Book work

KEY ISSUE

Why Are Industries Changing Locations?

• Emerging Industrial Regions

• Industrial Change in Developed Countries

• Skilled or Unskilled Labor?

• Recycling and Remanufacturing

LEARNING OUTCOME 11.4.1

Explain reasons for the emergence of new concentrations of industries.

• Global Industrial Movement

  • Industry is shifting locations worldwide.

  • Site Factors: Labor costs have driven industrial growth in new regions internationally and locally within developed areas.

  • Situation Factors: Proximity to expanding markets is critical for new industrial regions.

Emerging Industrial Regions

• Historical Context

  • In 1970, nearly one-half of world industry was in Europe, and one-third was in North America.

  • As of now (2010), both Europe and North America account for only one-fourth of world industry.

  • Other regions increased their share from one-sixth in 1970 to half in 2010.

OUTSOURCING

• Role of Transnational Corporations (TNCs)

  • TNCs use low-cost labor in developing countries for competitive edge in the global economy.

  • Production processes are reviewed to determine which tasks low-paid, low-skilled workers can perform.

  • Despite higher transportation costs, it is often profitable to shift work to developing countries due to lower wages.

• New International Division of Labor

  • Selective transfer of jobs to developing nations is known as the new international division of labor.

  • Operations that require skilled workers typically remain in developed factories.

• Outsourcing and Vertical Integration

  • Outsourcing involves delegating production responsibilities to independent suppliers, which contrasts with vertical integration, where a single company controls all production phases.

  • Traditional mass production favored vertical integration; examples include car manufacturers.

  • Today, many parts manufacturing is outsourced for cost and quality benefits.

• Case Study: Foxconn

  • World's largest electronics contractor, providing components for companies like Apple and Intel.

  • Employs approximately 1 million workers in China, with conditions often criticized for long hours and low pay.

MEXICO AND NAFTA

• Manufacturing Growth in Mexico

  • NAFTA (1994) eliminated barriers for trade among the U.S., Mexico, and Canada, increasing manufacturing in Mexico.

  • Mexico is viewed as the nearest low-wage country to the U.S., combining low-cost labor with market proximity.

  • Automotive manufacturing growth has been primarily in Mexico through maquiladoras - tax-advantaged plants assembling materials imported from the U.S.

• Labor Concerns

  • Concerns raised in the U.S. and Canada about jobs relocating to Mexico for cheaper labor rates, impacting labor-intensive industries.

  • Environmentalists worry about lax pollution regulations in Mexico by comparison to U.S. and Canada.

• Competitive Factors

  • Despite higher wages than China, Mexico competes well due to lower shipping costs to the U.S.

BRIC COUNTRIES

• Growth Potential

  • BRIC: Brazil, Russia, India, and China are expected to be key players in global manufacturing growth.

  • They cover one-fourth of the world’s land area, housing 3 billion people but only contributing one-sixth of world GDP.

  • Projections indicate China will overtake the U.S. as the largest economy around 2020, followed by India around 2050.

• Labor Forces

  • China and India have the largest labor pools, while Brazil and Russia possess significant industrial resources.

  • Although there is potential for collaboration among the BRIC countries, historical animosities may limit economic interaction.

INDUSTRIAL CHANGE IN DEVELOPED COUNTRIES

LEARNING OUTCOME 11.4.2

Explain reasons for changing distribution of industry in developed regions.

• Shift from Traditional Centers

  • Industries are moving from historic centers in northwestern Europe and northeastern U.S.

  • In the U.S., manufacturing has seen a shift from the Northeast to the South and the West, with government policies aiding relocation.

INTRAREGIONAL SHIFTS IN NORTH AMERICA

• Job Losses and Gains

  • The U.S. experienced a loss of 2.3 million manufacturing jobs from 1950 to 2015, with a significant decline in the Northeast and Great Lakes regions.

  • In contrast, the South gained 1.3 million and the West saw an increase of 1.1 million jobs.

• Historical Industrial Development in the South

  • Industrialization in the South lagged initially due to a lack of infrastructure post-Civil War.

  • Government initiatives like the Tennessee Valley Authority helped promote development by improving access to resources like electricity.

• Emergence of Auto Alley

  • The automotive industry has migrated towards the South along Interstate corridors 65 and 75.

• Industry Distribution Influences

  • Right-to-work laws in 25 U.S. states reduce union power and attract manufacturers seeking lower labor costs and less unionized environments.

INTRAREGIONAL SHIFTS IN EUROPE

• Manufacturing Diffusion

  • There is a trend of industry moving from traditional centers in northwestern Europe towards Southern and Eastern Europe, aided by European Union policies.

• EU Structural Funds

  • These funds support convergence regions, competitive regions, and territorial cooperation regions to promote economic balance across Europe.

• Spain's Industrial Growth

  • Spain emerged as a significant manufacturing hub after joining the European Union in 1986, especially in the automotive sector.

• Central European Industrial Rise

  • Post-communist nations like Poland, Czechia, Hungary, and Slovakia have attracted investment due to lower labor costs and proximity to Western markets.

SKILLED OR UNSKILLED LABOR?

LEARNING OUTCOME 11.4.3

Understand the attraction of locations with skilled labor and those with unskilled labor.

• Diverging Labor Needs

  • Industries are faced with choosing between low-skilled, cost-effective labor and high-skilled, more expensive labor.

• Importance of Skilled Labor

  • Factories increasingly seek skilled workers essential for modern production techniques and market demands.

• Production Approaches

  • Fordist Production: Characterized by repetitive tasks assigned to workers (e.g., traditional mass production).

  • Post-Fordist Production: Emphasizes lean or flexible production methods, where workers are organized into teams and encouraged to resolve issues collaboratively.

RECYCLING AND REMANUFACTURING

LEARNING OUTCOME 11.4.4

Understand the concepts of recycling and remanufacturing.

• Recycling Defined

  • Recycling involves separating, collecting, processing, marketing, and reusing unwanted materials.

• Remanufacturing Defined

  • Remanufacturing rebuilds products to original specifications using reused, repaired, or new parts to promote sustainable production.

Recycling Trends

• Growth in Recycling Rates

  • U.S. recycling rates increased from 7% in 1970 to 34% in 2013, leading to significant reductions in landfill waste.

  • Various materials have differing recycling rates, e.g., 50% of paper products are recycled compared to 10% for others.

Collection Methods

• Types of Recycling Collection

  • Curbside Programs: Collect materials directly from households.

  • Drop-off Centers: Allow citizens to deliver recyclables.

  • Buy-back Centers: Purchase materials from the public.

  • Deposit Programs: Encourage recycling through monetary incentives.

• Market Commodities

  • Recyclables are sorted and can be traded like commodities with fluctuating market prices.

Remanufacturing Processes

• Industrial Use of Recycled Materials

  • Major sectors using recycled materials include paper mills, steel mills, and plastics.

  • Remanufactured household items include papers, aluminum cans, and plastic containers.

• Example: The Aral Sea

  • The Aral Sea's demise serves as a stark representation of environmental neglect and the need for sustainable practices in manufacturing.

CHECK-IN

KEY ISSUE 4

Why Are Industries Changing Locations?

• Industries are changing locations due to various economic factors including labor costs, market proximity, government policies, and environmental considerations.