1. Industry and Services
Chapter 12

2. Where did the Industrial Revolution begin, and How did it Diffuse?
Key Question:
Where did the Industrial Revolution begin, and How did it Diffuse?

3. Industrial Revolution:
a series of inventions that brought new uses to known energy sources, new machines to improve efficiencies and enable other new inventions.
eg. steam engine
iron smelting
water pump

4. Beginning of Industrial Revolution
When and where did the industrial revolution begin?
In Great Britain in the mid to late 1700s
Why Great Britain?
Flow of capital
Second agricultural revolution
Mercantilism and cottage industries
Resources: coal, iron ore, and water power

5. The Industrial Revolution
European domestic markets were growing, and a labor force was lacking in England
The steam-driven engine made up for the lack of available labor

6. Flow of Capital into Europe, 1775
Needed flow of capital in order to fuel the industrial revolution.

7. The Industrial Revolution
Freed from charcoal use, iron smelters could be concentrated near British coal fields
Transportation and communications were affected

8. Textiles Production:
Liverpool and Manchester
Iron Production:
Birmingham
Coal Mining:
Newcastle

9. The Industrial Revolution
The first steam-powered ocean-going vessel emerged
England held a monopoly over products in world demand and the skills to make machines to manufacture them

10. Ironbridge, England World’s first bridge made entirely of cast iron,
constructed in late 1700s.

11. Iron Ore to Steel

12. Diffusion to Mainland Europe
In early 1800s, innovations diffused into mainland Europe.
Location criteria: proximity to coal fields
connection via water to a port
flow of capital
Later Diffusion
In late 1800s, innovations diffused to some regions without coal.
Location criteria: access to railroad

13. Diffusion of Industrial Revolution

14. Examine the map of diffusion of the Industrial Revolution into Europe and determine what other characteristics (aside from presence of coal) were necessary for industrialization to take hold in these regions.

15. How do Location Theories explain Industrial Location?
Key Question:
How do Location Theories explain Industrial Location?

16. The Paris Basin is the Industrial base of France
The Paris Basin is the Industrial base of France. Rouen (pictured here) is at the head of navigation point on the Seine River.

17. Location Theory
Location Theory – predicting where business will or should be located.
Considers:
Variable costs
Profit maximization
Friction of distance
Transportation

18. Factors of Industrial Location
Raw Materials
Very few industries use raw materials
Most manufacturing is based on the further processing and shaping of materials already treated in
some fashion
Transportation costs affect
industry location

19. Power Supply (Energy)
Power supplies that are immobile or of low transferability may attract activities dependent on them
Current technology made less important
Industries requiring large amounts of energy still situated near the power source

20. Labor
Spatial variable affecting location decisions and industrial development
3 major traditional considerations
price, skill, and amount
Labor Flexibility: highly
educated workers able
to apply themselves to a
wide variety of tasks
and functions

21. Market Goods are produced to supply a market demand
Size, nature, and distribution or markets is important in industrial location decisions
Ubiquitous industries

22. Transportation Unifying thread of all factors of industrial location
Modern industry is immediately tied to transportation
Use many different form of transportation media

23. Alfred Weber
Created the classical model of industrial location theory in 1909
Least-Cost Theory
Explains the optimum location of a manufacturing establishment in terms of minimizing three basic expenses
Transportation cost, labor, agglomeration

24. Least Cost Theory
Transportation: the site chosen must entail the lowest possible cost of
A) moving raw materials to the factory
B) finished products to the market. This, according to Weber, is the most important.

25. Least Cost Theory
2) Labor: higher labor costs reduce profits, so a factory might do better farther from raw materials and markets if cheap labor is available
-ex: China – today

26. Least Cost Theory
3) Agglomeration: when a large number of enterprises cluster in the same area, they can provide assistance to each other through shared talents, services, and facilities
-ex: manufacturing
plants need office
furniture

27. 5 Controlling Assumptions
Area is uniform physically, culturally, and technologically
Manufacturing involves a single product to be shipped to a single market whose location is known
3. Inputs involve raw materials from more than one known source location

28. 5 Controlling Assumptions
Labor is infinitely available but immobile in location
Transportation routes connect origin and destination by the shortest path and directly reflect the weight of the items shipped and distance moved

29. Other Location Models Hotelling’s Model
Location of an industry cannot be understood without reference to other industries of the same kind.
Theory:
Locational interdependence:
indicates that locational decisions
are not made independently but
are influenced by the actions of others.

30. Other Location Models Losch’s Model
Manufacturing plants choose locations where they can maximize profit.
Theory:
Zone of Profitability

31. Major Industrial Regions of the World before 1950

32. Industrialization Through WWI
The four primary industrial regions:
Western & Central Europe
2) Eastern North America
3) Russia & Ukraine
4) Eastern Asia

33. Western and Central Europe
Late 18th Century:
Britain
France
Belgium
Netherlands
Germany: 3 districts?
Early 20th Century:
Italy: What area?
Spain: What area?
Sweden
Finland

34. Major Manufacturing Regions of North America
-Benefitted from overseas resources
-Large coal and gas reserves to provide energy to manufacturing plants
-US capitalized on industry after Western Europe destruction during WWI and WWII

35. Major Manufacturing Regions of Russia
-Many resources throughout the vast expanse of land
-Volga River provided an energy resource and transportation through canals -

36. Major Manufacturing Regions of East Asia
-Japan imported raw materials from it’s colonial empire into Korea, Taiwan, and China
-3 major belts in Japan?

