1. INDUSTRY

2. INDUSTRIALIZATION:
The growth of manufacturing activity in an economy or a region
Characterized by a decreasing number of subsistence farmers as they leave the agriculture sector for manufacturing jobs

3. Major Economic Classifications
Tertiary Sector (ex: bank tellers, carpet salesman)
- Activities or service that move, sell, and trade the products made in the second sector
Primary Sector (ex: fishing, farming)
- Activities that revolve around extracting raw materials from the earth
Quaternary Sector (ex: university researcher)
- Activities that involve information creation and transfer
Secondary Sector (ex: factory worker, manufacturing)
- Activities that deal with processing the raw materials into a finished product
Quinary Sector (ex: legislatures, CEOs)
- Activities that involve the highest level of decision making

4. Diffusion of Industrialization 5 Characteristics of Industrialization
Cottage industries, before the Industrial Revolution, were where people made tools and equipment in their own home
Machines replaced human labor
INDUSTRIAL REVOLUTION:
A series of improvements in industrial technology that transformed the process of manufacturing goods
New source of energy found
Beginnings of assembly-line production
The Industrial Revolution began in England in the 1760’s as a period of rapid socio-economic change and mass exploitation of workers
Transportation improved
Farming became mechanized

5. Industrial Regions United States:
New England – oldest in U.S., textiles
Middle Atlantic – Largest U.S. market
Mohawk Valley – steel and food processing
Pitts- Lake Erie – steel 19th century
Western Great Lakes – transportation and steel
Southern Cal s – aircraft
SE Ontario – Canada’s most imp., steel
Europe:
UK – used to be steel and coal, now high-tech
Moscow – fabrics, and product with skilled labor
St. Petersburg – shipbuilding, Navy industries
East Asia:
Japan (1950s and 60s) – automobiles, ships, cameras, stereos, TVs
China – low cost labor, largest consumer market

6. Weber’s Least Cost Theory of Industrial Location
Predicts where factories would choose to locate based on the places that would be the lowest cost to them
Considers two issues:
Distance of transportation to market
Weight of goods being transported

7. Weber’s Model Assumptions
Markets are in fixed locations
Industries are competitive and aim to minimize their costs and maximize their profits
Transportation cost is solely determined by the weight of the goods being shipped and the distance they are being shipped
Physical geography and political/cultural landscapes are assumed to be uniform across the model’s space
Labor exists only in certain places and is not mobile

8. Weber’s Model Assumptions
The theory does not identify the fact that markets and labor are often mobile and that the labor force varies in age, skill sets, gender, etc.
Some transportation costs are not in fact directly proportional to distance
With the assumptions, location of industry is driven by four factors:
Transportation
Labor
Agglomeration
(spatial clumping in industry)
Deglomeration
(spatial “unclumping” in industry)
Weber’s Model Critics

9. Bulk-Gaining Industries Bulk-Reducing Industries
Manufacturing processes that that take the raw materials and create a heavier final product
Typically locate near the market.
“bulk-gaining”
Ex: beverage bottling, fabricated metals
Manufacturing processes that take the raw materials and convert them into a lighter final product
Typically located closer to raw materials
“bulk-reducing”
Ex: paper production, copper, steel

10. US Steel Industry Principal inputs: Iron ore and coal
“Rust belt” (Pennsylvania, Ohio, Michigan, etc.)
Centers of Steel Production:
Mid 19th century: Pittsburgh, PA
Late 19th century: Lake Erie and Ohio cities
Early 20th century: Lake Michigan
Mid 20th century: closer to oceans on both coasts
Bulk-reducing industry
Footloose Industries have spatially fixed costs and are not affected by transportation costs
Often produce lightweight products of high value, ex: computer chips

11. Transportation
The farther something is transported, the cheaper the cost
Trucks (short distances, load/unload quickly)
Trains (ship to destinations, longer to load and travel)
Air (most expensive, speedy delivery of small-bulk, high-value items)
Ships (long distances, international, slower than land
Break-of-bulk point:
Location where transfer among modes of transportation is possible, where two or more transportation modes meet
Ex: seaports and airports

12. Substitution Principle
It also includes the availability of industrial capital: machinery and the money to purchase the tools and workers the factory needs
Substitution principle is applied when an industry moves to access lower labor costs, even though transportation costs might increase as a result
In the long run, theses companies will save more because of the cheaper labor
Weber’s model assumes that the cost of labor is a key factor that influences where industries choose to locate
Labor Intensive Industries
One in which the wages and other compensation paid to employees constitute a high percentage of expenses
Ex: textile and apparel industry

13. Agglomeration Deglomeration
Occurs when industries clump together in the same geographic space
“Unclumping” of factories because of negative effects and higher costs associated with industrial overcrowding
Factories can then share costs associated with resources such as electrical lines, roads, pollution control, etc.
When agglomeration negatively affects the industries in ways such as pollution, traffic congestion, or overused resources and labor
Backwash effects are negative consequences of agglomeration that can occur when areas suffer brain-drain of talented people who are moving to a technopole or other center of industrial agglomeration

14. Future of Industry
International shifts in industry to Brazil, China, and India
BRIC = Brazil, Russia, India, China
Outsourcing has effected the distribution of manufacturing
Industry is shifting away from traditional areas of northeastern US
Maquiladoras: foreign owned factories located in Mexico
Located close to the US border and major cities
Located in Mexico because of cheap labor, NAFTA, Mexico’s proximity to the US market, and improved transportation
2 million jobs added to the “sun belt” between 1950 and 2009
South has lower wages and little interest in joining unions

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