Industry By: Maria Kryuchkova & David Melton Chapter 11 Industry By: Maria Kryuchkova & David Melton

Key Issue 1: Where did industry originate? Industrial Revolution: process of change in which manufacturing of goods takes place in factories. The root was technology Inventions that changed how products where manufactured Expansion in productivity Started in Northern UK in 1750 New political, social, and economic inventions Occurred over decades Cottage industry: home based manufacturing Steam engine was made in 1769 (gigantic step) James Watt in Glasgow, Scotland.

Diffusion of the Industrial Revolution Iron industry bloomed first (extensive use of steam engine) Iron= hard to produce until the steam engine was invented 1st iron forge was in Fareham, England Puddling and Rolling were two new methods invented to remove impurities from the iron Iron and Steel making needs energy, energy = wood Not enough wood = use coal Iron dispersion changed to clustered areas in Yorkshire, Stafford, Clydeside, South Wales Engineering: parts and machinery manufactured started in 1795

More Diffusion Crap  Transportation: canals and railways were critical in the Industrial revolution Allowed bulk movement of materials and products Canals= inexpensive and fast, started in 1759 Railways started in 1784 Textile: manufacturing woven fabrics, spinning frame and carding Factories became more clustered and specialized Chemical industry: bleaching- changed from sun/boiling bleaching to chemical (changed color of the cotton) Food Processing- From chemical industry Canning was invented- tin can- boiled water killed bacteria then was sealed

Diffusion from UK Eastward through Europe and Westward to North America Belgians= coal mining French= coal furnace Germans= Industrial Cotton Mill Political instability limited diffusion in Europe (French Rev.) (Napoleonic Wars) Hurt mostly railways 1800’s- Italy, Netherlands, Russia, Sweden 1900’s Belgium, France, Germany

Diffusion to US Dependent on imports of manufactured goods = expensive Labor and capital were scarce Textile- 1791- grew rapidly Major country to industry in 1860 Focused on Textile, Food and Lumber manufacturing then came Steel and Iron later on

Key issue 2: WHERE IS INDUSTRY DISTRIBUTED? Three-fourths of the world’s industrial production in concentrated in: North America Europe East Asia

NORTH AMERICA: Manufacturing in NA is concentrated in the northeastern quadrant of the US and southeastern Canada. This takes up only 5% of the land area, but contains a third of the population and about two thirds manufacturing output. Major industrialized Areas Within North America: New England, Middle Atlantic, Mohawk Valley, Pittsburgh- Lake Erie, Western Great Lakes, St.Lawrence Valley-Ontarie Peninsula. Changing Distribution of US Manufacturing: manufacturing belt declined in the traditional Northeast manufacturing belt and grown in the South and West. Southeastern states are now known as the right-to-work states, they have passed laws preventing a union and company from negotiating a contract that requires workers to join a union as a condition of employment

EUROPE: has four distinct districts because European countries have competed to develop their own industry. Major Industrialized Districts Within Europe: Rhine-Ruhr Valley, Mid- Rhine, United Kingdom, Northern Italy, Central Industrial District, St. Petersburg, Eastern Ukraine Industrial District, The Volga Industrial District, The Urals Industrial District, Kuznetsk Industrial District, Silesia.

EAST ASIA: is the most heterogeneous industrial region from the perspective of level of development. China: World’s most populous country. Major manufacturer of steel, farm machinery, construction materials Leading exported leader of clothing in the US Abundant reserves of coal, iron ore, other minerals. Japan: One of the world’s wealthiest countries Manufactures high quality products at low costs Has reputation for high quality electronics, precision instruments, and other products that require well-trained workers.

Key Issue 3: Why do industries have different distributions? Situation Factors: Involve transporting materials to and from a factory. Firm seek a location that minimizes the cost of transporting inputs to the factory and finished good to the consumers. Location near inputs- industry is put near resources. Copper- is an input industry in North America Bulk reducing industry: economic activity in which the final product weighs less than its inputs

More zzz… huh what? Location near markets- industry is placed near market Bulk gaining industry: economic activity in which the final product weighs more than its inputs. Ex: soda bottling Single market: products are sold primarily in one place. Ex: High Style Apparel Perishable Products: needs to be close so products don’t spoil. Ex: milk

Is it over yet? Transport: find the cheapest and fastest way possible Ship- very long distances over water Truck- short distances Railway- long distances over land Air- fast, small bulk, high value products (has overnight delivery) Break of Bulk: Location where transport methods can be changed and several materials meet.

Site Factors: Land, labor, capital, and unique characteristics of land all vary among locations. Land- factories are located in suburbia or rural areas Land is cheaper in those areas More land is needed for a one story factory which will run more efficiently Near energy sources Electricity rates for the area Climate and land type can affect the decision too

More Site crap Labor-cost Labor intensive cost: labor cost is high % of expenses the more skilled labor the more it costs more high skill and high pay now Fordist: one person does one task in a factory Post-Fordist: need skilled workers to do wide variety of things Ex: Textile & Clothing, they have several steps 1) spin fibers, 2) weave into fabric, 3) Cut and sew into clothing Synthetic fiber is made in MDC’s LDC’s make 86 % of the worlds cotton and 76% of the worlds yarn The US moved their factories from NE to SE because the labor was cheaper.

That’s right you guessed it… Capital- banks loan out money to industries in the area Silicon Valley: area known for loaning out the most money to industries New Idea in LDC’s which is helping Government and communities try to persuade industries to settle in an area through: tax cuts, extra loans, or payment. Etc.

Exceptions Unique Locations: some locations picked can’t be explained through those methods. Corporation goals the factors may not have a huge impact History Technology

Key Issue 4:WHY DO INDUSTRIES FACE PROBLEMS? Industrial problems from a global perspective Industrial problems in more developed countries Industrial problems in less developed countries

¿Problemos? Industrial Problems from a global perspective: most basic problem is a gap between the world demand for products and the the world capacity to supply them. Stagnant Demand: changing technology has declined demand on some industrial products, quality over all keeps increasing and bypassing quality of older products, no population growth in MDC’s

¿Mas Problemos? Increased Capacity World Wide: Although dement for products such as steel has stagnated during the past quarter century, global capacity to produce them has increased. Higher industrial capacity is primarily a result of two trends: the global diffusion of the industrial revolution and the desire by individual countries to maintain their production despite a global overcapacity. Industrial Problems in More Developed Countries: all have a common goal, make their industry competitive in the increasingly integrated global economy. Impact of Trading Blocks: in MDC’s competition occurs mainly in trading blocks and not individual countries. The three main trading blocks are the Western Hemisphere, Western Europe, and East Asia.

¿No Mas Por Favor? Disparities between trading blocs: within the major trading blocks, industries are concentrated in somne regions and sparse elsewhere. One courty or region within a country might have lower levels of income and amenities because it has less industry than the other regions within the trading block. Industrial Problems of Less Developed Countries: major concern is the agricultural based economies. LDCs try to improve individual development because it can raise the value of exports and generate money the countries need to buy other products. New problems for LDC’s: new industries must sell primarily to consumers inside their own country New international division of labor: The process of MDCs transferring jobs to LDCs because of cheap labor with low skilled workers (for the most part highly skilled workers are located in MDCs)