Introduction to Geography

Introduction to Geography
Arthur Getis, Judith Getis, & Jerome D. Fellmann

Part III The Location Tradition
Chapter 10 – Economic Geography Chapter 11 – An Urban World Chapter 12 – Human Impact on the Environment

The Location Tradition
In Part III the analysis of location becomes the central concern rather than just one strand among many, and the locational tradition of geography is brought to the fore.

Economic Geography Chapter 10

Overview The Classification of Economic Activity and Economies
Primary Activities: Agriculture Other Primary Activities Trade in Primary Products Secondary Activities: Manufacturing Tertiary and Beyond Services in World Trade

Economic Geography The study of how people earn their living, how livelihood systems vary by area, and how economic activities are spatially interrelated and linked Livelihood patterns are influenced by Physical environment Cultural considerations Level of technological development Political decisions Economic factors of demand (market conditions)

Classification of Economic Activity and Economies: Categories of Activity
Primary activities Harvest or extract something from the earth Hunting and gathering, grazing, agriculture, fishing, forestry, mining Secondary activities Add value to materials by changing their form or combining them into more useful and more valuable commodities (form utility) Manufacturing and processing industries, power generation, construction industry

Tertiary activities Provide services to the primary and secondary sectors and goods and services to general community and individuals Professional, clerical, and personal services Wholesale and retail trade Quaternary activities Processing and dissemination of information and administration of enterprises Education, government, management, information processing, research

Quinary activities High-level decision-making jobs in all types of large organizations, public or private Transportation and communication services cut across all five activity levels

Classification of Economic Activity and Economies: Types of Economic Systems
National economies of the early 21st Century fall into three major types: Subsistence economies Goods and services are created for the use of the producers and their kinship groups Little exchange of goods Limited need for markets Market (commercial) economies Goods and services distributed in competitive markets where price and quantity are determined by supply and demand forces

Classification of Economic Activity and Economies: Types of Economic Systems
National economies of the early 21st Century fall into three major types (continued): Planned economies associated with communist-controlled societies Goods and services distributed through governmental agencies that control both supply and price Few people are members of only one system, although one system may be dominant Spatial patterns of economic systems are subject to change

Classification of Economic Activity and Economies: Stages of Development
Disparities in economic and social conditions exist across the world Development theory (1960s) Progression from subsistence agriculture, low technology levels, and poorly developed commercial exchanges through “takeoff” stages of increasing investment in infrastructure and human capital to industrial and, ultimately, postindustrial status Other theories and models have been proposed E.g., the “Big Push”

Classification of Economic Activity and Economies: Stages of Development
Assessments of stages of development Frequently criticized for Western Market economy biases Per capita income Allocation of labor force among the five categories of economic activity (primary, secondary, etc.) Relative contribution of agriculture, industry, and services to gross domestic product Importance of transportation to development

Primary Activities: Agriculture
Global food supplies are more than sufficient Problem = uneven distribution Number of undernourished people has climbed to over 1.0 billion 30 year trend of reduced global hunger was reversed by economic crisis that began in 2007

Hunting and gathering Universal forms of primary production before farming Now practiced by only a small number of people and declining in number

The growing of crops and tending of livestock Has replaced hunting and gathering as the most significant primary activity Employment in agriculture is steadily declining in developing countries In highly developed market economies direct employment in agriculture involves only a fraction of the labor force Agricultural continuum from subsistence to traditional (intermediate) to advanced (modern) farm economies

Primary Activities: Agriculture Subsistence Agriculture
Two chief types of subsistence agriculture: Extensive subsistence agriculture Large areas of land, minimal labor input per hectare Product per land unit and population densities are low Intensive subsistence agriculture Cultivation of small land holdings, great amounts of labor per acre Yields per unit area and population densities are both high

Primary Activities: Agriculture Extensive Subsistence Agriculture
Nomadic herding Wandering but controlled movement of livestock solely dependent on natural forage Most extensive type of land use system (requires greatest amount of land area per person sustained) Animals provide a variety of products for food, clothing, shelter and fuel Nomadic movement is tied to sparse and seasonal rainfall or cold temperatures as well as quality and quantity of forage

