Development & Industry Notes

Development & Industry Notes

Development vs Underdevelopment

• What is the best Country in the World

  • Top Responses

    • USA

    • Japan

    • Germany

    • South Korea

    • Canada

    • China

    • New Zealand

  • There is not a single best country because there are multiple ways to be a number one country

    • ex.) Money, Education, Life Expectancy, Gender Equality

• Development: Refers to the extent to which human/natural resources in an area/country are brought into full productive use.

• Underdevelopment: Reflects the possibility or desirability of applying additional capital, labor, or technology to the resource base for improving the population's material well-being.

Classification of Countries

• Brandt Line

  • Developed: Often located in the "north" (Brandt Report), mostly in temperate or "snow belt" zones.

    • Big Exception: Australia, which, while geographically situated in the southern hemisphere, exhibits core country characteristics such as a strong economy and high living standards, it had the ability to become a MDC due to it previously being owned by Britain

  • Less Developed: Typically found in the "south", encompassing tropical latitudes and arid zones.

  • Theory Of Development (1 of the many)

    • Western Europe had the advantage of being able to produce lots of food on big farms due to having good technology from being able to be the first to Industrialize due to various reasons

    • Advancements tend to diffuse East and West because the climates don’t change as much as going North and South—>more likely the people will travel East and West than North and South

    • Agirculture mainly diffused from Western Europe due to the proximity between countries—>compettition becuase people could try to steal and innovate others technologies

    • Western Europe has a good set of climates—>animals to help out with agiruclture (such as Horses) while in Africa there are not many Animals—>reliance on Human Labor which is a major set back, South America is slightly more developed than Africa one of the reasons being they have Alpaccas

• The Acrynym NIC refers to Newly Industrializaed Countries: which are inbetween MDC’s and LDC’s in Development—>Semi-Perphery

• An Alliance of NICs called Brics (Brazil, Russia, India, China, South Africa) have made an economic alliance to get out of NIC Range and become MDCs

  • they do this through trade and geopotics

  • ex.) Trading with eachother for resources instead of MDCs like the US

  • ex.) India has stayed silent on the matter on Russia’s Invasion on Ukraine

Economic Indicators of Development

• GDP=The total value of all goods and serices produced within a country’s borders over a specific period of time

  • US is $27.36 Trillion

  • Problem: There could be 2 people in one country—>1 Million GDP while in another country 10 Million people in one country—>2 Million GDP (then the 2 person country is wealthier)

• GDP Per Capita=GDP divided by the size of the population

  • US is $81,000

  • China is $12,000

  • Higher GDP Per Capita typically—>more Democracies

    • some exceptions are Sauida Arabia and Middle Eastern Countries who sell alot of oil but are Authortarian

• People tend to belive (perception) based on data that Higher HDI—>less corruption

• GDP Per Capita/PPP

  • not an actual indicator you would write onan FRQ but it is the concept of conversion that you need to know

    • How far does money go within a country

    • Some areas you will go more and some will go less

• Another Economic Indicator is the people’s jobs because the higher level jobs the more money you will generate

Types of Economic Sectors

1. Primary Sector: Involves direct extraction or harvesting of resources ex.) agriculture, mining

2. Secondary Sector: Focuses on transforming raw materials into usable products, adding value

   ex.) manufacturing

3. Tertiary Sector: Connects primary and secondary sectors to consumers & businesses through selling goods or performing services

   ex.) retail, services).

• Tertiary sector includes both retail and business services.

• 4.) Quaternary Sector: Involves highly skilled, research-based services ex.) management, research).

• 5,) Quinary Sector: involves high-level decision-making and services that focus on the creation of new knowledge and innovation, such as public administration, education, and healthcare

  ex.) CEO of the Company

• for most of history, people were in the Primaey Sector collecting food—>less demand for other Sectors

• Second Agricultural Revolution—>lower amount people in Primary Sector and more in Secondary

• As the secondary sector develps there becomes mroe people in the Tertiary Sector such as Accountants and Dpctors to deal with nneds of the factories

  • Accountants to deal with the factry workers wages and Doctors to deal with injuries that occur inside of the facotry

• NIC’s are in the stage where there is lots of people in the Secondary Secotr

• Most MDC’s are in Post-Industrialization

  • Less people in Primary Sector

  • Declinging amount of people in Secondary Sector

  • Growing Tertiary Sector

Social Indicators

• Literacy Rates: show development

  • MDC’s have higher Literacy Rates

• Education:

  • Expected years of schooling: This refers to the average number of years of schooling that a child of school-starting age can be expected to receive. 

  • Mean years of schooling: This refers to the average number of years of schooling that people aged 25 or older have receive

    • If a map only showed females with these measures it would be different

      • LDCs by this measure, would be low

      • MDCs by this measure would be high

    • Schools are funded by tax dollars so if you don’t have enough people in higher level sector jobs—>undereducated people—>less funding (endless cycle)

Demographic Indicators

• Demographic Transition Model:

  • shows the develpment of a country

  • when in the Industrial Revoltuion the MDCs were in or going into Stage 2 and LDCs were in Stage 1

  • Life Expectancy: Average age to which individuals in a specific population are expected to live.

