Unit 7 Review: Industrialization and Economic Development

Industrial Revolution

Started in the 18th century, technological advances resulted in more complex machinery driven by water or steam power that could make products faster and at lower costs than cottage industries.

Significance of Industrial Revolution

It resulted in more complex machinery driven by water or steam power that could make products faster and at lower costs than could cottage industries.

Impact on Factory Locations

As new forms of transportation and electricity were developed during the 19th century, industries became less dependent on the location of local coal supplies and companies could build factories in more diverse locations.

Social Class Changes

More excellent middle class (more people gain a comfortable lifestyle). With industrialization, the middle class expanded rapidly.

Deindustrialization

The process of decreasing reliance on manufacturing jobs.

Significance of Deindustrialization

The increased unemployment, outmigration, lower wages, and general economic decline.

Economic Sectors

Categories of economic activity including primary, secondary, tertiary, quaternary, and quinary.

Primary Sector

The main focus is extracting natural resources from the earth. Eg:) Farming.

Secondary Sector

The main focus is making products from natural resources. Eg:) Manufacturing.

Tertiary Sector

The main focus is providing information and services to people. Eg:) Retail Sales.

Quaternary Sector

The main focus is managing and processing information. Eg:) Financial analysis.

Quinary Sector

The main focus is creating information and making high-level decisions. Eg:) Research.

Growth in Secondary Sector

Secondary is where we are seeing the greatest amount of growth, especially in semi-periphery countries (like those in SE Asia).

Formal vs. Informal Sectors

Formal (recorded/on the books) vs. informal ('under the table' - like babysitting).

Weber's Least Cost Theory

Weber proposed that factory owners would locate their factories where they could minimize their total costs by balancing three factors: minimizing transportation costs, minimizing labor costs, and maximizing agglomeration economies.

Significance of Weber's Least Cost Theory

Explains the key decisions made by businesses about where to locate factories.

Bulk-losing Industry

A.K.A weight-losing, raw material-oriented, raw material-dependent industry. It does not need to pay the cost of shipping the full weight of the material when only part of it is needed.

Bulk-gaining Industry

A.K.A weight-gaining, market-oriented, or market-depending industries. One where the final product weighs more or has a greater volume than the raw materials used in its production.

Break of Bulk Point

Quick transfer/unloading of cargo to another form of transportation (ex: transfer from a container ship to a truck or train).

Inequality within a Country

Inequality can exist WITHIN a country due to cultural differences, governmental policies, etc.

Human Development Index (HDI)

The four indicators that make up the score are years of schooling, expected years of schooling, life expectancy at birth, and gross national income (GNI) per capita.

Gender Inequality Index (GII)

A composite measure of several factors indicating gender disparity.

Measurements

Reproductive health, empowerment, labor market

Human Development Index (HDI)

Generally a direct correlation with the HDI, but not always (like the U.S.)

Women's Empowerment

Women can improve their status by accessing a higher education and political positions, but there are social and cultural factors in each country that can hold women back

Wallerstein's World Systems Theory

A theory that categorizes countries into core, semi-periphery, and periphery based on their economic development.

Core Countries

These are the most developed, industrialized, and economically powerful nations, often with high levels of technology and capital.

Semi-Periphery Countries

These countries are in a transitional stage, with economies that are more developed than periphery countries but less developed than core countries.

Periphery Countries

These are the least developed and economically weakest nations, often characterized by low levels of industrialization and dependence on raw material exports.

Interdependence

A concept where countries are mutually reliant on each other economically.

Rostow's Stages of Economic Growth

A model that outlines the stages of economic development from traditional society to high mass consumption.

Traditional Society

Characterized by a subsistence, agricultural-based economy with limited technology and a pre-scientific outlook.

Preconditions for Take-off

A society begins to develop manufacturing, sees a wider work, and implements manufacturing practices, with social, political, and economic progress.

Take-off

A short period of intense growth with industrialization, urbanization, and a few key industries driving economic growth.

Drive to Maturity

Self-sustained growth, rising standards of living, increasing technology use, and a diversifying national economy.

Age of High Mass Consumption

A capitalist system, mass production, and consumerism in dominant economies.

Weaknesses of Rostow's Model

Doesn't take into account that these countries are interdependent.

Comparative Advantage

The ability of a country to produce goods at a lower opportunity cost than others.

Neoliberal Policies

Policies that increase trade by reducing tariffs and regulations.

Tariffs

Taxes on imports that decrease trade but protect domestic businesses from foreign competition.

Supranational Trading Blocs

Groups of countries that come together to promote trade among themselves.

European Union (EU)

A supranational trading bloc with no tariffs/free trade between member states.

Outsourcing

Contracting work to noncompany employees or other companies.

Offshoring

Moving back offices to other countries by multinational manufacturing companies.

Globalization

It decreases the cost of manufacturing and consumers have access to a wider variety of goods.

Export Processing Zones (EPZs)

Special manufacturing zones that attract TNCs and MNCs by offering various incentives.

Significance of EPZs

Offer foreign corporations major tax savings, inexpensive labor, fewer environmental regulations, and proximity to transportation networks.

Agglomeration Economies

Cost reductions and efficiencies that arise when companies and industries cluster together in a specific area.

Technopoles

A hub for information-based industry and high-tech manufacturing.

Sustainable Development

The goal is to address problems caused by depletion of natural resources, mass consumption of goods, pollution of air and water, and the impact of climate change.

Ecotourism

Travel to a region by people who are interested in its distinctive and unusual ecosystem.

Significance of Ecotourism

It promotes environmental conservation efforts and helps to preserve natural areas.

UN Sustainable Development Goals

In 2000, the United Nations identified the most challenging barriers to development and eight key steps to overcoming them.