Nomadic herding (continued) Transhumance Seasonal movement to exploit locally varying pasture conditions On the decline

Shifting cultivation Warm wet tropical climates Plots are cleared and burned, then cultivated until fertility is lost, after which cropping shifts to a newly prepared site “Swidden,” “slash-and-burn” < 3% of world’s people engaged in this cultivation Highly efficient cultural adaptation where land is abundant in relation to population and levels of technology and capital availability are low

Primary Activities: Agriculture Intensive Subsistence Agriculture
Involves about 45% of world’s population Small-plot production of rice, wheat, maize, millet, or pulses Warm, moist districts of monsoon Asia Well-suited to rice production Cooler and drier portions of Asia Wheat, millet, upland rice

Primary Activities: Agriculture Intensive Subsistence Agriculture
Intensive use of fertilizers, mostly animal manure Promise of high yields in good years Polyculture is practiced for food security and dietary custom Urban agriculture is rapidly growing activity

Primary Activities: Agriculture Expanding Crop Production
Two paths to increased food production: Expand the land area under cultivation Increase crop yields from existing farmlands

Expand the land area under cultivation Most of the area well suited for farming is already under cultivation Millions of hectares annually being lost through soil erosion, salinization, desertification and conversion of farmland to urban, industrial and transportation uses

Increase crop yields from existing farmlands Key to growth of agricultural output in recent decades Two interrelated approaches: Production inputs have been increased Water, fertilizer, pesticides, herbicides, labor Green Revolution Complex of seed and management improvements adapted to the needs of intensive agriculture and designed to bring larger harvests from a given area of farmland E.g., genetic improvements

Green Revolution High-input, high-yield agriculture Costs for Green Revolution successes Commercial orientation and demands costly inputs Displacement of traditional and subsistence agriculture Loss of food security and nutritional diversity Salinization and groundwater depletion

Green Revolution (continued) Unequal spatial distribution of benefits Gains are falling off in many geographic areas Spread of genetically modified crops despite consumer resistance

Primary Activities: Agriculture Commercial Agriculture
Production controls Agriculture in developed economies characterized by specialization, off-farm sale, interdependence of producers and buyers Contractual arrangements Agribusiness Governmental involvements

Von Thünen’s model of agricultural location (continued) One of earliest models developed to analyze human activity patterns Developed in early 19th Century When transportation systems were less efficient Before governmental influences were the norm

Von Thünen’s model of agricultural location Land uses are a function of differing “rent” values that reflect cost of overcoming distance to a market town Land close to markets is used intensively in small units for high-value crops Land far from markets is used extensively in larger units for low-value crops

Intensification and consolidation of agriculture Reduction in number of farms Loss of “general farms” Enlargement in size of farms Exception – rise in number of small farms since 2002 Consumer desire for organic and local food

Intensive commercial agriculture Production of crops that give high yields and high market value per unit of land Truck farming (fruits and vegetables) Dairy farming Livestock-grain farming “Live-stock factory farms”

Extensive commercial agriculture Larger farm units on cheaper land, farther from market Large-scale wheat farming Livestock ranching

Special crops Special circumstances, most often climatic, make some places far from markets intensively developed agricultural areas Mediterranean agriculture Grapes, olives, oranges, figs, vegetables, etc. Plantation crops Large agricultural holding, frequently foreign-owned, devoted to the production of one or two export crops Typically in the tropics, along or near coasts for export

Agriculture in planned economies State and collective farms, agricultural communes In recent years, controls have been relaxed or abandoned in most economies; however, Traditional rural landscapes have been permanently altered Former Soviet Union China

Other Primary Activities
Gathering industries Fishing and forestry Extractive industries Mining and quarrying

Fishing About 80% of annual fish harvest consumed by humans, rest used for livestock feed or fertilizer Maximum sustainable yield exceeded in local waters Fish supply comes from: Inland catch Fish farming Marine catch

