Industry Vocab

Agglomeration

Companies in the same industry clustering together to gain benefits from being near each other (e.g., tech companies in Silicon Valley).

Agglomeration Diseconomies

Problems that occur when too many businesses cluster in one area, causing traffic jams, pollution, and high rent.

Ancillary Activities

Support businesses that spring up around a main industry, like restaurants near a stadium.

Cumulative Causation

The process where successful places keep getting more successful by attracting more businesses and investment.

Base Ratio

The relationship between jobs that bring money into a region (exports) and jobs that just circulate money within the region (local services).

Basic vs. Non-Basic Sectors

Basic sectors bring new money into a region through exports; non-basic sectors provide local services that recycle money already in the region.

Brain Drain

When talented, educated people leave developing countries for better opportunities elsewhere, hurting their home country's economy.

Break of Bulk Point

A location where large shipments are broken down into smaller ones and transferred between transportation types.

Brick and Mortar vs. e-Commerce

Traditional physical stores compared to online shopping, illustrating a shift in retail practices.

BRICS

Brazil, Russia, India, China, and South Africa, which are large developing economies with growing global influence.

Bulk Gaining Industries

Industries where the product weighs more than its ingredients, typically located close to the market.

Bulk Reducing Industries

Industries where the product weighs less than the raw materials, usually located close to the raw materials.

Localization Economies

Cost savings that occur when similar businesses cluster together and share resources.

Comparative Advantage

The ability of a region to produce a good at a lower opportunity cost than others.

Core-Periphery Model

A model showing the pattern where wealthy core regions control and exploit less-developed peripheral regions.

Digital Divide

The gap between individuals who have access to modern technology and those who do not.

Backwash Effect

When successful areas draw resources, talent, and money away from struggling areas.

Deindustrialization

The process where manufacturing jobs disappear from a region, leading to economic change.

Deglomeration

When businesses move away from crowded city centers to reduce costs and congestion.

Cottage Industry

Small-scale production that occurs in homes, often using traditional methods.

Sustainable Development

Economic growth that meets present needs without compromising the ability of future generations.

Primary Sector

Resource extraction, such as farming and mining, representing a country's level of development.

Ecotourism

Travel that protects natural environments and supports local communities.

Export Processing Zones (EPZ)

Special areas where foreign companies can build factories with tax breaks and fewer regulations.

Transnational Corporations (TNCs)

Large companies that operate in multiple countries and often wield more economic power than governments.

Factory Location Considerations

Factors businesses consider when deciding on factory locations: labor costs, transportation, geography, and government incentives.

Fast World vs. Slow World

The division between regions connected to global networks and those that are left behind.

Foreign Direct Investment

Investment made by a company or individual in one country in businesses based in another country.

Fordism

Manufacturing system based on assembly lines where each worker performs a simple repetitive task.

Footloose Industries

Industries that can locate almost anywhere because their products are lightweight or digital.

Formal Economic Activities

Legal and taxed business transactions counted in official statistics like GDP.

Informal Economic Activities

Economic activities that occur off the books, such as those not taxed or counted in GDP.

Four Tigers

Hong Kong, Singapore, South Korea, and Taiwan, known for rapid economic transformation through manufacturing and trade.

Gross Domestic Product (GDP)

The total value of all goods and services produced within a country's borders.

Gross National Product (GNP)

The total value produced by a country's citizens and companies, including overseas earnings.

Purchasing Power Parity (PPP)

A method of comparing living standards across countries based on local buying power.

Gross National Income (GNI)

GDP plus income earned by residents abroad minus income earned by foreigners within the country.

Gender Inequality Index (GII)

A measure comparing women's outcomes to men's in health, education, and employment.

Human Development Index (HDI)

A composite index measuring quality of life indicators, including life expectancy and education.

Industrialization

The transition of a society from agricultural to manufacturing, often resulting in urbanization.

Industrialized Countries

Nations where manufacturing and services dominate the economy over agriculture.

Infrastructure

The essential systems and structures necessary for a society to function effectively.

Intervening Opportunities

Closer options that attract migrants or consumers before they reach farther destinations.

Call Centers

Offices where employees handle customer service calls, often in regions with lower labor costs.

Manufacturing Region

Areas specializing in specific products, such as the Rust Belt for steel or electronics in China's east coast.

NAFTA

Trade agreement between the US, Canada, and Mexico that reduces trade barriers.

Neocolonialism

Economic control exercised by wealthy nations over poorer countries without direct political rule.

Offshore Financial Centers

Territories that attract foreign investments with minimal regulations and taxes.

Outsourcing

Contracting external companies to perform services previously done internally.

Rostow's Stages of Development Model

Theory suggesting all countries follow five developmental stages, criticized for its linear approach.

Service Offshoring

The relocation of service jobs to countries where labor is cheaper.

Spatially Fixed vs. Spatially Variable Costs

Costs that remain constant regardless of location versus those that change based on geographic factors.

Transition of the Global Economic Core

The historical shift of economic power from regions like the Mediterranean to East Asia.

Urbanization Economies

Benefits gained by businesses due to their location in urban areas, including shared resources.

Weber's Least Cost Theory

A model that predicts factory locations based on minimizing transportation, labor, and production costs.

World Systems Theory

A framework categorizing countries based on their roles in the global economic system.

Structuralist Theory

The perspective that suggests poor countries remain impoverished due to an inequitable global system.

Maquiladoras

Factories located near the US-Mexico border that import materials for assembly using cheap labor.

Special Economic Zones

Designated areas with favorable regulations to attract foreign investment and boost economic activity.

Growth/Techno Pole

Regions focused on high-tech industries aimed at stimulating local development.

Millennium Development Goals

UN targets aimed at reducing global issues such as poverty and inequality by 2015.

Trafficking

The illegal trade of people, drugs, weapons, or wildlife across borders.

Intermodal Connections

Locations where goods are transferred between different modes of transport for efficient shipping.

Neoliberalism

A political and economic ideology advocating for free markets and minimal government intervention.

Island of Development

An area of economic prosperity surrounded by regions of poverty, highlighting stark contrasts.

Non-Governmental Organizations

Independent groups addressing social or environmental issues without government involvement.

Microcredit Program

A system providing small loans to individuals who do not qualify for traditional credit.

Flexible Production Systems

Manufacturing processes that can quickly adapt to changes in demand rather than relying on mass production.

Just-In-Time Delivery

A supply chain strategy where materials arrive exactly as they are needed to minimize storage costs.