Chapter 12 Review

Industrialization Process of industrial development in which countries evolve economically, from producing basic primary goods to using modern factories for mass producing goods.

Industrial Revolution a series of inventions that brought new uses to known energy sources, new machines to improve efficiencies and enable other new inventions.

The Old Way… Cottage industry- an industry in which the production of goods and services is based in homes, as opposed to factories. Specialty goods- goods that are not mass produced but rather assembled individually or in small quantities.

Today … Britain, France, Germany, Russia, United States, Japan are Industrialized Countries.

Today… Britain, France, Germany, Russia, United States, Japan are Industrialized Countries. However, Industry is shifting to other countries. (Mostly semi-periphery)

Why? To take advantage of cheap labor and relaxed environmental standards. Makes goods cheaper for us to buy.

Deindustrialization Loss of industrial activity in a region. Suffer economically for a time

Deindustrialization Loss of industrial activity in a region. Suffer economically for a time Ex. Central Britain, American Midwest, The Great Lakes.

Deindustrialization leads to Creative Destruction. -the reinvestment of funds in new , profitable ventures and regions that were once used to fund ventures and regions that are now not as profitable.

Deindustrialization leads to Creative Destruction. -the reinvestment of funds in new , profitable ventures and regions that were once used to fund ventures and regions that are now not as profitable. Ex. Rust Belt to Sun Belt

Modern Investments E-commerce- web-based economic activities. Brick and mortar business- traditional businesses with actual stores in which trade or retail occurs; does not exist solely on the Internet.

Core Countries are shifting to Service Based Economies. -highly developed economies that focus on research and development, marketing, tourism, sales, and telecommunications.

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

variable costs- input cost in manufacturing that changes significantly from place to place in its total amount. Friction of distance- the increase in time and cost that usually comes with increasing distance.

Location and Cost Bulk gaining industries- industries whose products weigh more after assembly than they did previously in their separate parts. They keep production facilities close to their markets. Bulk reducing industries- industries whose final products weigh less than their separate parts . Production facilities locate close to sources of raw materials.

Location and Cost Footloose firms- manufacturing activities in which cost of transporting both raw materials and finished product is not important for determining the location of the firm. Break-bulk point- a location where large shipments of goods are broken up into smaller containers for delivery to local markets.

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

Agglomeration- grouping together of many firms from the same industry in a single area for collective or cooperative use of infrastructure and sharing of labor resources. Deglomeration- the dispersal of an industry that formerly existed in an established agglomeration

Conglomerate corporations- a firm that is comprised of many smaller firms that serve several different functions. Transnational corporations- a firm that conducts business in at least two separate countries; also known as multinational corporations.

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.