Industrial Revolution and Economic Geography Flashcards

Industrial Revolution

• Began in England around the turn of the 18th century, then spread to Germany, France, and other nearby countries.
• Europe was the first place in the world that became industrialized.
• The United States and some countries in North and South America followed soon after.
• Levels of development vary due to the timing of industrialization; it began ~225 years ago in Europe, but only ~70 years ago in colonized regions.
• Colonized regions were focused on resource extraction and therefore couldn't industrialize until they gained independence.
• Industrialization increased the efficiency of manufacturing and agriculture leading to:
  • Increased urbanization.
  • Increased colonization and imperialism to obtain more resources.

Sectors of the Economy

• Primary Sector: Extraction of raw materials.
  • Examples: mining, ranching, forestry, fishing, farming, oil drilling.
  • Even highly technological extraction industries (e.g., oil drilling) are considered primary.
• Secondary Sector: Processing raw materials into finished goods.
  • Oil refineries convert crude oil into usable products.
  • Diamonds are cleaned and turned into jewelry.
  • Examples: textile manufacture, food processing (canning tomatoes into spaghetti sauce).
• Tertiary Sector: Offering services (intangible goods).
  • Examples: teachers, doctors, transportation (Uber drivers, cargo ship operators from China to Los Angeles).
  • Important: Transportation is a crucial but often overlooked part of the tertiary sector.
• Quaternary Sector: Knowledge-based economy; research and development.
  • Examples: lab researchers, marine biologists.
  • Focus is on advancing knowledge and technology.
• Quinary Sector: Highest levels of decision-making in society and the economy.
  • Examples: government executives, CEOs, school superintendents.
  • Decisions made in this sector impact all other sectors.

Weber's Least Cost Theory

• A model for determining the optimal location of a manufacturing facility based on minimizing transportation costs.
  • M = Market.
  • R = Raw materials.
• Bulk-Reducing Industries: Factory located closer to raw materials to reduce transportation costs.
  • Raw materials are more expensive and/or difficult to transport than the finished product.
  • Examples: copper wiring, steel, timber (logs to cut wood).
• Bulk-Gaining Industries: Factory located closer to the market because finished product is bulkier or more difficult to transport.
  • Finished products gains bulk or becomes difficult to transport after production.
  • Examples: cars, furniture, bottled beverages.
• Agglomeration: Clustering of similar or competing industries in one location.
  • Seen with car dealerships along interstates and fast-food restaurants at intersections.
  • Factories may also cluster near shared material sources.

Hotelling's Location of Interdependence Theory

• Optimal location is the best spot to sell from, once someone claims it, you must position yourself right nest to them.
• Positioning one's business near competitors to negate locational advantage.
  • Example: Ice cream vendors on a beach, car dealerships along an interstate.
  • Competition then shifts to prices, car types, and services.

Measuring Development

• Outdated measures focus solely on money, such as GDP, GNP, and GNI per capita.
  • They don't reflect how wealth is used or distributed.
• The United Nations uses the Human Development Index (HDI).
  • Includes education, health, standard of living, gender equality, and income inequality (Gini coefficient).
  • Education, health, and standard of living should be high.
  • Inequality should be low.
• HDI ranges from 0 to 1, with higher scores indicating better development (e.g., Sweden ~0.97).
• Gender Inequality Index (GII) evaluates women's reproductive health and empowerment.
  • Reproductive health: maternal mortality rate, adolescent fertility rate.
  • Empowerment: women's representation in government and workforce participation.
• Gini Coefficient: Measures income inequality (gross inequality of national income).
  • Compares GNI per capita between men and women.
  • A smaller gap indicates more equality.

Theories of Development

• Wallerstein's World Systems Theory: Core-periphery model (dependency theory).
  • Core benefits from low-cost labor and resources in the semi-periphery and periphery.
  • Core manufactures high-tech goods and provides services that the periphery lacks.
  • Core countries may act to maintain this dependency for their own economic gain.
• Rostow's Stages of Economic Growth: International trade theory with five stages.
  • Traditional Society: subsistence farming.
  • Preconditions for Take-off: agricultural surplus enables diversification.
  • Take-off: industrialization and urbanization (dual economy).
  • Drive to Maturity: diversification and reduced commodity dependence.
  • Age of Mass Consumption: shift to tertiary sector (core).
  • No clear path from stage to stage.

Comparative Advantage

• Definition: Ability of a company or country to produce goods/services at a lower cost than others.
  • Can be achieved through outsourcing, special economic zones, and access to resources/technology.
  • Example: Peru's easier lithium processing gives it an advantage over Bolivia.

Complementarity

• Definition: When two places benefit from trading specific goods or resources.
  • Example: Kazakhstan exports agricultural goods to China; China exports machinery/technology to Kazakhstan.
  • China and Vietnam trading agriculture and livestock.
• Competitive Advantage: Ability to gain the edge by lowering cost more than others.

Outsourcing/Offshoring

• Moving jobs to countries with lower labor costs (lower standards of living, lower education levels, lower-skilled workers).
  • Finished products are then sold in core countries.

Neoliberalism

• The belief that interconnectedness and reduced trade barriers lead to global improvement.
  • Examples: OPEC, EU, USMCA, Mercosur.
  • Opening borders promote free flow of products, development, and economic growth.

Special Economic Zones

• Areas within a country with different rules to attract foreign investment.
  • Lower taxes, fewer labor restrictions.
  • Criticism: Workers may not benefit; benefits primarily go to companies and the host country.
  • China's SEZs spurred economic growth since the 1980s.
• Free Trade Zones: Eliminate tariffs and trade barriers; promote intensive manufacturing and break-of-bulk points (e.g., Singapore).
• Export Processing Zones: All manufactured goods must be exported; prevents competition with local industries and forces goods out of the country.

Other Key Terms/Concepts

• Site and situation factors.
• Break-of-bulk points and containerization.
• Women's role in development (agriculture and industry).
• Microlending: Small loans (e.g., $10-20) primarily for women in rural areas (high payback rate).
• International division of labor: where manufacturing, agriculture, and high/low-skilled work occur.
• Four Asian Tigers: Singapore, Taiwan, South Korea, and Hong Kong.
• BRICS: Brazil, Russia, India, China, South Africa.
• Fordist vs. Post-Fordist production: assembly line vs. automation.
• Economies of scale: Increased production leads to greater profit (enabled by containerization and global supply chains).
• Just-in-time delivery: Efficient planning to minimize waste and maximize profit.
• Sustainable development and ecotourism.
• Sustainable Development Goals: environmental, social, and political goals.