal to create steam New machines to improve efficiencies (steam engines) Water pumps and railroads Wealth to help pay for inventions was brought to W Europe by an expanding trade network. Abraham Darby in 1709 in Coalbrookdale, England Found a way to smelt iron by burning coal in a vacuum-lik0 environment The Steam Engine Multitude of uses and dramatic impact on industry England had the know-how and the experience, and the capital to supply helped put The invention of the railroad and the steam ship majorly, along with the fact that the amount of British influence around the world at it’s peak In the early years of the revolution and before the railroad, manufacturing plants needed to be located close to ports where raw materials could arrive and finished products could depart. Densely populated and urbanized industrial regions developed near the coal fields in Britain

4.1.5. Diffusion to Mainland Europe In the early 1800s, innovation of Britain’s Industrial Revolution diffused into mainland Europe Needed locational criteria for industrial zones that remained crucial to industrial development A belt of major coal fields extends from W to E through mainland Europe, roughly along the S margins of the N European Lowland Colonial Empires gave France, Britain, Belgium, the Netherlands, and Germany access to the capital necessary to fuel industrialization and in some cases the raw materials necessary for production Where they got money to finance their industrialization *The Industrial Revolution diffused in EAST from Great Britain* (occurred during the 2nd ½ of the 19th century) Once railroads were established, urban areas with large markets expanded (i.e. Paris and London) London Paris They both remain important industrial complexes because of their commercial and political connectivity to the rest of the world. Germany is Europe’s leading industrial power and still ranks among the world’s leading producers of coal and steel.

4.1.6. Diffusion beyond Europe Primary Industrial Regions: Consists of industrial development with subsidiary clusters (W & C Europe; E North America; Russia and Ukraine, and E Asia) The 4 major industrial regions in the world by 1950 (E) North America Russia and Ukraine East Asia Western and Central Europe North America Only serious rival to Europe Began in New England during the colonial period The NE States were not rich in mineral resources. Industries developed along the Great Lakes region where canal, river, and lakes connected with railroads on land to move resources and goods in and out of industrial centers U.S. industries got its energy from coal (never seemed to be a shortage in the U.S.) Russia and Ukraine The St. Petersburg region is one of Russia’s oldest manufacturing centers East Asia Japan became one of the world’s leading industrial countries in less than a century.