1. Industrialization

2. Defining Industrialization
Definition
The growth of manufacturing activity in an economy or a region
Usually industrialization is accompanied by a decrease in the # of subsistence farmers in a country or region as they leave the agricultural sector in favor of manufacturing jobs

3. Major Economic Classifications
The economy is the system of production, consumption, and distribution in a region
Classifications
Primary sector
Part of the economy in which activities revolve around getting raw materials from the earth
Ex: Fishing, Farming
Secondary sector
Economic activities that deal with processing the raw materials into a finished product of greater value
Ex: Factories, Manufacturing
Tertiary Sector
Economic activities or services that move, sell, and trade the products made in the 1st two sectors
Ex: bank tellers, carpet salesman
Quaternary Sector
Economic activity that involves information creation and transfer
Ex: University researcher
Quinary Sector
Economic activities that involve the highest level of decision making
Ex: Legislatures, CEOs

4. Diffusion of Industrialization
Prior to the Industrial Revolution
People made household tools and agricultural equipment in their own home or obtained them in a local valley
Called cottage industries
Definition of Industrial Revolution
A series of improvements in industrial technology that transformed the process of manufacturing goods
History of the Industrial Revolution
Began in England in the 1760s
Period of rapid socio-economic change
Characteristics
Machines replaced human labor
Root of IR was technology
Several inventions that transformed the way goods were manufactured
Result in unprecedented expansion in productivity
Industries impacted
Iron, Coal, Transportation, Textiles, Chemicals, Food Processing
New sources of energy found
Coal leading source
Major cities rose up near coal fields
Beginnings of assembly- line production
Small-scale, mechanized factories
Transportation improved
Farming became mechanized
Results
Higher standards of living, stage 2 DTM

5. Diffusion of Industrialization
Commodification of labor
One result industrialization
Factory owners began looking at their human labor as commodities (objects for trade) with price tags per hour, rather than seeing workers as people
Spread of the Revolution
By 1825, the technology of industrialization had spread to North America and Western European countries
Thrived in areas with rich coal deposits
By the 1920s the production process in the U.S. automobile factories had broken down into differentiated tasks to complete the product
Process known as the Ford (Fordist) production method
Built factories “out” rather than “up” so they factories were only one story and the product could be transported through the assembly line with no problems
Based on division of labor
where different parts of the assembly process were divided up among different workers and areas of the factory

6. Diffusion of Industrialization

7. Industrial Regions Concentrated in three regions United States Europe
Europe, North America, East Asia
Outside the region include Brazil and India
Europe
UK – used to be steel/ coal, now high-tech
Rhine-Ruhr Valley- Iron/Steel
Mid-Rhine- 2nd most imp. Industrial area
Po Basin- oldest, most imp. Industrial area
NE Spain- fastest growing, textile, autos
Moscow- fabrics, and product w/ skilled labor
St. Petersburg- shipbuilding, Navy industries
Volga- petroleum and natural gas
Urals- more than 1,000 minerals
Kuznetsk- Russia’s most imp. manufacturing
Donestk- iron/steel (largest in E. Europe)
Silesia- Poland and Czech Rep, steel
United States
New England- oldest in U.S., textiles
Middle Atlantic- Largest U.S. market
Mohawk Valley- steel, food process
Pitts- Lake Erie- steel 19th century
Western Great Lakes- transpo, steel
Southern Cal- 1940s- aircraft
SE Ontario- Canada’s most imp., steel
East Asia
Japan
Industrial power in 1950s, 1960s
Became world leader in autos, ships, cameras, stereos, TVs
China
World’s largest supply of low-cost labor, largest consumer market.

9. Explaining and Predicting Where Industries locate
Alfred Weber’s Least Cost Theory of Industrial Location
Set out to predict where factories would choose to locate and grow
Similar to Von Thunen, studied the locations of industrial activities and set up a hypothetical state with several assumptions
Called the Least Cost Theory because it predicted where industries would locate based on the places that would be the lowest cost to them
Industries wanting to locate where transportation costs are minimized must consider two issues:
The distance of transportation to market
Weight of goods being transported

10. Weber’s Model Assumptions
Transportation cost determined by the weight of the goods being shipped and the distance they are being shipped
The heavier the good and/or the farther the distance = the most expensive to ship
Industries are competitive and aim to minimize their costs and maximize their profits
Markets are in fixed locations
Labor exists only in certain places and is not mobile
Physical geography and political-cultural landscape are assumed to be uniform across the model’s space
With these assumptions, the location of industry is driven by four factors
Transportation
Labor
Agglomeration
Deglomeration
Critics
Theory does not identify the fact that markets and labor are often mobile and that the labor force varies in age, skill sets, gender, language, etc.
Some transportation costs are not directly proportional to distance

