Unit 7.2 HGAP KBAR

Economic sectors

A group of similar industries that produce similar goods and perform similar activities.

Primary Sector

A sector focusing on the extraction of natural resources, such as fishing, mining, and farming.

Secondary Sector

A sector that turns natural resources into finished products, including manufacturing of consumer goods.

Tertiary Sector

A sector providing services to customers, divided into transportation/communication, producer services, and customer services.

Quaternary Sector

A sector focused on intellectual and research positions, including engineers and researchers.

Quinary Sector

This sector includes the most powerful positions impacting the world, like CEOs and political leaders.

Development Levels

Primary sectors are associated with lower levels of development, while tertiary, quaternary, and quinary sectors are linked to higher levels.

Base industry

An industry of disproportionate economic importance, such as steelmaking, which supports other industries.

Colonial Resources

Raw materials sourced by core countries from periphery regions, exemplified by Great Britain's textile industry. The country gained cotton from Egypt and India, which didn’t benefit those countries.

Semi-periphery countries

Countries like Mexico, India, Brazil that emerged as manufacturing and service sectors grew and core countries moved toward higher-level sectors.

Factors influencing manufacturing locations

Energy, labor, markets, and transportation determine where manufacturing is established.

Energy source importance

Manufacturing relies on access to reliable and inexpensive energy sources.

Transportation in manufacturing

Facilities must consider proximity to transportation methods, including ports and railroads for efficient shipping.

Labor costs

Many companies seek to hire in areas with low wages to maximize profit, particularly in periphery regions.

Skilled labor demand

Industries requiring highly educated and skilled workers, like software, must offer higher wages to attract talent.

Least Cost Theory

A theory by Alfred Weber stating that transportation costs and weight of goods are critical factors in determining manufacturing locations.

Location triangle model

Weber's model illustrating the cost relationships between distance, transport, and weight of goods.

Market proximity for heavy products

Firms producing heavier final products often choose locations closer to the market.

Raw material proximity for lighter products

Firms whose final products are lighter than raw materials may locate closer to the raw material sources.

Soft-drink bottling example in Georgia,

Bottling plants are typically near markets due to the heavier weight of the final product, soda, compared to its input, water.

Limitations of Weber's model

Challenges include abstract nature, less emphasis on transportation for high-skilled industries, and assumption of perfect knowledge among decision makers.

Global trade networks

Economic relationships developed through the sourcing of raw materials from peripheries and manufacturing in core regions.

Periphery activities

Economic activities in developing nations often focused on primary and secondary sectors.

Industrial zones organization

Historical placement of manufacturing in core countries while primary sector activities remained in periphery countries.

Textile industry dynamics

Great Britain's textiles were reliant on raw materials from colonies while maintaining factories in urban cores.

Production efficiency

Companies often concentrate on reducing overall production costs while maintaining efficacy in manufacturing.

Hydroelectric energy examples

Early aluminum manufacturing plants required proximity to hydroelectric facilities like Niagara Falls.

Modern shipping containers

Around 90% of global non-bulk cargo is transported using standardized shipping containers.

High value-weight ratio

Goods with expensive nature relative to weight, ideally suited for air transport.

International Division of Labor

Global allocation of labor where peripheral regions usually host lower-skilled, lower-wage jobs. Many manufacturing facilities shift from core countries to periphery countries.

Research sector focus

Quaternary sector emphasizes innovation and intellectual endeavors such as research and engineering.

Economic exploitation

Colonial powers' control over industrial processes in core regions often stunted economic growth in periphery areas.

Manufacturing shift to peripheries

The transition of manufacturing facilities to peripheral regions as core economies evolve towards higher sectors. This happens become manufacturing has decreased in importance.

Sustainability in manufacturing

The need for companies to balance profitability with sustainable practices in sourcing and labor management.

Geographic economic patterns

Identifiable trends regarding the distribution of industries, affected by historical and economic factors.

Factors in tech industry location

High-skilled industries benefit from proximity to universities and research institutions for recruiting talent.

Example of Importance of Materials

Many automobile manufacturers require massive amounts of steel (that has to be processed from iron ore), ready to be stamped into a variety of shapes. Therefore, the location of the factories that manufacture inputs will determine the location of the factories that need them

Importance of Labor Costs Example

In early 20th century, the center of textile manufacturing moved from the high wage core of the northeast, like Vermont and Massachusetts to low-wage states of the South like Georgia and South Carolina.

Examples of transportation innovations

Jet planes, shipping boxes, containerization.

Example of Break of Bulk Points

Iron ore mined in Minnesota is taken on ships in the ports of Lake Superior. When they come into the ports of Gary, Indiana, they have to be transferred to railroad cars. The manufacturing point is near the port of Gary.