© 2011 Pearson Education, Inc. Chapter 11: Industry

© 2011 Pearson Education, Inc. KI #1 Where is Industry Distributed? Origin of industry –Industrial Revolution – innovative engineers and mechanics, invention of hundreds of mechanical devices, expansion in productivity which resulted in higher standards of living Started in UK late 18 th century (late 1700’s) and diffused from there Impact of the Industrial Revolution especially great on iron, coal, transportation, textiles, chemicals, and food processing

© 2011 Pearson Education, Inc. Industry much more clustered in space than agriculture. Important factors o What are the characteristics of the land, labor, and capital o Location - Where are markets located and where are resources located Industry starting to shift from MDC’s to LDC’s – Global markets Main Points:

© 2011 Pearson Education, Inc. Diffusion of the Industrial Revolution Figure 11-2

© 2011 Pearson Education, Inc. Less than 1 percent of Earth’s land is devoted to industry Approximately ¾ of world’s industrial production is concentrated in 4 regions. –Europe Northwestern Europe and Eastern Europe Emerged in late nineteenth and early twentieth centuries –North America Industry arrived later but spread faster than in Europe Northeast U.S. and Southeast Canada –East Asia China and Japan

© 2011 Pearson Education, Inc. Industrial Regions Figure 11-3

© 2011 Pearson Education, Inc. Industrial Areas in Europe Figure 11-4

© 2011 Pearson Education, Inc. Industrial Areas in North America Figure 11-5

© 2011 Pearson Education, Inc. NAFTA Agreement made between Canada, US, Mexico- NO TARIFFS Maquiladoras : an area set up along Mexico / US border where factories and industry are set up. It has the benefits of lower wages, lower transportation costs because of closeness to US, lower environmental restrictions, and due to NAFTA no tariffs on goods Learn about this more later, for now.. What do you think the benefits of this are? (think economically)

© 2011 Pearson Education, Inc. KI #2 Why Do Industries Have Different Distributions?

© 2011 Pearson Education, Inc. Principles of location Raw materials Labor supply and cost Processing costs Markets Transport costs Government policies Human behavior

© 2011 Pearson Education, Inc. Location Theory Location Theory – predicting where a business will or should be located. Location of an industry is dependent on economic, political, cultural features as well as whim. Location Theory Considers: –Variable costs-energy, transportation costs & labor costs –Friction of distance- increasing distance =increased time & cost

© 2011 Pearson Education, Inc. Weber’s Model-The Least Cost Theory Alfred Weber, ( ) a German economists, published Theory of the Location of Industries in His theory was the industrial equivalent of the Von Thunen Model. Manufacturing plants will locate where costs are the least. Three Categories of Costs (JUST JOT DOWN CATEGORIES FOR NOW): Transportation-the most important cost-usually the best site is where cost to transport raw material and finished product is the lowest Labor-high labor costs reduce profit-location where there is a supply of cheap, non-union labor may offset transportation costs Agglomeration- (clustering of an industry) when a group of industries cluster for mutual benefit-shared services, facilities, etc.-costs can be lower Availability of ancillary (service) industries Infrastructure (fixed social capital) “Forward linkages” to markets

© 2011 Pearson Education, Inc. Weber’s Theory simplified: (We will be spending the day on this tomorrow) If the raw material is bulkier, the factory will be closer to them, if the finished product is bulkier then the factory will be closer to the markets. Examples: Coke (Coca Cola), cars, refrigerators

© 2011 Pearson Education, Inc. Agglomeration diseconomies Traffic, pollution, full waste dumps High rent and taxes Labor shortages and turmoil

© 2011 Pearson Education, Inc. Why Are Situation Factors Important? Proximity to inputs –Bulk-reducing industries –Examples: Copper Steel Figure 11-8

© 2011 Pearson Education, Inc. Proximity to markets –Bulk-gaining industries –Examples: Fabricated metals Beverage production –Single-market manufacturers –Perishable products Figure 11-10

© 2011 Pearson Education, Inc. Ship, rail, truck, or air? –The farther something is transported, the lower the cost per km/mile –Cost decreases at different rates for each of the four modes Truck = most often for short-distance travel Train = used to ship longer distances (1 day +) Ship = slow, but very low cost per km/mile Air = most expensive, but very fast Break of Bulk Point – location where transfer among transportation modes is possible Seaports and Airports Companies that use multiple transport modes locate at a break of bulk point

