1. Site KI 11.3

2. Site Factors are 1. Land 2. Labor 3. Capital  Labor  Most important site factor  Minimizing labor costs is most important  Worldwide ½ billion work in industry. China is ¼ India 1/5 work in manufacturing, MDC combine for 1/5  Labor Intensive Industries= wages and other employee compensation is the highest % of companies expense  Capital intensive Industries= much lower than average percentage of expenditures are on labor  Labor Intensive is not the same as high wage industry! Example: auto parts manufacturers are higher paid then textile workers. Paying textile workers account for the largest % of the cost of producing a towel or shirt…  You should know and understand the 3 principle steps in the Textile industry (pg. 356-360)

3. Land  Need to find land for constructing a factory, has natural and human resources  Contemporary move from cities to rural  Previously, cities offered attractive proximity to markets, convenience in shipping, large supply of labor  BUT lacked land… factories were inconvenient multi story. Had to hoist, build chutes and pulleys  Rural land is cheaper and abundant so it allows for one story buildings. Materials in one side and final products are shipped out the other end.  Not only space but convenient for delivery now that trucks are responsible for most delivering. Location to highway is more important now. Factories cluster in industrial parks near suburban highway junctions.

4. Land continued: Environmental Factors  Industries are attracted to different environmental factors  Climate, topography, low cost energy source  Prior to IR economic activities were located near rivers and forests bc they proved an important source of energy  When coal became the primary source of energy the location was shifted to the coal fields. Coal fields are less ubiquitous (common) then streams/forests so industry concentrated in fewer locations  Access to electricity is large concern for companies today. (read last two paragraphs on pg.360 prior to homework sheet)

5. Capital:  Companies locate where they will have access to $$$  Examples: US motor industry concentrated in Michigan bc this regions financial institutions were more willing than other banks to lend money  Example: Silicon Valley high tech industries cluster not because of skilled labor but bc banks in Silicon Valley are willing to provide $$ for software, communication and network ideas. ¼ of all capital in the US is spent on new industries in the Silicon Valley. The term was first used in 1971 and now this is the leading location in the world  Example: Before Silicon Valley was the North Carolina Research Triangle. 1950’s research triangle park started. High tech companies and enterprises. Duke University (and several other colleges) offered educated workforces for the research facilities. Majorly attracted businesses since 1950’s

7. “The Triangle” Agglomeration: Centralization of industry for mutal benefit of whole Like local shopping mall Yes competition but also help draw in more ppl raise customer base Creates competent workforce Other industries then drawn Production costs actually decrease b/c materials don’t have to shop as far Industrial Parks can provide tax breaks like Taiwan Shared services like lower taxes

8. 11.4 Why are locations factors changing?  Changing site factors have stimulated industrial growth in new regions internationally and w/n MDC’s  Labor is the site factor that is changing especially  The NE lost 6 million jobs in manufacturing between 1950 and 2009  Especially large declines in NY and Penn, once centers of clothing, textiles, steel and metal fabrications  Where did they go? South and West (CA and TX added ½ mill manufacturing jobs from 1950-2009 Shifts in the US

9. Why the shift?  South slow to recover from Civil War (lacked roads, rail, infrastructure )  Stimulated in the 1930’s by FDR’s New Deal (his plan to help the nation recover from the Depression)  One plan (Tennessee Valley Authority) brought electricity to the once rural south… later air conditioning made living and working in the South tolerable  #1 lure: right-to-work laws. Requires factory to maintain an “open shop” where employees have a choice of joining a union or not  This made it more difficult for Unions/employees to organize and demand more from companies  This kept pay down and brought many companies who wanted workers who would work from less then Northerners  Read and understand the Textile Production section on pg. 362-363

11. Mayor of Rust  Note take the numerous problems facing Braddock, Pa.  What would you classify as the most pressing problems facing Braddock, Pa and why?  Which revitalization efforts being employed in Braddock seems the most promising to you and why?  What concerns have some voiced about Mayor Fetterman’s approach to revitalization?

12. Videos  Levis Ad  https://www.youtube.com/watch?v=2YyvOGKu6ds https://www.youtube.com/watch?v=2YyvOGKu6ds  TED Talk

13. Shifts in Europe  From NW towards S and E  Unlike US their shifted bc of government policies  EU provides assistance to what “convergence regions and Competitive & Employment Regions”  Convergence Regions= E and S Europe where income is below average  C.E.R= W Europe’s traditional core which has suffered from substantial manufacturing job losses

14.  In 1970 nearly ½ industry in Europe and 1/3 in NA… fallen to ¼ each today  Todays key Industrial areas  East Asia: China, Japan, South Korea (container ships, steel, car parts)  South Asia: India (largest growing economy)Textiles and motor vehicle parts and business services  Latin America: nearest low wage region to the US. Brazil is the leading industrial country in LA. Industry clustered in SE around Sao Paulo and Rio de Janero  Shift big in steel and clothing: Labor intensive Other Shifts

15. Outsourcing  Transnational corporations aggressively look for low cost labor in LDCs  They selectively transfer parts of their operation to LDCs this is called new international division of labor  Allocating (handing out) parts of production is called outsourcing.  This is in contrast to vertical integration.  With outsourcing companies hand over the operation to companies who can make the parts cheaper and better  Video Clip