Chapter 12 Review: Business Services, Central Place Theory, and Urbanization

Chapter 12: Vocabulary and Core Concepts

• Basic Business: A business that sells its products or services primarily to consumers who live outside the settlement.
• Business Service: A service that primarily meets the needs of other businesses, including professional, financial, and transportation services.
• Central Place: A market center for the exchange of services by people attracted from the surrounding area.
• Central Place Theory: A theory that explains the distribution of services based on the fact that settlements serve as centers of market areas for services; larger settlements are fewer and farther apart than smaller settlements and provide services for a larger number of people who are willing to travel farther.
• Clustered Rural Settlement: A rural settlement in which the houses and farm buildings of each family are situated close to each other, with fields surrounding the settlement.
• Consumer Service: A service that primarily meets the needs of individual consumers, including retail, education, health, and leisure services.
• Dispersed Rural Settlement: A rural settlement pattern characterized by isolated farms rather than contiguous villages.
• Economic Base: A community's collection of basic businesses.
• Enclosure Movement: The process of consolidating small landholdings into a smaller number of larger farms in England during the eighteenth century.
• Food Desert: An area in a developed country where healthy food is difficult to obtain.
• Global City: A major center for the provision of services in the global economy.
• Gravity Model: A model which holds that the potential use of a service at a particular location is directly related to the number of people in a location and inversely related to the distance people must travel to reach the service.
• Market Area / Hinterland: The area surrounding a central place from which customers are attracted to use the place's goods and services.
• Megacity: An urban area with a total population in excess of 10 million people.
• Metacity: A large cluster of cities with a total population in excess of 20 million people.
• Non-basic Business: A business that sells its products or services primarily to consumers who live in the same settlement.
• Periodic Market: A collection of individual vendors who come together to offer goods and services in a location on specified days.
• Primate City: The largest settlement in a country, if it has more than twice as many people as the second-ranking settlement.
• Primate City Rule: A pattern of settlements in a country such that the largest settlement has more than twice as many people as the second-ranking settlement.
• Public Service: A service offered by the government to provide security and protection for citizens and businesses.
• Range (of a service): The maximum distance people are willing to travel to use a service.
• Rank-size Rule: A pattern of settlements in a country such that the $n^{th}$ largest settlement is $\frac{1}{n}$ the population of the largest settlement.
• Service: Any activity that fulfills a human want or need and returns money to those who provide it.
• Settlement: A permanent collection of buildings and inhabitants.
• Threshold: The minimum number of people needed to support the service.
• Urbanization: An increase in the percentage of the number of people living in urban settlements.

12.1 The Service Economy and Urban Settlements

• Economics of Urban vs. Rural: Unlike rural economies, which are fundamentally geared toward agriculture, urban economies are geared toward the service economy. This involves exchanging money for an activity that fulfills a human need or want.
• Categorization of Services: The service economy is subdivided into three primary categories:     * Consumer Services: Comprise approximately $\frac{1}{2}$ of all jobs in the USA.         * Retail (shops and stores).         * Education.         * Health (medical services).         * Leisure (recreation and entertainment).     * Business Services: Comprise approximately $\frac{1}{4}$ of all jobs in the USA.         * Professional (law, engineering, etc.).         * Financial (banking, insurance, real estate).         * Information.         * Transportation.     * Public Services: Comprise approximately $8\%$ of US jobs. These are heavily tilted towards local governments.         * Security and protection for citizens and businesses.         * Educators.         * Government officials.
• Tertiary Sector: Services are part of the tertiary economy. This is distinct from:     * Primary Sector: Agriculture and mining.     * Secondary Sector: Manufacturing and construction.
• Global Distribution:     * Services provide a large proportion of the economy in developed countries.     * Services are an increasingly large part of developing countries and the BRICS nations (Brazil, Russia, India, China, and South Africa), which are positioned between developed and developing economies.     * Services are not spread evenly across populations; they are centered in advanced economies and settlements.
• Settlement Footprint: Settlements cover only $1\%$ of the world\u2019s surface but house the overwhelming majority of the population.
• US Trends (Last 40 Years):     * General proportions of economy types have remained relatively stable.     * Growth: Consumer services, especially recreation, entertainment, health, and education, have grown more rapidly.     * Decline: Finance and transportation services have started slowly declining in recent decades.