© 2011 Pearson Education, Inc. Why Are Site Factors Important? Labor –The most important site factor –Labor-intensive industries Examples: textiles –Textile and apparel spinning –Textile and apparel weaving –Textile and apparel assembly

© 2011 Pearson Education, Inc. Land –Rural sites –Environmental factors Capital Figure 11-20

© 2011 Pearson Education, Inc. KI #3 Where is Industry Expanding? Intraregional Shifts Factories in MDC’s have relocated from the center of cities to peripheral locations Interregional Shifts Factories have located from traditional clusters to regions not traditionally associated with manufacturing

© 2011 Pearson Education, Inc. Changing U.S. Manufacturing Figure 11-21

© 2011 Pearson Education, Inc. What does America still make? Automobiles (Ford, Gm, Chrysler- Detroit), foreign automakers assemble cars here Airplanes (Boeing, McDonnell Douglas, Seattle) Commercial and military Pharmaceuticals (drugs) Entertainment (Music Movies- Hollywood) Computer software (Silicon Valley) TECHNIPOLES Military weapons

© 2011 Pearson Education, Inc. Major Manufacturing Regions of North America

© 2011 Pearson Education, Inc.

Electronic Computer Industry Computers and computer parts manufacturing requires a highly- skilled labor force. It is concentrated in the Northeast, South and West Coast in areas where universities and research facilities are located.

© 2011 Pearson Education, Inc. Tuesday Pick-me-up Who was Alfred Weber? What are the 3 factors that determine location of manufacturing? What are bulk-gaining and bulk- reducing industries?

© 2011 Pearson Education, Inc. REVIEW: 3 major factors that determine location of manufacturing 1. Transportation (most important) –Raw materials (inputs) to factory –Finished goods (outputs) to market –Distance and weight most important factors. 2. Labor –High labor costs reduce profit –May locate farther from inputs/ market if cheap labor can make up for added transport costs. 3. Agglomeration –Similar businesses cluster in the same area. –Businesses support each other, reduce costs

© 2011 Pearson Education, Inc. Locational Tendencies Primary: oriented toward raw material sources Services: market oriented Secondary: complicated spatial expression, depending upon a set of factors –Raw material location –Markets –Agglomeration economies –Labor costs

© 2011 Pearson Education, Inc. Weber’s Theory of Location Assumptions (WILL HELP FOR PORTFOLIO): –Isotropic plain –One finished product with one market –Fixed location of raw materials and market site –Labor is fixed, but available in unlimited quantities at production site –Transportation is uniform and costs are a function of weight and distance

© 2011 Pearson Education, Inc. Weber’s Theory of Location Transport Costs: Single market and single source: –Pure material allows processing at market, source, or an intermediate location –Weight-losing material will be processed at the source to avoid transporting waste material

© 2011 Pearson Education, Inc. Raw material location REVIEW Weight losing operations are drawn to the raw material source. –Ex. Copper smelter, iron and steel, fruit and vegetable packing, meat packing, orange juice, wine A break of bulk point is where a good is moved from one mode of transportation to another- often an attractive location for production –At Great Lakes ports of Chicago, Gary, Detroit, Cleveland, and Toledo coal was brought by rail from Appalachia and iron was shipped by boat from N. Michigan and Minnesota for steel production

© 2011 Pearson Education, Inc. Weber’s Theory of Location Transport Costs: One market and two sources: –Equal distance and shipping costs dictates a market location –Two weight losing materials results in an intermediate location

© 2011 Pearson Education, Inc. Weber’s Theory of Location Labor Costs: Location chosen always has least combined costs A location may have higher transport costs, but less expensive labor…China?

© 2011 Pearson Education, Inc. Let’s Practice Please do not write on the green sheets. Copy in your journal and determine where Weber would place the factory.

