Unit 7 APHUG 2023

Agglomeration

when a substantial number of enterprises cluster in the same area, as in a large industrial city, they can provide assistance to each other through shared talents, services and facilities

Alfred Weber's Least Cost Theory

a theory of industrial location in which an industry is located where it can minimize its costs, and therefore maximize its profits; it takes into account the labor costs, agglomeration, and specially transportation costs. Bulk Gaining and Bulk reducing factor determine location.

Bulk Gaining

makes something that gains volume or weight during production (causes factories to be near the markets (soda fillers or car assembly plants)

Bulk Reducing

makes something that loses volume or weight during production (causes factories to be near the source of the raw materials)

Markets

the purchasers/consumers NOT THE CBD (WHICH IS URBAN)

Just In-Time Delivery

system in which the inputs needed in assembly arrive at the assembly plant very close to when they are needed; companies receive raw materials or goods only as they need them for production

Break-of-Bulk Point

a location along a transport route where goods must be transferred from one carrier to another

Commodity Theory

a country's exports are 60% commodities (too much dependence on commodities for economic success)

Comparative Advantage

the competitive edge in the form of lower production costs or cheaper raw materials enjoyed by one location over another; assuming an established demand for a commodity, we might expect places with favorable growing conditions, cheap or pliant labor, and/or the most imaginative marketing campaigns to capture market share

Complimentary Advantage

supply of something in one place and the demand for it in another; for two places to interact one place must have a supply of an item for which there was an effective demand

Core Countries

dominant countries with strong military, economy, infrastructures, overall "better" countries

Microloans

small amounts of money lended to people to aid them in businesses by NGOs (usually to women; refer to microloans to women by NGOs)

Multiplier Effect

jobs create new jobs (factory owners will create more jobs for factory workers); also works in reverse in which factory owners who close down factories will create a loss of jobs; additional economic opportunities that can be generated (e.g. a corporation deciding to establish in a new location created many jobs)

Dependency Theory

the core sells consumer goods and provides money to the periphery and semi-periphery countries, and the periphery sends cheap labor and natural resources to the core and semi-periphery countries

Outsourcing

contracting work to non-company employees; Apple contracts Foxconn who hires Chinese workers to assemble the iPhones

Offshoring

moving your backoffice; customer call centers (usually in India) sometimes to the south in the US

Substitution Principle

businesses seek to maximize profit by substituting one factor of production for another mainly by mechanization

Periphery Countries

"worse" countries that are still developing and often have unstable governments and economies; former colonies and usually export natural resources to core countries

Export Processing Zones

zones typically in LDCs that focus on manufacturing for export; the government offers free trade conditions like tax exemptions and other incentives to encourage the setting up of shops and manufacture goods to export

Special Economic Zones

an area of a country where the business and trade laws are different from other regions of the country; used to attract foreign direct investment from MNCs, countries offer tax incentives for that investment (common in China)

Fordism

the system of mass production that was pioneered in the early 20th century by the Ford Motor company; the typical postwar mode of economic growth and its associated political and social order in advanced capitalism

Post-Fordist Methods

includes production, multiplier effects, economies of scale, agglomeration, just-in-time delivery, service sectors, high-technology industries, and growth poles; mainly automation, using robots and computer systems to replace human assembly lines, still needing skilled workers who are usually found in core industrial regions (there is no problem paying high wages for their services)

Fertility Rate

the number of live births in a year per 1,000 women of reproductive age in a population

Primary Sector

industry focused on obtaining raw resources (mining, forestry, fishing...)

Quaternary Sector

involve the processing of information, education, and finance information (finance, insurance, real-estate); in other words, doing something with the data

Quinary Sector

characterized by decision makers, CEOs, or people in government roles; they use the data from quaternary sectors to make decisions for MNCs

Gender Inequality Index

measures gender inequality, and looks at reproductive health, indices of empowerment, and labor-market participation 0-1

Adolescent Fertility

(part of GII) the number of births per 1000 women aged 10-19 years old

Educational Attainment

do women get education past high school? (part of GII)

Maternal Mortality

the rate of women who die during pregnancy or 1 year after birth per 100,000 births (part of GII)