11. Concepts related to Weber’s Model
Weight-Gaining versus Weight-Losing Industries
Early factories also had to consider their proximity to the raw materials they needed
These early factors had spatially-variable costs
costs that changed depending on the factory’s location
A factory using heavy or perishable raw materials in its production might be built as close as possible to its source of raw materials to minimize the cost of transporting the materials into the factory
Weight-losing processes
Manufacturing processes that take the raw materials and convert them into a product that is lighter than the raw materials that went into making it
Also called “material orientation” or “bulk-reducing”
Ex: paper production, copper, steel
Weight-gaining processes
Take raw materials and create a heavier final product
When weight-gaining industries locate near the place where the heavier product will be sold called “market oreintation” or “bulk-gaining”
Ex: Beverage bottling industry, fabricated metals

12. U.S. Steel Industry
Two principal inputs (resources) of steel are iron ore and coal
Steel-making is an example of bulk-reducing industry
Needs to be located next inputs to minimize transportation costs
Map of “Rust belt”
Centers of Steel Production
Mid-19th century
Concentrated near Pittsburgh, P.A.
Today center for research
Late 19th century
Built around Lake Erie and OH cities
Influenced by new discovery of iron ore in Mesabi Range in Minn.
Early 20th century
Located near Lake Michagan
Closer to Mesabi range
Mid-20th century
Closter to ocean on both coasts
Reflective of Iron ore from other countries
Today
Most in U.S. are closed

13. Concepts related to Weber’s Model
Footloose Industries
Are not restricted in where they can locate because of transportation costs
Some maintain the same cost of transportation and production regardless of where they choose to locate
They industries have spatially fixed costs
costs that remain in same no matter where they choose to locate
Often produce lightweight products of extremely high value
Computer chips

14. Transportation Inputs and products transported one of four ways
Trucks
Short-distance delivery
Loaded/unloaded quickly
Advantage if driver can reach location in one day
Trains
Often used to ship to destinations that take longer than one day
Take longer to load
Air
Most expensive
Reserved for speedy delievry of small-bulk, high-value packages
Ships
Attractive for very long distances
Slower than land-based transpo
Used for international
The farther something is transported the cheaper the cost
Lots of companies mix the modes of delivery
Thanks for containerization
Regardless of mode, cost increases each time you change modes of transporation
Many companies that use multiple transport mode locate at break-of-bulk points
Location where transfer among modes is possible
Often seaports, airports

15. Concepts related to Weber’s Model
Labor costs and the Substitution principle
The Weber model assumes that the cost of labor is a key factor influencing where industries choose to locate
Included in labor considerations is the availability of industrial capital
Consists of machinery and the money to purchase the tools and workers the factory needs
The substitution principle applies when an industry will move to a place to access lower labor costs, even though transportation costs might increase as a result
In the long run, these companies will save more because of the cheaper labor

16. Labor-Intensive Industries
Definition
One in which the wages and other compensation paid to employees constitute a high percentage of expenses
Labor constitutes an average of 11% of overall manufacturing costs in the U.S.
Labor-intensive industries in the U.S. would have a higher percentage
Average wage paid exceeds $20 an hour in MDCs with benefits
LDCs less than $5 an hour with limited to no benefits
Different that high-wage industry
Labor-intensive measured in percentages
High-wage measured in currency
Examples
Textile and apparel industry
Spinning of fibers and prep work
Weaving or knitting of yarn into fabric
Cutting and sewing of fabric for assembling clothing and other products

17. Concepts related to Weber’s Model
Agglomeration
Occurs when industries clump together in the same geographic space
Alfred Marshall first identified the benefits of agglomeration in industrializing England in the late 19th century
Factories that are in the same area can share costs associated with resources such as electrical lines, roads, pollution control, etc.
Agglomeration economies occur when the positive effects of agglomeration result in lower prices for consumers
Categories of agglomeration economies
Localization economies occur when many firms in the same industry benefit from clustering close together
Urbanization economies occur when large populations in urban areas benefit from clustering together because they get to share infrastructural elements
Ex: power lines and transport system

18. Concepts related to Weber’s Model
High-Tech Corridor and Technopoles
A high-tech corridor is a place where technology and computer industries agglomerate
A technopole is another name for a region of high-tech agglomeration, formed by similar high-tech industries seeking to locate in a shared area so that they can benefit from shared resources
Like sharing a highly-trained workforce, and utilizing similar support businesses
Ex: computer repair shops, electrical wiring services

19. Concept’s related to Weber’s Model
Backwash Effects
Negative consequences of agglomeration that can occur when other areas suffer out-migration (brain-drain) of talented people who are moving to a technopole or other “hot spot” of industry agglomeration
Locational Interdependence
The theory that industries choose their locations based on where their competitors are located
Industries want to maximize their dominance of the market, so they are influenced by the competition.
Ex: Gas stations
Multiple gas stations at highway exit because one would not be enough to service needs

20. Concepts related to Weber’s Theory
Deglomeration
“unclumping” of factories because of the negative effects and higher costs associated with industrial overcrowding
Often occurs when a agglomerated region becomes too clustered, too crowded
Or when such agglomeration negatively affects the industries such as pollution, traffic congestion, or strained resources and labor