1. Industrial and Economic Development
Unit 6

2. Industrial and Economic Development
Unit 6

3. Economic Classification
Production / Consumption / Distribution
Sectors
Primary
Secondary
Tertiary
Quaternary

4. Economic Sectors
Primary
Raw Materials
Secondary
Processing

5. Economic Activities Tertiary Quaternary Quinary
Moving / Selling / Trading
Services
Quaternary
Information
Intellectual Activities
Quinary
High Level Decision Making

6. Industrial and Economic Development
Unit 6

7. Industrial and Economic Development
Unit 6

8. Industrialization Industrialization Decline in primary activities
Manufacturing
Machines
Decline in primary activities
Move from rural to urban

9. !
Quiz Ferret!

10. Industry is a part of which economic sector?
Quiz Ferret!

11. Secondary!
Quiz Ferret!

12. Industrial Revolution
Machine Power
Fueled by engines
Steam
Coal and water
Textile Production

13. Industrial Revolution
Factories
Moving Water
Coal allows movement
Infrastructure
Trains / Rails
Canals
Transportation of goods

14. Assembly Line Production
Henry Ford
Assembly Line Production
Interchangeable parts
Mass Production
Division of Labor
Cheaper labor

15. New Industrial Concepts
International Division of Labor
Labor is divided geographically
This Core-Semi Periphery-Periphery
Each region provides a specific part of the labor process

16. New Industrial Concepts
Just in Time Production
Parts are made and delivered as they are needed
Products are made to order
Cuts down on storage and inventory
Cuts down production costs
Requires sophisticated communication and transportation infrastructure

17. Industrial and Economic Development
Unit 6

18. Industrial and Economic Development
Unit 6

19. Weber’s Least Cost Theory
Factory Location
Least Cost to the Factory / Company
Assumptions
Cost of Transportation
Weight
Distance
Maximize Profits
Minimize Cost

20. Weber’s Least Cost Theory
Assumptions
Markets are fixed (1 market)
Labor is fixed (fixed cost / fixed number)
Uniform Landscape
4 Main Factors
Transportation
Labor
Agglomeration
Deglomeration

21. Weber’s Least Cost Theory
Transportation and Distance
Weight and Distance
Types of Distance
To raw materials
Distance to energy
Perishable

22. Weber’s Least Cost Theory
Transportation and Distance
Weight Losing vs Weight Gaining
Heavier to lighter vs Lighter to Heavier
Weight Losing
Heavier to Lighter
Raw Material
Weight Gaining
Lighter to Heavier
Market

23. !
Quiz Ferret!

24. What are the two parts of transportation cost Weber considers in his theory?
Quiz Ferret!

25. Distance and weight!
Quiz Ferret!

26. Weber’s Least Cost Theory
Agglomeration
Several Industries come together
Can share cost of development
Can feed off of one another
High Tech Corridor
Silicon Valley
Movement of Skilled Labor
Backwash effect

27. Weber’s Least Cost Theory
Deglomeration
Too much competition
Not enough market share

28. Weber’s Least Cost Theory
Criticisms
Markets and Labor
Complications with transportation cost

29. Weber’s Least Cost Theory
Labor Cost
Wages and …….
Machines and Labor
Labor vs Transportation
Substitution Principle

30. Weber’s Least Cost Theory
Footloose industries
Light Weight / High Value
Transportation cost is non factor
Materials or final product
Labor cost is main factor
Computers / electronic devices

31. Interdependence Locational Interdependence Hotelling’s Model
Harold Hotelling
Location due to competitors
Share markets
Maximize profits

32. !
Quiz Ferret!

33. Which type of industry is most likely to locate close to raw materials?
Quiz Ferret!

34. Weight Losing!
Quiz Ferret!

35. Industrial and Economic Development
Unit 6

36. Industrial and Economic Development
Unit 6

37. Current Industrial Patterns
Develop faster / Richer?
Levels of Development
Development is defined as the process of improving the material condition of people through the growth and diffusion of technology and knowledge
Everywhere / some level of development

38. Current Industrial Patterns
Classification
MDC / LDC
Or Developed / Developing / Least Developed
Social / Demographic / Economic

39. HDI Human Development Index Compare Development 4 Areas
Life Expectancy (Demographic / Health)
Avg Education (Social)
Expected Years of Schooling(Social)
GNI Per Captia(Economic)

40. HDI Economic GNI Gross National Income
Domestic and foreign output claimed by a country’s residence
Income per person

41. HDI PPP GNI Drawbacks Purchasing Power Parity Relative Wealth
Not the whole picture
Informal Sector

42. HDI
Informal Sector
Meets Demand
Less Expensive

43. !
Quiz Ferret!

44. What is the purpose of the HDI?
Quiz Ferret!

45. To give us a quantifiable measure of development for comparison!
Quiz Ferret!

46. HDI Life Expectancy Shows Demographic Development Greater wealth
Greater access to health care
Greater education
Make educated decisions

47. HDI Average Education Social Development
Average time a person spends in school
Can vary by sex
Greater stability
More diversified economy
Greater wealth
Greater opportunities

48. HDI Expected Years of Schooling
The number of years you can expect to be in school
Social Development
Greater access to education
Provides greater opportunities
Educational
Economic
Political

49. Industrial and Economic Development
Unit 6

50. Industrial and Economic Development
Unit 6

51. Other Data
Raw Materials
Consumer Goods
TV’s and Radios
Women’s Rights

52. Big Mac Index Big Macs Thailand / 1.78 -> 8,440
PPP
Thailand / > 8,440
US / > 42,000

53. !
Quiz Ferret!

