1. Factors o’ Industrial Spatial Outcomes

2. What is the goal of every business?
TO MAKE A PROFIT!!!!
Therefore, one must minimize their business’ costs and locate in the “least-cost location”.

3. Industries that use a great deal of power will concentrate around very cheap sources of power.
Industrial production in Europe is centered around coal and iron deposits because almost all industry was dependent on coal and steel in the beginning of the industrial revolution.
Power Supply

4. Labor Where labor is cheap, factories will go.
Where labor is plentiful, factories will go.
Where labor is skilled, factories will go.
Where labor is flexible, factories will go.
Labor

5. Transportation Cut back on your transportation costs!!!!!!!
Mode of Transport
Benefits
Drawbacks
Line Cost
Terminal Cost
Container Shipping
Highly efficient – water has little friction
Requires access to sea port with deep water – good over long distances
Rail roads
Also energy efficient
Dependent on access to Rail road – good over medium distances
Trucks
Easy access to everything via roads
Energy Inefficient
Cut back on your transportation costs!!!!!!!
Transportation

6. Transportation Cut back on your transportation costs!!!!!!!
Mode of Transport
Benefits
Drawbacks
Line Cost
Terminal Cost
Container Shipping
Highly efficient – water has little friction
Requires access to sea port with deep water – good over long distances
Low
High
Rail roads
Also energy efficient
Dependent on access to Rail road – good over medium distances
Medium
Trucks
Easy access to everything via roads
Energy Inefficient – good over short distances
Cut back on your transportation costs!!!!!!!
Transportation

9. All industrial production is based on raw materials, so some consideration of these is important in factory placement
Industries that work with heavy materials will naturally be more materially oriented
Industries whose products lose weight will naturally be more materially oriented.
Raw Materials

10. Market oriented industries are weight gaining at the point of production. Example: Water bottling.
Putting a factory close to market brings down……..
Market

11. Material vs. Market Orientation
There are two basic transportation costs in factory production:
Raw materials to factory
Factory to market
The goal of a business is to minimize those transportation costs.
Material vs. Market Orientation

12. Definition of Market orientation: The costs of transportation from factory to market are higher, so the factory is close to the market.
Definition of material orientation: The costs of transportation from material source to factory are higher, so the factory is close to the material source.

17. Market or Material? Soda Bottling Nickel Smelting Iron Casting
Tractors
Furniture
Market or Material?

18. Ubiquitous and Footloose Industries
Ubiquitous industries must be located everywhere because their products are highly perishable – they go bad within one day or less. These are the most market oriented industries.
Footloose industries make products that are super light and easy to ship, so they may be located anywhere on earth. These are the least market or material oriented industries. They have neither orientation.
EXAMPLES??
Ubiquitous and Footloose Industries

19. Having one industry all in one place, and especially around several groups of industries, has the following benefits: LIE
a. Available labor pool
b. Infrastructure
c. Easy access to supplies
When the costs of this exceed the benefits, this will lead to deglomeration. Example: tech in San Francisco vs. Austin.
Agglomeration

20. What industry is agglomerated in Houston? And why? (L,I,E)
What industry is agglomerated in Los Angeles?
What industry is agglomerated in North Carolina?
Agglomeration

21. Just in Time Production
Just in Time Production means you have a small inventory that you restock constantly.
If a business does this, they will need to be close to their suppliers, and suppliers will in turn need to be close to them.
Further cycle of agglomeration.
Just in Time Production

22. Comparative Advantage
Some countries produce things much more efficiently than others.
Outsourcing and offshoring (hiring someone in a foreign country) have greatly improved the standard of living for NICs.
Companies with Flexible production have taken advantage of global sources of labor.
Many liberals dislike these processes, claiming that they exploit workers and harm the environment.
Both liberals and conservatives dislike that jobs are going overseas.
Comparative Advantage

23. Imposed Considerations
When considering where to place a factory, one must consider local laws and policies.
Land use
Zoning
Environmental quality standards
Area development inducements
Taxes/Tariffs
Social considerations
Imposed Considerations

24. Theories – Weberian Analysis
Draw the triangle
Theories – Weberian Analysis

25. Theories – Hotelling Model
Draw the beach
Theories – Hotelling Model

26. Why is Encore Wire, a Copper Manufacturer, located in Mckinney?
Why did Toyota move to Plano?
Why are iphones assembled in China?
Why are car manufacturers selling to the U.S. market located in Mexico, the American Southeast, and the Rust Belt?
Closing Thoughts

27. Industrialized Areas of the Earth
Western Europe
NE US
Eastern Europe
East Asia
Industrialized Areas of the Earth

28. Is this industrial center market or materially oriented? Both? Why?
What factors have contributed to this region losing many industrial jobs in the last 100 years?

29. What factors have contributed to this region losing many industrial jobs in the last 40 years?

31. Eastern Europe!

32. What factors have caused most industry in China to be located in Eastern China?