Unit 7-2: Industrial and Economic Development

Agglomeration Economies

Occurs where firms cluster spatially in order to take advantage of geographic concentrations of skilled labor and industry suppliers, specialized infrastructure, and ease of fact-to-face contact with industry participants.

Assembly Line

A system of manufacturing in which parts and procedure are added one step at a time through a series of work stations until a finished product is assembled.

Commercial Farmers

farmers who raise crops and livestock to sell in the market at a profit rather than raising them for their own consumption

Comparative Advantage

country's ability to produce a given product relatively more efficiently than it can produce other products within its economy.

Deindustrialization

The decline, and sometimes complete disappearance, of employment in the manufacturing sector in the core's industrial centers.

Export Processing Zone (EPZ)

Industrial zone with special incentives to attract foreign investment to places where imported materials undergo processing or assembly before being re-exported.

Fordism

The economic and social arrangement based on the mass production of standardized goods, high labor union membership rates and full-time manufacturing employment, and high factory wages that enable mass consumption

Free-Trade Agreement

A treaty between two or more countries that reduces tariffs and promotes foreign investment.

Free-Trade Zone (FTZ)

Specially designated duty-free area that provides warehousing, storage, and distribution facilities for goods intended for trade or re-export

Growth Pole

Geographically pinpointed center of economic activity organized around a designated industry, commonly in the high-tech sector

High-Technology Industry

An industry that develops and uses the most advanced technologies available and has the highest levels of research and development

Import Substitution Industrialization (ISI)

an economic development policy intended to replace imported goods with domestically produced goods as a way to spur industrialization and reduce dependence on other countries

Industrial Revolution

The rapid transformation of the economy through the production of machines, new power sources, and new chemical processes in Europe and the United States between 1760 and 1830

International Division of Labor

The situations in which labor forces of different countries and world regions play complementary roles in an interdependent global economy.

International Monetary Fund (IMF)

International organization that seeks to foster global monetary cooperation, achieve financial stability, facilitate international trade, and promote sustainable economic growth.

Mass Production

The machine manufacture of large quantities of identical products

Mercantilism

A theory of trade stating that each country strives to export more than it imports in order to accumulate wealth

Multiplier Effects

The creation of new businesses and jobs in other industries as the result of investment in a different industry

Neoliberalism

A range of pro-market and anti-government positions in the economy, such as reducing government ownership and regulations and promoting privatization and market-based solutions.

New International Division of Labor

The spatial shift of manufacturing from developed countries to developing countries, including the global scaling of labor markets and industrial sites

Offshoring

The relocation of manufacturing and support services from one country to another.

Outsourcing

The transfer of part of a firm's internal operations to a third party

Post-Fordism

The shifts from manufacturing centers to spatially dispersed production sites, from standardized mass production to specialized batch production, and from a permanent workforce to temporary and contract workers

Special Economic Zone (SEZ)

Specific area within a country's borders where business and trade laws are different from those in the rest of the country

Tariff

a tax on imported goods and services

Textile

A fabric or cloth woven from the fibers of wool, cotton, or flax.

Transnational Corporation (TNC)

A firm with the power to coordinate and control operations in more than one country, even if it does not won those operations

Wage Labor

a socioeconomic relationship in which an employer pays a worker to complete a task, sometimes by the day or by the hour

World Bank

An international financial organization that provides funding and expertise to promote sustainable economic growth in developing countries

World Trade Organization (WTO)

An international organization that regulates trade among 184 member states, providing a framework for negotiating trade agreements and resolve trade disputes

Complementarity

The mutual trade relationships that exists between two places based on the supply of raw materials and the demand for finished products of services.

Cottage Industries

Pre-industrial form of manufacture in which members of families spread out through rural areas and worked in their homes to make goods

Deindustrialization

Process by which a country or area reduces industrial activity, particularly in heavy industry and manufacturing

International Division of Labor

a pattern of production and labor in which different countries are engaged in distinct aspects of production

Just-In-Time Delivery

A system in which goods are delivered as needed so that companies keep inventory only what is needed for near-tern production

Foreign Direct Investment (FDI)

The purchase or construction of factories and other fixed assets by transnational corporations

Maquiladoras

(also maquilas) Foreign-owned manufacturing plant located in Mexico for the low cost assembly of clothing, electronics, automobiles, and other export products

Commodity Chain

Steps in cost of production of a good from its design and raw materials to its production, marketing, and distribution

Economies of Scale

Savings in cost of production that comes from increasing production of a good

Global Division of Labor

The ability of corporations to employ labor from around the world, made possible by the compression of time and space through innovations in communication and transportation systems.

Just-In-Time Delivery

Production system in which parts are delivered as needed to the assembly line so that parts are not warehoused, stored, or overproduced.

Newly Industrialized Countries (NICs)

States with growing industrial and service economies and an increasing presence in global trade

Outsourcing

Hiring employees outside of home country of a company in order to reduce the cost of labor inputs for the good or service

Rust Belt

A region in the northeastern United States that once had an extensive manufacturing industry but has been deindustrialized during the post-Fordist era

Sun Belt

Region of economic growth with an expanding technology-based service sector and a stable manufacturing sector that stretches along the southern United States from Virginia to California.

Vertical Integration

The merging of businesses that serve different steps in one commodity chain