Fishing Commercial marine fishing Concentrated in northern waters Northeast Pacific Ocean Northwest Atlantic Ocean Overfishing “Open seas” Tragedy of the commons Pollution of coastal waters

Fishing Aquaculture (fish farming) Means of increasing fish supply Virtually all farmed fish are for human consumption Disadvantages: Pollution from fish wastes, chemicals and drugs Transference of disease to wild fish stocks Depletion of wild fish stock to feed farmed fish Genetic damage to wild fish stock Fastest growing sector of world food economy

Forestry See Chapter 5

Mining and quarrying Low-value minerals Transportation costs play a major role in production decision

Mining and quarrying Metallic minerals Production decision is a balance of quantity available, richness of the ore, distance to markets Land acquisition and royalty costs are also considered Even if all these conditions are favorable, production may not occur if market conditions are unfavorable (metals market is highly volatile) Production of low grade ore may be more profitable than high grade ore

Trade in Primary Products
Traditional export patterns Raw materials from less-developed countries Manufactured goods from more-developed countries Changing export patterns Raw materials have decreased and manufactured goods have increased in flows from developing states Export of unprocessed goods is still significant Volatility of commodity prices Trade inequalities United Nations Conference on Trade and Development World Trade Organization (Doha Round talks)

Secondary Activities: Manufacturing
Primary activities are locationally tied to natural resources Secondary and later stages of economic development are more closely related to cultural and economic than to physical circumstances.

Assumptions about human economic behavior People are economically rational Producers and sellers are intent on maximizing profit Supply, demand, market equilibrium guide decisions Although increasingly challenged, these assumptions still underlie current analyses of the spatial patterns of industry

Industrial locational models Variable costs as determinant in industrial location decisions Least cost theory (Weberian analysis) Minimize relative transport, labor, and agglomeration costs Raw material orientation or market orientation Substitution principle A number of potentially optimal locations Spatial margin of profitability

Secondary Activities: Manufacturing Industrial Location Models
Other locational considerations Have altered underlying assumptions of the classical theories Post-Fordist flexible manufacturing processes Application of information technology increasing flexibility of labor Declining transport costs

Transport characteristics Waterborne transportation is usually the cheapest mode Footloose industries Transportation costs are a negligible factor Ubiquitous industries Inseparable from markets and widely distributed Reduced costs and increased speed Commercial jets, superfreighters, containerization Weberian location theories are less applicable today

Agglomeration economies Geographic concentration of industrial activities is the norm at the local or regional scale External economies or agglomeration economies Savings to an individual firm that result from spatial association with other, similar economic activities Shared infrastructure Pools of labor, capital, ancillary business services Market built of other industries and urban populations Multiplier effect

Just-in-time (JIT) and flexible production JIT seeks to reduce inventories Reinforces spatial agglomeration tendencies Flexible production system allows producers to shift between different levels of output and from one process or product to another, made possible by: Reprogrammable computerized machine tools Computer-aided design Computer-aided manufacturing systems Flexible production requires significant acquisition of components and services from outside suppliers

Comparative advantage, outsourcing, and offshoring Comparative advantage Tells us that areas and countries can best improve their economies through specialization and trade Area or country concentrates on production of those items for which it has the greatest relative advantage or least relative disadvantage Outsourcing Producing parts or products abroad for domestic sale Also, subcontracting to domestic companies

Comparative advantage, outsourcing, and offshoring (continued) Offshoring Hiring foreign workers or Relocation of business processes and services to a lower-cost foreign location Cost-cutting strategy reflecting steep decline in communication costs, ease of Internet use and growing technical proficiency of foreign labor pools India – services offshoring China – production outsourcing

Comparative advantage, outsourcing, and offshoring (continued) New international division of labor Imposed considerations Other noneconomic forces also affect the locational decision process, e.g. environmental quality standards Especially in planned economies Inhibit transition to modern capitalist industrial techniques and flexibilities