© 2011 Pearson Education, Inc. Weber’s Theory of Location Agglomeration: Weber recognized that clustering will result in a per unit savings –Shared Benefits Facilities Labor force Infrastructure Services Raw materials

© 2011 Pearson Education, Inc. Weber’s Theory of Location Limitations of the Theory (USE FOR PORTFOLIO): There are geographic variations in market demand There are terminal costs Transport costs are becoming less of a factor Labor is mobile and does not exist in unlimited quantities Plants often produce a variety of outputs for many markets

© 2011 Pearson Education, Inc. Weber’s Theory of Location Additional Contemporary Considerations (USE FOR PORTFOLIO): Access to capital Access to technology Friendly regulatory environment Political stability Land cost Inertia

© 2011 Pearson Education, Inc. 1 st part of end of semester portfolio Choose an industry – why did you choose it? Make Weber’s triangle (need 2 raw materials, 1 market) Explain why you placed it there (bulk-reducing, bulk-gaining?) Then create another triangle: place it somewhere else based on a modern day consideration. Explain why you decided to put your factory there instead of where Weber would have suggested

© 2011 Pearson Education, Inc. ANOTHER REVIEW IF NEEDED….

© 2011 Pearson Education, Inc. Bulk-Reducing Industry

© 2011 Pearson Education, Inc. Bulk Gaining Industry “Market Orientation” Finished product weighs more than the inputs. Weight is gained during the production process. Cost of shipping outputs to market > cost of shipping inputs to factory. Therefore, factory is located near the market. Examples: Automobiles, beverages

© 2011 Pearson Education, Inc. Bulk Reducing Industry “Material Orientation” Inputs weight more that final product. Weight is lost during the production process Cost of shipping inputs to factory > cost of shipping outputs to market. Therefore, factory is located near raw materials/ inputs. Examples: copper, steel, lumber

© 2011 Pearson Education, Inc. Input Factory Market Heavier input, shorter distance to plant Lighter output, longer distance to market, lo Lighter input, longer distance to plant. Heavier output, shorter distance to market Bulk Reducing Bulk Gaining

© 2011 Pearson Education, Inc. Wednesday/Thursday Pick-me-up: Minute Mysteries

© 2011 Pearson Education, Inc. Murder Two bodies are lying in a puddle of water and there is broken glass all about. How did they die?

© 2011 Pearson Education, Inc. Snack Attack? Fifty people are in a cabin having a snack. Now they are all dead. What happened?

© 2011 Pearson Education, Inc. Robbed Ben tells an officer that his house was robbed the previous night. “What seems to be missing from your house?” the officer asks. “As far as I know, nothing.” Ben replies. How does Ben know he was robbed?

© 2011 Pearson Education, Inc. Clues Something was stolen. No evidence was left behind. Nothing was missing from house. Everything Ben owned was stolen. What kind of house did Ben live in?

© 2011 Pearson Education, Inc. TYPES OF INDUSTRY Directions: – You will be in groups of 3-4. Decide roles –You will have 45 minutes to work on your note placard. –You will have 2 minutes to present your group’s industry. –Remember: The rest of the class will be taking notes based on your explanation.

© 2011 Pearson Education, Inc. Jot down chart in Journal BASIC INDUSTRYCOTTAGE INDUSTRYFOOTLOOSE INDUSTRY Examples: Examples: Examples: NONBASIC INDUSTRYPRIMARY INDUSTRYSECONDARY INDUSTRY Examples: Examples: Examples: TYPES OF INDUSTRIES

© 2011 Pearson Education, Inc. Friday Pick-me-up Back 2 Board Game –Left Side of Room Vs. Right –Who wants to be the volunteer from each side? –Goal: sides will give clues to try to get them to guess what the image is behind them.

© 2011 Pearson Education, Inc. Round 1

© 2011 Pearson Education, Inc. Round 2

© 2011 Pearson Education, Inc. Round 3

© 2011 Pearson Education, Inc. Round 4

© 2011 Pearson Education, Inc. Round 5

© 2011 Pearson Education, Inc. Round 6: (starts HuG Words): Agriculture

© 2011 Pearson Education, Inc. Round 8 Industrial Revolution

© 2011 Pearson Education, Inc. Round 7 BASIC INDUSTRY

© 2011 Pearson Education, Inc. Round 9 TERTIARY SECTOR

© 2011 Pearson Education, Inc. Round 10: AGGLOMERATION

© 2011 Pearson Education, Inc. Friday: 5 min Quiz then Portfolio/Catch up Day Need to be completing draft of Food desert + sketch out Weber’s models to have approved.