Chapter 3 The Urban Landscape: MANUFACTURING

3.1 An Overview Definition of Manufacturing: -An activity in which materials are fabricated, assembled, processed or transformed into new products. -A secondary economic activity that takes raw materials (extracted by primary economic activity) to process and transform them into new products. -The output of one industry may be the input of another industry. Eg. A car factory assemble parts fabricated in other factories.

3.1 An Overview Manufacturing viewed as a system Inputs: Raw Materials Capital Technology Labour Land Power Transport Processes: Manufacturing Outputs: Finished Products Profits Income

3.1 An Overview Manufacturing increasingly uses technology rather than workers for many assembly and processing operations. It can be classified as industries. An industry is a group of economic activities that share common characteristics: 1)The raw materials used 2)The processing technology utilised 3)The product manufactured

Key Questions: a)What influences determine the location of industries? b)Are these influences changing? c)What shifts in the distribution of industries are the results of growth of new industries?

3.1.1 Development of Manufacturing Industries In the past, it was a handicraft activity. That means – use of hands, tools, simple machinery; skill-based; small-scale; low output. In the 18 th century, invention of water and then steam power led to the Industrial Revolution during which the factory system replaced the handicraft system.

3.1.1 Development of Manufacturing Industries The factory system uses large no. of machineries and organises work through division of labour. Division of Labour is a method which allows workers to specialise in specific tasks within a production process.

3.1.1 Development of Manufacturing Industries The factory system resulted in the industrialisation of economies. This means that technology is used in the operations. Technology enables individual workers to produce more compared with the handicraft system and hence, their productivity (output per unit of input) is higher.

3.1.2 General Location of Industries Initially, water power – found near rivers Then, steam engines – near coalfields (burning coal produces power; also coalfield cities were main markets and large source of labour) Recently, development of electricity and oil – more choices of location Also, motor transport and expressways – Industries no longer have to be near a rail or port for easy transportation. With road and air transport, many industries moved away from cities

Changes in Manufacturing #1 Growth of Multinational Corporations MNCs are large business organisations that own operations outside their home country Tendency for smaller no. of MNCs to produce larger share of output and control market (See TB pg. 68) MNCs gain cost savings by producing in high volumes (See eg. of fishballs!)

The Fishball…. Small shop using manual labour -$5 per hr for worker -Produces 1000 fishballs and sold for $200 -Cost of each fishball is $0.025 Franchise using machinery -$10,000 for 5-year usage = $5 per day = $0.68 per hour -Produces 1 million fishballs and sold for $200, 000 -Cost of each fishball is $

Changes in Manufacturing MNCs – Spatial division of labour (allocation of separate tasks and operations to different locations) See TB, Pg. 69 Eg. Regional head office in Singapore (good infrastructure for accessibility), branch assembly plants in Indonesia (cheaper labour costs), and R&D dept near university campus in the US (skilled scientists and technical staff).

Changes in Manufacturing MNCs – Area Specialisation In the past, places specialise in a particular industry eg. Shefffield in the UK town known for steel industry. Today, places often specialises in a particular stage of production eg. Singapore’s specialisation is to become a regional control and headquarters (HQ) centre.

Changes in Manufacturing #2. A shift to high-value, capital-intensive manufacturing Being capital-intensive means using more machinery (capital investment) to increase productivity and produce high-value goods Consequently, there is a drop in employment in the manufacturing industry since the 1960s (See Table 3.2 on TB pg 69)