HGAP 7

Industry

The process of using machines and large-scale processes to convert raw materials into manufactured goods,

Raw Materials

The basic substances such as minerals and crops needed to manufacture finished goods.

Market

A place where products are sold

Cottage Industries

These industries depended on intensive human labor since people used simple spinning wheels, looms, and other tools.

Industrial Revolution (IR)

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

Characteristics of cottage industry vs. factory manufacturing

Scale of production, scale of labor force, method of production, typical building, capital investment, speed of production, efficiency, and market were all the characteristics.

Global-scale diffusion of IR vs. local scale of IR diffusion

Diffused globally starting from Great Britain then to Belgium, France and other countries eventually. Diffused on the local with energy resources, minerals, agricultural products and transportation routes.

Social, economic, and geographic changes to cities as they grow

The industrial changes made factories more abundant which drew people to the cities and attracted more people, which caused a rapid urban growth in cities and a massive increase of middle class people, it also caused problems in environment, health and problems with space.

Impact of IR on imperialism and colonies

Made wealthy countries even wealthier, leading to a freater divide between the advanced, industrialized states and the underdeveloped, nonindustrialized states.

Industrial Belt

industrialized regions were often found in large urban areas that provided a significant workforce and along coasts or rivers which provided easy transportation to global markets.

Deindustrialize

Decreasing reliance on manufacturing jobs. As a result of improved technology, companies needed fewer employees to produce the same quantity of goods

Rust Belt

Regions that have large numbers of closed factories

Primary Economic Sector

This economic sector handles the extraction of natural resources from the earth (farming, mining, fishing, forestry)

Secondary Economic Sector

This economic sector handles the making of products from natural resources (manufacturing, building)

Tertiary Economic Sector

This economic sector provides information and services to people (retail saled, medicine, housekeeping)

Quaternary Economic Sector

This economic sector handles the managing and processing information job (financial analysis, software development, data science)

Quinary Economic Sector

This economic sector handles the creation of information and making high-level decisions (research, top managers in corporation or government)

Structural Changes in Economies (Chart)

Division of labor varies by level of economic development.

Labor Force by Sectors (Chart)

The composition of the labor force changes as the level of economic development changes.

Multiplier Effect

The potential of a job to produce additional job (when an auto manufacturer expands a plant and adds 100 new jobs in a community, the new workers will have more money to spend on food, clothes, and movies, leading to the expansion of other businesses and jobs.)

Weber's Least Cost Theory

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

Agglomeration

Proposed that factory owners would locate their factories where they could minimize their total costs by balancing three factors: • minimizing transportation costs, such as getting raw materials to the factory and moving finished products to where they will be sold • minimizing labor costs, such as the wages and salaries of employees • maximizing agglomeration economies, the spatial grouping of several businesses to share costs, such as an access road to a public highway or development ofa workforce with special skills

Locational Triangle

Weber's model can be shown with this. The three points of the triangle are the market for a good and two resources needed to make the good.

Bulk-reducing Industries

These types of industry are also known as weight-losing, raw material-oriented, or raw-material-dependent industry. (Since transporting the extracted material is more expensive than transporting the finished product, a company can save money by moving production close to the sources of that raw material.)

Bulk-gaining Industries

Weight-gaining, market-oriented, or market-dependent industries

Comparing Weber's Theory to Reality

Model had the benefit of focusing attention on key parts ofa complex process. However, this benefit came with limitations. In response to these limitations, later scholars refined Weber's model by adding other considerations to it. However, the basic model remains useful. It recognizes patterns that can help people make decisions about the spatial distribution of factories, offices, and all types of business that employ workers.

Labor-oriented Industry

Is highly dependent on a workforce and will want to be near a source of those workers.

Break of Bulk

The procedure of transferring cargo from one mode of transportation to another.

Containerization

The system in which goods are loaded into a standardized shipping unit.

Intermodal

Meaning they can be carried on a truck, train, ship, or plane.