Gross Domestic Product

total value of goods produced and services provided in a country during one year; remittances sometimes account for 4% country's GDP

Gross National Income

calculates the total income earned by a nation's people and businesses, including investment income, regardless of where it was earned; money received from abroad such as foreign investment and economic development aid

Rostow's Stages of Economic Growth

holds that increase in technology will increase wealth throughout the globe, and that low-income nations can follow the path taken by wealthier, modernized nations; there are different stages of development: traditional society, preconditions to take off, take off, drive to maturity, high mass consumption

Traditional Society: local power, local trade, rural setting, family-based culture, subsistence farming, primary sector, low technology, limited wealth; Medieval Europe

Preconditions to Take Off: leadership begins in politics, small scale international trade, beg. of urbanization, acceptance for change, shift to secondary sector, transportation technologies and mechanized farming, increased investment in business and infrastructure; Nigeria and Afghanistan

Take Off: major export industry, increased international trade, urbanized, more agricultural efficiency allows more labor for other sectors, full industrialization, advancements in technology, businesses are making money and shit to consumption (direct foreign investment); NICS like India and Vietnam

Drive to Maturity: the population growth declines, more widespread education and specialization of industry, high levels of power consumption, improved transportation and communication systems, diversification and value added exports; Brazil, Russia, China, Asian Tigers (Korea, Taiwan, etc.)

High Mass Consumption: the population growth continues to decline even more, mostly tertiary sectors with educated workforce, high levels of power consumption with more transportation and communication systems, people would rather spend money on nonessential goods; Japan, Europe, the US since 1950, Canada

Criticisms of Rostow's Model

it was based on industrialized, capitalist, democratic countries, which falsely assumes every country values those ideals; scale and uneven development, in which growth is not uniform worldwide

Gross National Income per capita

GNP divided by a country's population so that you have an estimated income per person

Secondary Sector

industry focused on converting materials to products (factories)

Gross National Product (same as GNI)

calculates the total income earned by a nation's people and businesses, including investment income, regardless of where it was earned; money received from abroad such as foreign investment and economic development aid

Semi-Periphery Countries

"middle-income" countries, share aspects of the core and the periphery, industrializing; countries like Brazil, Russia, India, China, South Africa, Mexico

Neoliberalism

favors free market economies and privatization over governmental control; supports NAFTA. Neoliberal trade policies seek to lower barriers (duties, taxes, tariffs) to make it easier to trade.

Free Trade Agreements

the members of the agreement agree to remove (over time) tariffs on goods moving between them (e.g. NAFTA)

International Trade Path

the Four Dragons or Tigers were the first to adopt the International Trade Path; South Korea, Singapore, Taiwan and Hong Kong had large amounts of land but no natural resources, so the governments promoted development on manufactured goods (electronics and clothing)

Technopole

centers or nodes of high tech research and activity around the high-technology corridor is sometimes established

Growth Poles

concentration of highly innovative and technically advanced industries; other business will develop close by to provide good and services that these advanced industries need

High Technology Industries

companies that support the growth and development of sophisticated technologies

Human Development Index

the composite measure used to show spatial variation among states in levels of development; examines three features of a country's human development: long and healthy life, knowledge, and standard of living.

Tertiary Sector

industry focused on providing services (banking, bus-drivers, teachers, lawyers)

Infant Mortality Rate (IMR)

the number of deaths of those under one year old in a given year per 1,000 live births.

Wallerstein's World System Theory (Core-Periphery Model)

the core countries have structures left from colonialism (makes the core countries have power over the periphery); the core and periphery countries are interdependent; periphery countries don't develop easily

Weber Least Cost Theory

Explains the location of manufacturing establishments is determined by the minimization of three critical expenses: labor, transportation, and agglomeration. locational triangle.

Ecotourism

the practice and business of recreational travel based on concern for the environment. Developing countries use this to diversify their economies.

Informal economy

neither taxed nor monitored by any form of government (Black Market and Under the Table); makes up a significant portion of the economic in developing countries; provides important economic opportunities for the poor

International Division of Labor

an outcome of globalization in which there is a shift of manufacturing industries from developed countries to developing countries since there is lower wages in those countries leading to lower costs for companies

Glass ceiling

a barrier to advancement in a profession affecting women and minorities