54. The Big Mac Index is used as another way to represent what economic concept?
Quiz Ferret!

55. PPP or Purchasing Power Parity!
Quiz Ferret!

56. Development Gap
MDC’s and LDC’s
MDC’s
Faster
Gap Widens
Examples:

57. Development Gap Regional Split Northern vs Southern Hemisphere
North-South Gap
Brandt Line
30 Degrees

58. Development Gap
Core-Periphery
World Systems Analysis

59. Development Gap Structuralists vs Liberals Structuralists
Global Economic Structure
Dependency Theory
Dependent on MDC’s

60. Development Gap Dependency Theory Wallerstein’s World System Analysis
Core Periphery and Semi Periphery
Core and Periphery
Colonization of Africa

61. Industrial and Economic Development
Unit 6

62. Industrial and Economic Development
Unit 6

63. Development Gap
Rostow’s Model
Similar Path of Development
5 Stages

64. Rostow’s Model Stage 1 Traditional Society Subsistence
Consumed by Producer
Gov’t Produced Resources

65. Rostow’s Model Stage 2 Before “Takeoff” Economic Activity Investments
Technology / Infrastructure
Surplus is traded
Productivity increases

66. Rostow’s Model Stage 3 Takeoff Rapid Growth
Industrialization increases
Agriculture decreases

67. Rostow’s Model Stage 4 Maturity Diffusion of Technology Industry
Large share of GDP
Skilled Labor increases

68. Rostow’s Model Stage 5 Mass Consumption Services Oriented
Higher Incomes
Consume Products

69. Critics of Rowstow America / Western Experience Dependency
Independent Agent
Not a player in the larger scheme

70. Industrial and Economic Development
Unit 6

71. Industrial and Economic Development
Unit 6

72. Reduce Development Gap
Self Sufficiency
Provide for its own
Evenly distribute investments
Reduce Poverty

73. Reduce Development Gap
Closed Economic State
Protectionistic
Limited imports
High Tariff
Used in China, India, Africa
Corruption / Inefficiency

74. Reduce Development Gap
International Trade
Trade with Foreign Nations / Companies
Identify success
Invest
Compete
Comparative Advantage
Create comparable products / cheaper
Open trade and markets create wealth

75. !
Quiz Ferret!

76. What stage of Rostow’s Model would Semi-periphery countries be in?
Quiz Ferret!

77. Stage 3 or Stage 4!
Quiz Ferret!

78. Economic Globalization
Global Interconnectedness of business
Starbucks, McDonalds, MTV
Multinational / Transnational Corporations
HQ / Production
Conglomerate
Large company owns smaller
Coke and bottling companies

79. Economic Globalization
Outsourcing
Production facilities
Many reasons
Taxes, wages, land, environment

80. New Industrial Countries
Asian Tigers
Tech boom
Taiwan, Hong Kong, South Korea, Singapore
Asian Tigers, Japan, China
Pacific Rim Economic Region

81. Foreign Direct Investment
LDC
Investment from foreign company
Special Economic Zones
Taxes, Regulations
Export Processing Zones
Labor Restrictions, Taxes
Free Trade Zones
Duties / Tariffs

82. Maquiladoras Maquiladoras Zone Maquiladora Northern Boarder
Free Export
Created by Mexican Government
Provide Jobs
Problems

83. International Division of Labor
Global Scale
World Wide Production
Assembled Elsewhere
Automobiles
Cheap Transportation

84. Industrial and Economic Development
Unit 6

85. Industrial and Economic Development
Unit 6

86. Free / Fair Trade Foreign Direct Investment
Investment by Foreign companies
Good
Companies are investing in foreign countries and people
Bad
Companies are exploiting foreign countries, people, and their resources

87. Free / Fair Trade Free Trade Fair Trade Outsourcing Work
Few Regulations
Few Trade barriers
Fair Trade
Outsource Work
Some regulation
Some trade barriers

88. !
Quiz Ferret!

89. Which type of trade policy tends to result in the outsourcing of labor?
Quiz Ferret!

90. Free Trade!
Quiz Ferret!

91. Industrial and Economic Development
Unit 6

92. Industrial and Economic Development
Unit 6

93. IMF / World Bank Improve economic statuses Loans at Low Rates
Provide funds for development
Loans at Low Rates
Stipulations
Economic Improvements
Move toward Privatization
Private instead of Public
Greater efficiency

94. IMF / World Bank Criticisms Mechanism of MDCs to control LDCs
To fit the MDC worldview and global economy

95. Trade Agreements / Trade Blocs
Arrange Free Trade between member nations
Preferred nation status
Have been seen as tools of MDCs
Some developing countries creating their own
OPEC
BRICS

96. Non Government Organizations NGO
Non profit
Help LDC’s
Doctors w/out Boarders
Save the Children
Social / Human Rights Issues

97. Industrial and Economic Development
Unit 6

98. Industrial and Economic Development
Unit 6

99. Environment Sustainable Development Smart Growth
Human Consumption / Earth’s resources
Urban Growth Boundaries
Cap and Trade
Green Economy

100. Environment UN Commission on Sustainable Development
“We commit ourselves to building a humane, equitable and caring global society, cognizant of the need for human dignity for all.”
UN Division of Sustainable Growth, 2002

101. Environment Earth’s sustainability
Impact due to increased access / travel
Eco Tourism
Environmentally Friendly Travel / Vacations

102. Environment Eco-Tourism 2 Benefits Provides Economic Benefits
Active preservation of the environment

103. !
Quiz Ferret!

104. In which countries is the idea of Sustainable Development a greater focus?
Quiz Ferret!

105. Developing / Less Developed Countries!
Quiz Ferret!

106. Environment Global Warming / Climate Change Greenhouse Gases
Trapped Heat = Warmer Temps