Factors in locating industry - national scale of analysis

Proximity to the market of the densely populated northeastern United States • Proximity to raw materials • Availability of sufficient labor with the right mix of skills • Lower than average wages for the United States • Access to global transportation network through the Atlantic Ocean and the Panama Canal • Adequate and affordable supply of power (Southeastern United States )

Factors in locating industry - regional scale of analysis

Favorable government regulations such as tax incentives • Agglomeration economies from nearby factories • Access to global and national transportation networks: Large airport, container ship port, 2 major rail lines and 3 interstate highways • Local universities and tech schools provide skilled workers • Lower than average energy costs for the United States • High quality of education, recreational, affordable housing and medical facilities (Charleston, South Carolina)

Factors in locating industry - local scale of analysis

Large, flat piece of land that is easy to build on • Adequate water and sewer lines • Waterfront access and a dock available for ships • Rail spur line connecting to the main rail system • Good road system connecting to major highways and airport • Adequate space for easy truck loading and unloading • Adequate parking space for employees (Industrial park site beside harbor )

Footloose

They can pack up and leave for a new location quickly and easily.

Back Office

Less expensive office spaces (Employees)

Front Office

Are designed to impress clients. (top executives on the expensive upper floors of a skyscraper in a large city.)

Gross National Product (GNP)

They involve the money generated by citizens and businesses ofa country, regardless of where the citizens are, or live, when money is earned. ( the income of American citizens working in South Korea and the profits from an American-owned factory in Mexico would both count as part of the United States \___)

Gross National Income (GNI)

They involve the money generated by citizens and businesses ofa country, regardless of where the citizens are, or live, when money is earned. ( the income of American citizens working in South Korea and the profits from an American-owned factory in Mexico would both count as part of the United States \___)

Gross Domestic Product (GDP)

The dollar amount ofall final goods and services produced within a country in one year

Remittances

The profits from a foreign-owned company were leaving the country and going back to the home country.

Per Capita

To adjust for the number of people in a country, each country's total output can be divided by the country's total population. This produces an amount per person

Purchasing Power Parity (PPP)

A measure of what similar goods cost in different countries.

Comparing Terms for Level of Development (Chart)

The vast number and variety of terms related to levels of development indicate the challenges of both trying to measure development and categorizing it.

Formal Economic Sector

The portion of the economy that is monitored by government, so people in it follow regulations and pay taxes.

Informal Economic Sector

The portion of the economy that is not monitored by government. It includes several types of economic activities: • Some activities are done without any pay, such as cleaning your own house or cooking meals for a friend who is sick. Similar services done for money are part of the formal economy. • Some activities are legal if reported to the government, but are often not reported. For example, restaurant workers can legally accept tips, but not reporting the income from tips on a tax return is illegal. • Some activities are always illegal, such as drug dealing and identity theft.

Global Energy Consumption Trends

The More Devopled a contry is the more energy it uses. (Map on pg 466)

Gini Coefficient

The values range between 0 and 1. higher the number, the higher the degree of income inequality. A Gini coefficient of0 would mean the population had no inequality—everyone's income was exactly the same. A Gini coefficient of I would indicate total inequality—one person had all the income in a population and everyone else had none.

Regional patterns of economic development

Africa and South America account for 20% of the world population but only 8% of global GDP. Asia has seen the largest income gains in the past five decades due to strong government support for education and business. North America and Europe have been relatively prosperous over the past century, producing about 55% of global GDP. Development can be uneven within countries, with rural or peripheral regions often being less developed than core urban areas.

Social measures of development

The TFR (Total Ferility Rate) | Infant mortality rate (INR) | Life Expectance | Literacy rate

Life Expectancy

The number of years a person is expected to live, has a positive correlation with development.

Literacy Rate

Is the percentage of population that can read and write, usually at an 8th grade level or higher.