37. Think of an industrial area where you live, either an industrial park or a major conglomeration of industries. Consider the models of industrial location described in this section of the chapter and determine whether any of the models apply to this place.

38. How has Industrial Production Changed?
Key Question:
How has Industrial Production Changed?

39. Post-Fordist
Fordist – dominant mode of mass production during the twentieth century, production of consumer goods at a single site.
Post-Fordist – current mode of production with a more flexible set of production practices in which goods are not mass produced. Production is accelerated and dispersed around the globe by multinational companies that shift production, outsourcing it around the world.

40. Time-Space Compression
Through improvements in transportation and communications technologies, many places in the world are more connected than ever before.

41. Time-Space Compression
Just-in-time delivery
rather than keeping a large inventory of components or products, companies keep just what they need for short-term production and new parts are shipped quickly when needed.
Global division of labor
corporations can draw from labor around the globe for different components of production.

42. Production of Televisions
Three key elements in television production:
Research and design
Manufacturing components
Assembly
Production of televisions has shifted across the world over time.

43. New Influences on the Geography of Manufacturing
Transportation on industrial location
Development of infrastructure: containers, refrigeration
Intermodal connections
Regional and global trade agreements
NAFTA, EU
WTO: ~150 countries, promotes free trade to eliminate quotas
Proximity to Energy sources in industrial location less important
Pipelines and tankers deliver fuel to far away places
2.5 million miles of pipelines in NA

45. Where are the Major Industrial Belts in the World Today and Why?
Key Question:
Where are the Major Industrial Belts in the World Today and Why?

46. Deindustrialization –
a process by which companies move industrial jobs to other regions with cheaper labor, leaving the newly deindustrialized region to switch to a service economy and work through a period of high unemployment.
The former Gautier rolling mills of Bethlehem Steel Corp. in Johnstown, PA
Abandoned street in Liverpool, England, where the population has decreased by one-third since deindustrialization

47. Newly Industrialized East Asia South East Asia
Also known as the Pacific Rim.

48. Newly Industrialized China – major industrial growth after 1950
1. Industrialization in the 1960s was state-planned:
-Northeast district
-Shanghai and Chang district
2. Today, industrialization is spurred by companies that move production (not the whole company) to
-take advantage of Chinese labor
-special economic zones (SEZs).
ex: Shenzhen

49. As China’s economy continues to grow, old neighborhoods (right) are destroyed to make room for new buildings (below).
Beijing, China

50. Newly Industrialized East and Southeast Asia 1. Four Tigers
South Korea
Hong Kong
Tiawan
Singapore
A map showing the Four Asian Tigers     Hong Kong     South Korea     Singapore     Taiwan

51. What is the Service Economy, and Where are Services Concentrated?
Key Question:
What is the Service Economy, and Where are Services Concentrated?

52. Service Economy Service Industry – Tertiary
1. Economic activity associated with the provision of services
– such as transportation, banking, retailing, education, and routine office-based jobs.
2. As services become more developed specific divisions are used:
ex: Quaternary – exchange of information…ex?
Quinary – complex decision making…ex?

53. Service Economy Postindustrial:
a society in which an economic transition has occurred from a manufacturing based economy to a service based economy
Examples:
United States, Canada, Japan, and Western Europe

54. Geographical Dimensions of the Service Economy
New Influences on Location:
- Information technologies
- Less tied to energy sources
- Market accessibility is more relevant for some
and less relevant for others because of
telecommunications
- Presence of Multinational Corporations

55. Geographical Dimensions of the Service Economy
Sunbelt: southern region of the US stretching from the southeast to the southwest
- secondary industrial regions moving into Atlanta, Phoenix
- high-tech industry

56. Wal-Mart
Requires producers of goods to locate offices in the Bentonville, Arkansas (Wal-Mart’s headquarters) area in order to negotiate deals with Wal-Mart.
Proctor & Gamble put their office in nearby Fayetteville, Arkansas.
How does the presence of these companies in the region change the region’s economy and its cultural landscape?

57. Nike
Headquartered in Beaverton, Oregon, Nike has never produced a shoe in Oregon. Beginning in the 1960s, Nike contracted with an Asian firm to produce its shoes.
Skopje, Macedonia
The swoosh is ubiquitous, but where is the shoe produced?
Nike has a global network of international manufacturing and sales.

58. Modern Production Outsourcing –
moving individual steps in the production process (of a good or a service) to a supplier, who focuses their production and offers a cost savings.
Offshore –
Outsourced work that is located outside of the country.

59. High-Technology Corridors
An area designated by local or state government to benefit from lower taxes and high-technology infrastructure with the goal of providing high-technology jobs to the local population.
eg. Silicon Valley, California
Technopole – an area planned for high technology where agglomeration built on a synergy among technological companies occurs.
eg. Route 128 corridor in Boston

60. Plano-Richardson, Texas Telecom Corridor is just north of Dallas