1. Chapter 7 Manufacturing
Fundamental nature of manufacturing processes
Major manufacturing regions in the world
Deindustrialization in the developed world and the rise of manufacturing in the developing world
Sector specific dynamics
The rise of flexible production systems, business process outsourcing & downsizing
(The product life cycle model is not in this chapter again)

2. The Nature of Manufacturing
Elements of the manufacturing process:
(a) product design, (b) assembling inputs, (c) transforming the inputs, (d) marketing the product
Location decision – Weber model again
Value added in each stage of production

3. Porter’s Value Chain Firm Infrastructure Human Resource Management
Support
Activities
Technology Development
Procurement
Primary
Activities
Inbound
Logistics
Operations
Outbound
Logistics
Marketing
and Sales
Service
Upstream value activities Downstream value activities

5. Concentration of World Manufacturing
80% of Global Output in Three Regions
How current are these data?
Current role of China?

6. Global Distribution Manufacturing Value Added
U.S. – 22.4%
Source: Calculated from NationMaster.com

7. Shares of Manufacturing Value Added
Source: World Bank World Development Indicators, 2011

8. U.S. & Canadian
Manufacturing
Belt: Accounts
For about
Two-thirds of
Total
Employment in
The U.S. and
Canada
Rise of
Maquiladoras –
Border & interior
Mexico
A good
Overview
Of specialized
Versus market
Oriented
manufacturing

9. Specialization in the Regional Distribution of Manufacturing
Some cartograms – where area is proportional to employment (using the BEA Economic Area classifications)
The first map shows the actual geometry of the BEA Economic Areas
The following maps depict industries distributed broadly across the U.S., and industries that are highly concentrated
These are old maps, but for many lines of manufacturing the data are probably relevant

10. BEA Economic Areas – As of 1985

34. Other Manufacturing Regions
Europe – Figure 7.5, Japan - Figure 7.9
Globalization of manufacturing – movement of capacity from U.S. & Canada, Europe, and Japan to less developed countries
“The new international division of labor”
“Anatomies of Job Loss”

35. U.S. Manufacturing Employment Trendx x
2012
2013

36. Change in U.S. Mfg. Employment 1960-2000
Post-2000 Trends?

37. Deindustrialization in industrialized countries
The Share of Mfg. may have fallen, but real mfg.
output is probably up in all these countries – see next slide for WA state

38. Real Output by Industry WA State

39. Anatomies of Job-Loss: disinvestment
Broad
Structural
Trends
Corporate
Agency
The “outfall”
of restructuring
Spatial
outcomes
Plant openings
Plant closings
In-situ changes
Macroscale
causal forces
in the global
economy
Corporate responses
to global trends
Corporate competitive
strategies
Events
on the
ground
Bluestone & Harrison - Deindustrialization of America:
“The core of B&H’s argument followed a restructuring approach
with the need to restore the drive to accumulate, producing,
through spatially distributed effects, a major reworking of the
role of U.S. cities and regions in the geographic distribution
of production.”

40. Impacts on Manufacturing Jobs in U.S., Europe and Japan
Job losses in manufacturing in all of these regions
Replacement has primarily been in services
Occupations created in the services are frequently very different than occupations lost in manufacturing, leading to high unemployment rates and income deterioration

41. Assets of Centers of Control versus Peripheral Regions
Key role in circulation; realizing wealth
Focal point for investment, profits, interest
Focus on forms of capital: FIRE
Occupational dominance by professionals
“Virtuous” multiplier relationships driven by above points
Support networks of a large cadre of service workers in lower occupational categories
Peripheral Regions
Key role in creating value through labor pools & resource endowment
Compete with centers for capital
Capital transfers to core; possible scarcity in periphery
Multipliers chancy: impacts only if investment comes to them
Employment fortunes conditioned by “waves of investment” and restructuring
No direct transference

42. Current Spatial Outcomes in the U.S.
Old centers are having their power erode
New centers are rising, based on redistribution
Charlotte NC - banking
or the rise of “new industrial spaces”
- Orlando-Melbourne (retirement)
- Las Vegas (entertainment)
- Seattle & Atlanta - technology based
manufacturing & information services
The rural renaissance - retirement, footloose entrepreneurs, recreation, rich people, niche mfg., IT, commuter air and courier services