Gender Gap

Differences in the privileges afforded to males and females in a society are the

Gender Inequality Index (GII)

A composite measure of several factors indicating gender disparity (Reproductive health | Empowerment (the share of government seats held by each gender and the proportion of adult females and males with at least some secondary education ) | Labor market participation (% of 15+ that work))

Human Development Index (HDI)

Combines one economic measure (GNI per capita) with three social measures (life expectancy, expected years of schooling, and average years of schooling).

Barriers to gender equality

Urban areas often have higher gender equity than rural areas. Overall, conditions are improving but obstacles to gender equity for women still exist: • Cultural barriers often inhibit participation in the economy. • Lack of educational opportunities can reduce employment options. • Limited access to loans and other resources makes starting or expanding a business difficult.

Glass Ceiling

Another trend reflecting employment discrimination toward women is that women rarely obtain upper-level jobs in companies.

Increased opportunities for women

Women have made progress toward gender equality despite the significant obstacles they face. Govern ments of many countries, transnational corporations, non-governmental organizations, and international organizations, such as the United Nations, have aided the efforts to reduce gender inequality.

Non-governmental Organizations

Empower women to find jobs outside the home.

Microloans / Microcredit

To provide loans often to women to start or expand a business.

How the IR created new neighborhoods for middle and working classes

Due to industrialization the middle class populatoin grew tremendously so the Industrial Revolution created new neighborhods for middle class by building a sense of unity in the new class difficult and made new neighborhoods for the working class as well by forcing them to live in less-desirable urban neighvorhoods located outside the central business districts in crammed places right beside factories for easy access to factories and this led them to form labor unions, which gave them power to push for higher wages and better working conditions.

Rostow's Stages of Economic Growth

Is an economic model that focuses on how people live. Suggested that different inputs and levels of investment were required to allow countries to move from one stage to the next.

Stage: Traditional

• Depends upon primary sector activities (farming, fishing, hunting) for subsistence • Uses limited technology • Carries out local or regional trading • Enjoys limited socioeconomic mobility

Stage: Preconditions for Takeoff

• Improves infrastructure (roads,electrical grid, water systems, etc.) • Improves farming techniques and shifts toward commercial agriculture • Exports agricultural and raw materials (international trade) • Diffuses technology more widely • Starts individual socioeconomic mobility

Stage: Take-off

• Develops major technological innovations • Starts industrialization and primary sector begins to shrink • Spreads entrepreneurial mentality • Begins to urbanize • Initiates self-sustaining growth

Stage: Drive to Maturity

• Creates new industries while strengthening existing ones. • Improves energy, transportation, and communication systems. • Sees economic growth greater than population growth • Invests in social infrastructure (schools,hospitals, etc.).

Stage: High Mass Consumption

• Spends money on nonessential goods (consumerism) • Purchases of high-order goods become common • Desires to create a more egalitarian society • Supports a strong teriary sector

Criticisms of Rostow's Model

Limited Examples | Role of Exploitation | Bias Toward Progress | Lack of Variation | Lack of Sustainability | Need for Poorer Countries | Narrow Focus

World System Theory (Core-Periphery Model)

On a global scale, decisions about where to locate factories, offices, and other businesses shape the wealth and power of countries.

Dependency Model

Countries do not exist in isolation but are part of an intertwined world system in which all countries are dependent on each other.

World System Theory - Core

• Includes the economically advantaged countries of the world • Includes the headquarters of most large multinational companies and banks • Focuses on higher-skill, capital-intensive production • Promotes capital accumulation • Dominates semiperiphery and periphery economically and politically • Locates factories and service centers in semiperiphery and periphery countries •Benefits greatly from international trade

World System Theory - Semi Periphery

"• Includes most middle-income countries, sometimes called emerging economies. • Provides the core with manufactured goods and services that the core formerly provided for itself. • Shares characteristics of both core and periphery

World System Theory - Periphery

• Includes the least-developed countries • Maintains many jobs in low-skill, labor-intensive production and extraction • Provides the core and semiperiphery with inexpensive raw materials and labor • Receives jobs but few profits from manufacturing • Attracts jobs by having weak laws protecting workers and the environment

Compare Rostow (Stages of Economic Growth) and Wallerstein's World System Theory) Models

"Unlike Rostow's model, Wallerstein's model does not suggest that all countries can reach the highest level of development, nor does it explain how countries can improve their position. In contrast, it indicates that the world system will always include a combination of types of countries. But countries can change categories, moving in or out of the core.