Transnational Corporation (TNC) Private firm that has established branch operations in nations foreign to its headquarter’s country TNCs have become an increasingly significant driving force in global economy Foreign direct investment (FDI) Purchase or construction of foreign factories and other fixed assets; also merging with or purchasing foreign companies About ⅓ of FDI flows to developing countries

Transnational Corporation Actively exploit principle of comparative advantage Seize opportunities for outsourcing and offshoring Have become global entities because global communications make it possible Many have lost original national identities and are no longer closely associated with or controlled by cultures, societies and legal systems of nominal home country No longer identified with single products or processes

Secondary Activities: World Manufacturing Patterns and Trends
Major manufacturing regions Eastern Anglo America Western and Central Europe Eastern Europe Eastern Asia Account for about three-fifths of world’s manufacturing output by volume and value Newly Industrializing Countries (NICs) Contribution to world manufacturing activity has been growing significantly

Secondary Activities: Manufacturing High Tech Patterns
Classical location theories do not explain location of high-technology processing and production High-tech includes electronics, communications, computers, software, pharmaceuticals and biotechnology, aerospace, etc. However, advanced technology is increasingly a part of the structure and processes of all forms of industry.

Impact of high-tech industries on patterns of economic geography: Major factor in employment growth and manufacturing output in advanced and newly industrializing economies Have tended to become regionally concentrated in their countries of development Within such concentration, specialization is often the rule

Impact of high-tech industries on patterns of economic geography (continued): Locational tendencies Proximity to major universities or research centers and to a large pool of scientific and technical labor skills Avoidance of areas with strong unions Locally available venture capital Areas with favorable quality of life First-quality communication and transportation infrastructure

Impact of high-tech industries on patterns of economic geography (continued): Importance of agglomerating forces to location Some phases of production may be footloose Globalization through transfer and dispersion of high-tech activities

Tertiary and Beyond Services are a major and growing segment of domestic and international economic activity Postindustrial economies Dominance of service sectors, decline of manufacturing 86% of U.S. workers are in service sector (2009) Similar in other developed economies

Tertiary and Beyond Division of service sector into tertiary, quaternary and quinary categories Tertiary = lower-level activities related to day-to-day needs of people and to usual range of functions found in smaller towns and cities worldwide Quaternary and quinary = higher-level, more specialized information, research and management activities

Tertiary and Beyond Tertiary services
Retailers, personal and business services performed in shops and offices Place utility Location based on effective demand Part of the growth in the tertiary component is statistical rather than functional Outsourcing of services formerly provided in-house Tourism is the most important tertiary sector activity World’s largest industry in jobs and value generated

Tertiary and Beyond Available statistics do not always permit a clear distinction between tertiary service employment and more-specialized, higher-level quaternary and quinary activities

Tertiary and Beyond Quaternary activities
Services involving specialized knowledge, technical skills, communication ability or administrative competence Task carried on in office buildings, classrooms, hospitals and doctors’ offices, accounting and brokerage firms, etc. Basis for economic growth in the most highly developed economies Over half of all workers in rich economies are in the “knowledge sector” alone

Tertiary and Beyond Quaternary activities
“Externalization” of specialized services - production and consumption may be spatially separated However, still need for high-level personal contacts between client and service firm Result: spatial concentration of certain specialized services and regional deconcentration of others Deconcentration dependent on electronic digital processing and telecommunications transfer of data

Tertiary and Beyond Quinary activities
Special and highly paid skills of top business executives, government officials, research scientists, financial and legal consultants, etc. In major metropolitan centers, major universities and research parks, first-rank medical centers, high-level offices of political capitals

Services in World Trade
Service activities have become an increasing factor in international trade flows and economic interdependence Spurred by rapid advances in information technology and electronic data transmission Increased integration of developing countries into world economy at tertiary level and beyond Foreign direct investments in the services sector Despite increasing share of global services trade held by developing countries, world trade in services is dominated by a very few

Services in World Trade
A relatively few world cities have emerged as international business and financial centers E.g., New York, London Off-shore banking havens have also emerged

Introduction to Geography

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