1. The Geography of Manufacturing Whitney Plaizier Shirley Soon Local and Regional Development March 18, 2009

2. New Industrial Spaces  New areas of manufacturing concentrations  Beyond those already developed in Europe or North America  Not limited by geographical boundaries or established notions  Examples:  Advanced Countries (Italy)  Developing Countries (Mexico and China)

3. Established or NIS  Advantages on Building on Established Areas:  Existing pools of skilled labor  Infrastructure  Advantages of New Industrial Spaces  Easier implementation of new forms of work organization  New employment conditions  New plant configurations

4. Geographic Unevenness of Manufacturing  Industrialization and investment is geographically selective  Results in highly variable rates of manufacturing growth  Industrialization has been a profoundly regional phenomenon

5. The Issue of Exports  Source of competitive stimulus and tension between places  Industrialization is tied to the terms of trade  Geographical concentrations rely upon interregional and international exports  Create tensions between new and old industrial spaces as exports replace domestic industries  Protectionist policies

6. Pre/Post Industrial Revolution & The Third World  Pre-Industrial Revolution  Manufacturing production directly correlated with population  3/4 of production located in “Third World Countries” such as China, India and Pakistan  First Wave  UK industrializes as leading power (1830-1860) - Third World declines (60% in 1830)  Second Wave  Development of factory system in UK, Europe, US - Third World declines (7.5% in 1913)  Since 1960  Importance has grown (17% in 1990)

7. Powerhouse Timeline  1750 - China, India, Pakistan  1830-1860 - UK - World’s largest industrial power  1880 - UK peaks  1900 - US > UK with Britain and Germany following  1913 - Established order of US, UK, Germany (total 60.4%) followed by Japan  Post WWI and WWII - Russia growing in importance  1953 - US level of 44.7% of world production due to MNC and FDI development  Declining importance of many European countries including the UK

8. Japan  Post WWII as most dramatic riser  World’s second largest industrial power  Industrial economy comparable to US and double the size of Germany  Massive increases to jobs (4.1 million) while UK is drastically cutting jobs (3 million)

9. Newly Industrialized Countries  Fastest rates of growth outside the OECD  Spain, Portugal, Greece, former Yugoslavia, Mexico, Brazil, Hong Kong, Singapore, Taiwan and South Korea  Four Asian Tigers - domination in the 1990s until the currency crisis  Employment rapidly increasing even though portion of world manufacturing production is minimal  “Shift of manufacturing value added, production and employment to new industrial spaces in the Third World”

10. Contemporary Global Patterns of Trade  Historic connection between industrialization and trade  Leads to development of geographically concentrated, specialized industrial regions  Increase in manufactured exports from developing countries and NICs to those established industrial countries

11. Regional Variations - Example Canada  Trade within borders  Natural resources  Service Industries  Variations in export sales rations  BC and Saskatchewan (24.5% and 27.4% of GPP)  Alberta and Manitoba (19.5% and 13.4% of GPP)

12. Variations in Imports to Exports  Recent trend towards deficits in terms of trade  More nations leaning towards affordable imports versus supporting more expensive domestic products  Harms domestic employment and profitability  Visible trade versus invisible trade

13. The Softwood Lumber Issue  Canada versus United States  Economically intertwined, especially with trade  25% of US softwood lumber from Canada  Sparked protectionist action on a regional level in the United States  Damaging to Canadian producers

15. Regionalization American Manufacturing Belt  Industrial heartland for the continent  Developed transport networks  Zones: Consumer goods, producer goods (machinery), less-specialized goods Axial Belt in the United Kingdom  Industrial strengths coupled with access to the London market Ruhr Region  Important centre of industry - access to the Rhine River, European and world markets  Foundation for Europe’s coal, iron, steel and heavy engineering region

16. De-industrialization  Many areas of the American Manufacturing Belt  Loss of manufacturing jobs versus sustained national average  Spatial shifts towards new areas able to support new industries  Aerospace, electronics and chemicals

17. The Economics  The richest, powerful = most industrialized (OECD nations)  Per capita and income gross domestic product increases  Three-sector “stage” model  Primary, secondary, tertiary industries dominate the economy at different times  But they all lead to the next stage together  Manufacturing and industry are still important as a knowledge based society takes hold  Job opportunities!

18. The Job Issue  Manufacturing capabilities have outstripped the need for as many workers  Creation of jobs will be a difficult task for future  Government commitment and involvement

19. Smith versus List  Economic Liberalism  Division of labor and pursuit of self-interest  Fair competition  Minimal government involvement  Economic freedoms - trade, investment, labor movement  Economic Nationalism  Development of “productive forces”  Interrelationships between industry, agriculture, commerce, and transport  Tied to improvements in heath, education, religion and family life - therefore a government intervention

20. Liberalism verus Nationalism  Decide industrial development  Technology transfer, capital goods development, skill formation, inter-firm relations  Liberalism  Support FDI  Nationalism  Cautious towards FDI  Legislation and bureaucracy

21. Canada and Sweden  Canada  Encourages competition and FDI for increased knowledge consumption  Cheaper than developing independently  Sweden  Development of domestic industries  Heavy research and development utilized around the world  Dated technology for employees to develop on

22. Today  NICs incredibly important in export- oriented activities  Countries unable to change status levels since the 1930s  Periphery, semi-periphery, core country status

23. Urbanization  Great ties to industrialization  Manufacturing anchored by metropolitan cities with high growth  Development of inner-city suburbs supporting manufacturing employment  Non-metropolitan industrialization trend