 Modernization Theory  Rostow’s Model of Development  5 stages of economic development  International Trade Approach  Dependency Theory  Wallerstein (“World Systems” or “Capitalist World Economy”)  Named this because it is an opposition to Modernization Theory (claims modernization theory reinforces the dominance of the core countries)  Self-Sufficiency Approach  Country spreads investment equally (approx.) across all sectors of its economy in all regions to promote development from within RECAP DEVELOPMENT: THEORIES & MODELS

Part 1 INDUSTRY

 3 production factors:  Land  Land costs? Available Resources?  Labor  Labor-intensive? Skilled labor?  Capital  Where will we get the money to start up? SITE FACTORS

 Factories are more likely to be located on suburban or rural land b/c it is much cheaper for retail  Industries are more attracted to certain parcels of land with accessible energy resources.  Coalfields  Electricity SITE FACTOR: LAND

 labor costs = high percentage of expense  Ex: textile clothing industries  Clothing once was made by MDCs but now is made in LDCs  US textile and clothing moved to places where they can find low cost employees SITE FACTOR: LABOR LABOR-INTENSIVE INDUSTRIES

 Some firms require workers to perform highly skilled tasks  Ex: people manufacturing electronics  Many industries are located with relative skilled labor to introduce new work rules. SITE FACTOR: LABOR SKILLED LABOR INDUSTRIES

 Fordist Production (Fordism)  mass production in which each worker is assigned one specific task to perform repeatedly  Post- Fordist Production (Flexible Production)  Adoption by companies of flexible work rules such as the location of workers to teams that perform a variety of tasks SITE FACTOR: LABOR FORDIST & POST-FORDIST PRODUCTION

FordismFlexible Production Maximize inventory held in warehouseMinimize inventory; no need for warehouses Vertical integrationOutsourcing Producer-driven commodity chainConsumer-driven commodity chain Highly standardized product designMade-to-order product design Strongly hierarchical management styleFlat management style Minimally skilled laborMulti-skilled labor Large labor forceSmaller and more efficient labor force SITE FACTOR: LABOR FORDISM V. FLEXIBLE PRODUCTION

 The ability to borrow money  Especially in LDC’s  Financial Industries & many LDC’s are short of funds so they must seek loans from banks  Technology startups often need to convince venture capitalists to invest in their business SITE FACTOR: CAPITAL

 Situation Factors- involve transporting materials to and from a factory  Goal: minimize the cost of transporting inputs to the factory and finished goods to the consumers  Proximity to Resources:  Bulk-reducing industry: an economic activity in which the final product weights less than its inputs  Ex: copper Industry SITUATION FACTORS

 Bulk-gaining Industry = makes something that gains volume or weight during production  Ex: Soft- Drink Bottling  Single-Market Manufactures  Manufacturers of car parts  Perishable Products  milk, daily newspapers, or items from the bakery OTHER SITUATION FACTORS: PROXIMITY TO MARKETS

 Trucks  short distance; it’s cheap to load and unload  Train  long distances = cheaper to travel  Ship  even cheaper to travel long distances  Air  fastest mode of transportation but most expensive  Pipeline  efficient & safe in movement of gas or liquid  Some have to change transportation modes and look for a break-of bulk point Other Situation Factors: Transportation

Site FactorsSituation Factors Labor costs and availabilityProximity to the market Land availability, accessibility, value, and taxesTransportation options and costs Energy costs (e.g., oil, electricity)Agglomeration effects Local environmental regulationsPolitical policies (e.g., right-to-work laws) Local amenities or tax advantagesOther (e.g., proximity to schools for families of employees) SITE & SITUATION FACTORS IN INDUSTRIAL LOCATION

 They can locate in a wide variety of places  They can be located in many places without change in their cost of transportation, land, labor, or capital.  Ex: Communication through computers FOOTLOOSE INDUSTRIES