12.2 Central Place Theory and Market Dynamics

• Purpose: Explains how profitable locations for services can be identified and why services are located where they are.
• Development: First developed in the 1930s in Germany and honed in the 1950s in the USA.
• Central Places and Competitive Markets: Central places function as sites for the exchange of goods/services by attracting people from surrounding areas. In capitalist economies, this creates competition between businesses attempting to win over local consumers, resulting in a regular pattern of settlements.
• Market Area (Hinterland): The surrounding area from which people come to access a central place. People typically choose the closest market area for convenience.
• The Hexagon Model: Geographers represent market areas as hexagons to map overlapping territories without gaps or overlaps.
• Determining Service Viability:     * Range: The limit at which a person will travel to obtain a service. This is usually measured in time rather than actual distance. Range varies based on the service; people travel further for specialized needs than for daily needs.     * Threshold: The minimum number of people required to sustain a service.     * Demographic Factors: Potential consumers vary by demographics. For example, the target demographics for a chiropractor differ significantly from those of a movie theater.
• Settlement Hierarchy Rules:     * Rank-size Rule: Settlements are ranked from largest to smallest. The population of the $n^{th}$ largest city is $\frac{1}{n}$ the size of the largest city.         * The $2^{nd}$ largest city is $\frac{1}{2}$ the size of the largest.         * The $4^{th}$ largest city is $\frac{1}{4}$ the size of the largest.         * The US and many other countries follow this rule as a useful guide.     * Primate City Rule: A system dominated by one large city that is more than twice as many people as the next largest city.
• Distribution Geography: According to Central Place Theory, there should be a relatively even distribution of services in advanced economies, unless interrupted by geographic features (e.g., mountains or rivers).
• Four Levels of Market Areas: Hamlet, village, town, and city. These overlap in mapped hexagon shapes.
• The Gravity Model: Borrowed from physics, this model predicts the optimal location for a service based on two behaviors:     * Optimal location is directly related to the number of people (more people = more customers).     * Optimal location is inversely related to distance (the farther a service is, the fewer people will use it).
• Accessibility Issues:     * Food Deserts: Areas with limited access to nutritious or affordable food.     * Periodic Markets: Services that are not permanent (e.g., farmer's markets) and only provide services on certain days or times of the year.

12.3 Global Cities and Global Service Distribution

• Global Cities: These cities play an outsized role in the global economy and offer the highest number of services. They are typically located in the core parts of the world economy.     * The two largest global cities are London and New York City.
• Characteristics of Global Cities:     1. Financial institutions.     2. Large international corporations.     3. Professional services (lawyers, bankers, etc.).     4. National capital status (often, though not always).     5. High concentration of cultural attractions.
• Categorization of Global Cities: Cities are categorized into Alpha (including Alpha+/++ or Alpha -), Beta, and Gamma based on:     1. Economic factors.     2. Political factors.     3. Communications ability.     4. Transportation.     5. Cultural factors.     6. Infrastructure.
• Business Services in Developing Countries: Many developing economies focus on specialized business services to compensate for lack of land or resources for primary/secondary activities.     * Financial Service Centers: Provide tax havens or discreet banking. Often located in microstates, former colonies, islands, or dependencies of developed countries.     * Back-office Functions (Outsourcing): Includes call centers, payroll, transcription, and clerical tasks.         * Attraction factors: Low wages and English proficiency.         * Locations: Typically places with a colonial legacy tied to Britain or the US.
• Economic Specialization: Cities can be categorized by their basic businesses and nonbasic businesses. Geographers study these to understand service availability.
• Talent Clustering: The distribution of businesses is affected by the availability of educated/talented workers, who tend to cluster in large cities.

12.4 Rural and Urban Settlement Patterns

• Rural Distributions:     * Types: Clustered or Dispersed.     * Patterns: Circular or Linear.     * Factors affecting distribution: Population levels, gendered divisions of labor, and technology.
• Urbanization History:     * Services have been tied to permanent settlements since their inception.     * Earliest Settlements: Established in the Fertile Crescent approximately $10,000$ years ago.     * Pre-Modern Era: Throughout the Ancient, Medieval, and Early Modern periods, urban spaces represented a small percentage of the total population.
• The Urbanization Process: Defined by both the increase in absolute numbers of urban dwellers and the increase in the percentage of people living in cities.
• Separation of Urban and Rural (3 Factors):     1. Large size.     2. High population density.     3. Social heterogeneity.
• Urbanization Statistics:     * $1800$: $3\%$ of the world population was urban.     * $1900$: $14\%$ of the world population was urban.     * $2000$: $40\%$ of the world population was urban.     * 2008: The year urban populations officially surpassed rural populations.     * Today: Approximately $55\%$ of the world lives in urban areas.
• Massive Urban Structures: Continued urbanization has led to:     * Megacities.     * Metacities.     * Megalopolises.
• Global Shift: Historically, the largest cities were in Western Europe and the US. Those cities are now growing slowly or shrinking due to falling birth rates. Cities in the developing world are becoming significantly larger.

Questions & Discussion (Practice FRQ)

• A. Describe the concept of a primate city.
• B. Describe ONE similarity and ONE difference between primate cities and megacities.
• C. Describe ONE way in which primate cities are important within their countries.
• D. Explain ONE reason why the United States does not have a primate city.
• E. Explain why having a primate city can negatively affect the economic development of a country.
• F. Explain why primate cities may not comply with the rank-size rule.