  • Infant Mortality Rates: Number of infant deaths per 1,000 live births.

  • Natural Increase Rate (NIR): Difference between birth and death rates.

  • Crude Birth Rate (CBR): Number of live births in a year per 1,000 people.

Rostow’s Model of Development

• A framework outlining the stages of economic development. Included in preparatory reading materials.

• Rostow’s model of development

  • Recipes followed to develop:

    • Traditional society

      • Mostly subsistence agriculture based

      • Agricultural society

      • High investment in defense and religion

    • Pre-conditions for take-off: Initial investment

      • Limited few invest in tech and infrastructure

      • Invest in new tech, better roads, tech, irrigation, dams

    • Take-off: initial success

      • Limited number of industries become successful and competitive globally. Mostly textiles & food production

      • Remainder of economy is still traditional 

      • Textiles: first industry to really boom

    • Drive to maturity: Technology diffuses

      • Technology expands to many other businesses => rapid growth

      • Labor becomes more skilled and education 

      • Using increase of tech to other businesses

      • Moving into “more skilled labor”

      • Highly repetitive = lower skilled jobs

        • Repetitive-ness makes it not challenging

    • Age of mass production (consumption): Shift to consumer good production

      • Economy shifts from heavy industry in steel, energy to consumer goods (cars, fridges)

      • All countries in stage 1-5

  • Examples:

    • South Korea, Singapore, Hong Kong, and Taiwan followed Japan’s example and are now MDCs

      • Basically build stuff & sell your exports

  • Instead of producing big items, make smaller, factories can produce the big things

  • It is a recipe, has to be followed in a certain order

  • More of an issue for LDCs because MDCs got there faster

  • Model is based in continual movement, can’t get stuck at C because you cannot go backwards

    • Must continue to sell your goods to someone

  • Based on western europe and anglo american

  • Very often the economies of the LDCs are so reliant on the MDCs buying their goods, that if there is an economic issue in an MDC, it will affect the LDCs

  • Building a few things that are gonna give us the biggest return of our investment

    • Roads, ports, transportation, etc.

Wallerstein’s World Systems Theory (Core-Periphery Model)

• A 3-tier structure analyzing global economic interconnections: core, semi-periphery, and periphery.

• Core Countries: Characterized by strong economies, high GDP per capita; seen as More Developed Countries (MDCs).

• Semi-Periphery: Middle-income, newly industrialized countries providing diverse economic opportunities.

• Periphery: Countries with low levels of economic productivity, income, and standards of living.

Dependency Model

• Over time, MDCs have exploited other populations and regions, securing a continuous source of capital.

  • LDCs are stuck because they have no capital to industrialize making them stuck in a cycle of poverty and dependency, unable to improve their economic conditions and ultimately reliant on aid from more developed countries.

• Wealth transfer from periphery to core continues, affecting development negatively.

• Historical roots in colonialism, slave trade, and imperialism led to current economic dependency models.

Self-Sufficiency Model

• Governments protect emerging industries from international competition through tariffs and subsidies.

• Promote growth across all economic sectors

• Want to sell the goods we manufacture domestically

  • First challenge

    • Can’t compete with giant producer if you are a start up

    • More expensive of lower in quality

    • Government has a choice: how do we convince our citizens to buy domestic cars even though they are of less quality or do we buy foreign cars

      • Will give “government subsidies” which is basically gives money to help the manufacturer get to the same tier as foreign cars

      • Hope it is like training wheels

      •  It is a gift, not a loan

      • The other thing govs. can do is put tariffs on competitors 

        • Punish citizens for buying foreign cars, domestic car gains buyers 

Industrialization

• Process: Transition from handmade goods to machine-made goods, beginning in the 17th/18th centuries in Great Britain.

• Driven by political/economic stability, access to trade and raw materials.

• Initially focused on the textile industry, stimulating demand for raw materials.

Post-Industrial Economy

• Late 20th/21st century: Transition marked by the rise of huge transnational corporations, with a focus on service industries.

Globalization

• Increase in interactions and interdependence among countries, emphasizing trade.

• Raises questions regarding equitable benefits for all parties involved (e.g., China as the "Factory to the World").

Outsourcing

• Involves choosing locations based on proximity to key factors, though transportation developments have made this less critical.

Bulk-Reducing vs. Bulk-Gaining Industries

• Bulk-Reducing: Focus on minimizing weight during production (e.g., raw materials).

• Bulk-Gaining: Industries where the final product is heavier than input materials (e.g., beverages).

• Footloose Industries: Can be located anywhere without resource/transport constraints (e.g., tech industries).

Break of Bulk Point

• Identified as part of Weber’s Least Cost Analysis, where the location of manufacturing is determined by labor, transportation, and agglomeration costs.

Hierarchy of Business Services

• Understanding of urban centers based on size and services offered:

• World City: Major city with global significance.

• Primate City: Settlement that has more than twice the population of the second largest city in the country.

• Rank-Size Rule: The nth largest city is 1/n the population of the largest city, establishing a distribution order.

Service Economy

• Less dependent on energy sources and tied to telecommunications, leading to deindustrialization.

• Outsourcing has potentially negative effects on local economies.