Unit 6: Industrialization and Economic Development

Industrialization

leads to population growth, mass production of resources, transportation developments, and scientific advancements

Cottage industry

small-scale production in homes or village workshops

Seed drill

Jethro Tull’s invention which simplified planting and farming

Reaper

Cyrus McCormick’s invention which cuts and gathers crops

Flying Shuttle

improved weaving thread strands to form textiles; John Kay in 1733

Spinning Jenny

spun cotton into thread; James Hargreaves 1764

Cotton gin

Eli Whitney’s invention which separated cotton seeds from fibers

Factories

large urban infrastructure for raw materials, machines, and workers

Tenements

small, limited apartments for housing working class families

Labor/trade unions

workers in specific industries used collective bargaining to improve conditions

Sectors of production

economic categories based on steps of production

Primary production

involves cultivation of Earth and its natural resources

Secondary production

processing of natural resources and raw materials from primary sector

Manufacturing

processing raw materials into finished goods, part of the secondary sector

Tertiary production

involves movement, marketing, and commercial retailing of goods for consumers

Quaternary activities

modern financial aspects of the economy

Quinary activities

include more direct involvement with consumers in the services sector

Horn of Africa

Ethiopia, Eritrea, Somalia, and Kenya
primarily agrarian developing societies

Famine

mortality rates increase due to malnourishment and starvation

Commodity chains

systems and processes that collect, manufacture, package, and distribute goods and resources

Fair Trade

products designated with a label that were produced under lawful, non-exploitative conditions

Energy extraction

natural fuel is extracted from the Earth for human use

Fossil fuel

non-renewable natural fuel formed from past organisms

Resource-dependent countries

lack economic diversification and rely on a primary natural resource for the economy

Alternative energy sources

nuclear, wind, solar, tidal, and geothermal power

Value-added processing

calculating the factors that go into the cost of a finished product

Synthetic

man-made, artificial

Utility

usefulness of a product

Durable goods

a finished product designed to last a year or more

Nondurable goods

intended to be used once and then disposed of

Resource processing

secondary economic activity involving processing natural resources into products for human consumption

Services

industries involving intangible goods fueled by human interaction and attention

Low benefit service jobs

require little skill and have poor pay

High benefit service jobs

reliant on technology and receive good wages and benefits

Deindustrialization

developed nations outsource industrial manufacturing

Offshoring/outsourcing

movement of jobs outside the country where the company creating jobs is located

First World nations

industrialized during the 19th century with free markets and service-based economies

Second World nations

formerly communist nations still undergoing economic restructuring

Third World nations

lack strong infrastructure, organized government, and modern economic development

Rust Belt

formerly the Steel Belt in the northeast and midwest US responsible for manufacturing

Gini calculations

ranks nations based on levels of development
high number = greater wealth disparity

“Fouth World” status

countries set back severely by issues including armed conflict, natural disasters, and political instability

Failed state

a nation’s inability to maintain organized government or development a successful economy

MDCs

more developed countries

LDCs

less developed countries

NICs

newly industrialized countries

Wawasan 2020 (Malaysia)

government project started in 1990 for Malaysia to reach status of a first world nation

World Bank & International Monetary Fund

organizations aiding in assistance and stability of economic systems

Meiji Restoration

period of modernization and development into nation-state

Syngman Rhee

president of South Korea; helped development of technology and machinery

Lee Kuan Yew

founding president of Singapore; stabilized politically and developed economy

“Old Tigers” of Asia

Japan, South Korea, Taiwan, Hong Kong, Singapore
countries early in economic development

“New Tigers” of Asia

China, India, Malaysia, Vietnam, Thailand, Indonesia
newer to economically develop

Baht

Thailand’s currency that experienced Mass devaluation

1997 Asian Financial Crisis

banking crash began in South Korea and many currencies devalued
countries changed economic structures and had to undergo reform

Economic indicators

measurements used to describe and categorize a country’s standing in terms of economic development

Gross Domestic Product (GDP)

monetary value of final goods and services; common calculation of economic development

Gross National Income (GNI)

total money earned by people and businesses

Trade deficit

a country’s imports exceed the value of exports

Per capita

per person or resident in a country

Gross National Income Purchasing Power Parity (GNI PPP)

GNI converted using price differences across countries

Walt Rostow

American economist who formulated a five stage theory on economic development

Rostow’s Stage One

farming, fishing, basic exploitation of land

Rostow’s Stage Two

begins with increased political interest in developing the economy
government provides resources to improve infrastructure, trade opportunities, educational and employment opportunities

Rostow’s Stage Three

economy begins taking off, but with uneven levels of development

Rostow’s Stage Four

advancements in technology and greater access to higher education
further diversification of the economy, increased education, and reaching domestic needs and exporting goals

Rostow’s Stage Five

height of mass consumption and service-based economy
increased education, strong middle class, less extreme poverty

Raul Prebisch’s “Dependency Theory”

argued less developed and newly developed countries remained too dependent on developed countries and foreign-owned businesses and investments

Import Substitution Industrialization (ISI)

a nation attempts to industrialize to be self-sufficient rather than relying on imports and foreign goods

Mohammad Mossadegh

Iranian prime minister who attempted to nationalize the oil industry

Internationalization of economic capital

companies are require to reinvest in local banks or credit funds

Ecotourism

tourism focusing on an area’s natural amenities

Free Trade

removal of tariffs and import regulations in an agreement between nations

NAFTA

North American Free Trade Agreement (US, Canada, Mexico)

“Special Economic Zones” (SEZs)

areas where foreign firms are granted special tax status

Alfred Weber

German economist who published Theory of Industrial Location

“Weight losing” industries

a single natural resources loses mass during production process

Distant elastic products

an element can move short or long distances without impacting flow of processing

“Weight gaining” industries

combining several elements into a finished product brought to markets

Supply chain

steps of distributing a commodity or commercial product

Ubiquitous industry

having universal value across time and space

Vertical Integration

single commercial entity owns all aspects of production, marketing, and distribution

Henry Ford

founder of Ford Motor Company

Sprawl (urban)

building extends continuously over a broad land area

Retail location theory

a city’s market area has a threshold (minimum numbers of consumers who support) and a range (minimum number of consumers willing to travel).

Retail (Or service provider) threshold

minimum number of consumers to support the business.

Spatial margin of profitability

the area where the demand for a service can generate revenue exceeding cost of operation

Service location theory

locations of high-benefit and physical position

High benefit services

finance, research, architecture, and specialized medicine

Agglomeration

high concentration of certain activities or enterprises in a general location

Deglomeration

overload of related industries in an area

The Industrial Revolution

began in Great Britain in the 18th and 19th centuries

“Five Year Plans” (USSR)

Joseph Stalin’s plan to industrialize the USSR

Marshall Plan

provided economic recovery and aid to rebuild industry and infrastructure in Western Europe

“Made in Germany”

national brand designating items of high quality

Nokia

one of the first cell phone companies developed in Finland

“Right to Work” states (US)

businesses regulations limit labor unions and result in lower pay and fewer benefits

“Glass ceiling”

limits and barriers to economic advancement for women and minorities in the workforce