Criticisms of Wallerstein's (World System Theory) Model

Little Emphasis on Culture | Emphasis on Industry | Lack of Explanation | Limited Roles

Commodities

raw material such as coffee, cocoa, and oil, that have not undergone any processing.

Commodity Dependence

When more than 60 percent of a countries exports are raw materials.

Trade

occurs when one party desires a good or service that it does not have or cannot produce and another party has the desired good or service with which it is willing to part.

Barter

a system of exchange in which no money changes hands. "This is most common between individuals. (In the book-turned-movie To Kill a Mockingbird, the main character, a lawyer, provides legal services to a poor farmer in exchange for bags of food.)

Comparative Advantage

the ability to produce a good or service at a lower cost than others.

Complimentary

When a country has the income, goods, or services that the another country desires, they have

Free Trade

Policies, or laws, that reduced barriers to trade.

Neoliberal Policies

A set of reforms that reduced government regulations and taxation.

Policies decreasing trade

Pg 487 "Factors decreasing Trade"

Government efforts to promote economic growth (5)

Trading Blocs

Groups of countries that agree to a common set of trade rules.

Mercosur

A trading bloc that includes several South American countries.

World Trade Organization (WTO)

a global organization. It was created in 1995 to monitor the rules of international trade by providing a forum for negotiating trade deals, settling disputes between its members, supporting the needs of developing countries, and helping companies follow similar international trade policies.

Impacts of economic interdependence

interdependency has strengthened the links among the countries' economies. Growth in one country can result in new economic opportunities in other countries.

International Monetary Fund (IMF)

Created in 1945 to aid countries caught in need of financial assistance. Recognizing how quickly a financial crisis can lead to social and political instability, the IMF promotes economic stability for countries dealing with financial struggles.

Outsourcing

contracting work to noncompany employees or other companies. "Ihe contracted company might be less expensive because it specializes in the work and does it more efficiently.

Offshoring

Companies will locate services or manufacturing in other countries if the costs of doing business are lower and worth the risk of moving some operations overseas

New International Division of Labor

A changed system of employment in the various economic sectors worldwided ( In core countries, people design and develop products for the global market. Tertiary, quaternary, and quinary jobs have increased in the core. • In semiperiphery countries, people often manufacture goods marketed in core countries. Consequently, employment in the secondary sector has increased. Employment in the primary sector has declined. • Periphery countries, such as Bangladesh, Angola, and Papua New Guinea, have large primary sectors and export minerals and resources to core and semi-periphery countries for further processing and consumption. )

Basic vs. Non-Basic Economic Activity

These types of activities generate new wealth for a region and these activities are usually exported from the region. While these activities do not generate new wealth for a region rather these activities are consumed within the region.

Transnational/Multinational Corporations

Businesses that operate in multiple countries

Export Processing Zones (EPZ)

Offer foreign corporations major tax savings, inexpensive labor, fewer environmental regulations, well-serviced industrial sites, and proximity to good transportation networks that allow for easy delivery of raw material and shipping of finished products. EPZs are often near international airports, seaports, or land borders from where the products can be exported easily.

Special Economic Zones (SEZ)

Special Economic Zones that are in China

Maquiladoras

Special Economic Zones that are in Mexico

Free-trade Zones

These are locations where a foreign company can store, warehouse, transfer, or process without additional taxation or duties if goods are exported

Postindustrial Economy

One that no longer employs large numbers of people in factories but has people who provide services and process information.

Assembly Line

In which an item is moved from worker to worker, with each repeatedly performing the same task.