Unit 6: Industrial and Economic Development

Assembly line: Created by Henry Ford, every worker performs a specialized task
-Increased production, lowered costs, and less knowledge was needed
Post-Fordism: Machines replace labor

Primary: extracting resources
Examples: Mining, farming, fishing, forestry
Secondary: Processing resources
Examples: manufacturing, building
Tertiary: Providing services
Examples: Marketing, banking, design, hospitality, sales
Quaternary: Knowledge-based work
Examples: Finance, education, software development
Quinary: Highest levels of decision makers
Examples: CEOs, officials in government
Impacts of changes to economic sectors: Outsourcing, primary sector employees struggle since their jobs pay less

Predict where business will locate based on transportation costs, labor costs, and agglomeration efforts
Triangle with market, site 1, and site 2 being angles, and production in the center
Shows why some locations are more desirable than others
Have to consider weight, distance, and proximity to market and transportation

Agglomeration: Grouping economic activities that benefit each other
Example: Delta located in ATL
Break of bulk point: Cargo is shifted from one form of transportation to another
-Can help economy because it can create jobs
Example: Transporting iron from Michigan to a port in Indiana and then building a steel mill in Indiana so the iron can go straight from the ship to the mill
Growth poles: Strong economic growth in a specific area that stimulates economy
Pulls unique group of skilled people
Example: Silicon Valley which is a technology hub and hosts many tech companies

Created by Immanuel Wallerstein and is a dependency model (all countries depend on each other)
Peripheral countries: Less developed, depend on core countries
Examples: Afghanistan, Yemen, Sub-Saharan Africa
Semi-peripheral countries: Higher level of development, depend on both
Examples: Argentina, Brazil, Mexico, Latin America
Core countries: Highly industrialized
Examples: US, Canada, Japan, Europe

Created by Walt Rostow and is a stages of economic growth model
Traditional society: Farming, fishing, hunting
Pre-condition for take-off: Farming techniques improve, infrastructure built, technology diffuses
Take-off: Urbanization, technology, self-sustaining growth
Drive to maturity: Primary sector shrinks, infrastructure improves, schools, libraries
High mass consumption: Strong tertiary sector, consumerism, population growth
Criticisms: Doesn’t tell how countries can change categories, doesn’t show cultural influence
-Some countries can’t develop because lack of resources, unable to exploit others, and high level of mass consumption is unsustainable

GDP: Sum of all goods and services made in country
GDP per capita: Sum of all goods and services made in country per person
GNP: Sum of all goods and services no matter where they’re made
GNI: All income earned in a country no matter where or how it’s made
PPP (Purchasing power party): Takes cost of living into account
Sectoral distribution: Percentage of workforce in each economic sector
HDI: Combines economic and social measures to measure development, specifically life expectancy and education level, GNI
GII: Takes into account reproductive health, indices of empowerment, and labor-market participation
Sustainable development goals: Created by the UN to guide the world towards development and growth

Neoliberalism: Free global markets are the best way to run an economy, free trade
-Hard to make happen because some countries can’t/won’t engage with each other
Globalism: Increasing interconnectedness of the world
-Positives: IMF offers loans to LDCs, microlending, international division of labor (countries provide what they know best to make labor markets efficient), and increased connectivity of the world
-Negatives: Loss of sovereignty, unsustainable resource use, LDC dependence on MDC for resources

Comparative advantage: One economy can produce goods with lower opportunity costs
Example: Country A produces 1,000 cars and 500 computers, and country B produces 500 cars and 1,000 computers. Country A has a comparative advantage in cars while B has the other, thus making them able to work together to increase efficiency.
Complementarity: Countries both have something the other wants
Outsourcing: Company uses external sources (mainly people from other countries) to work for them

NAFTA/USMCA: Trade deal between US, Mexico, and Canada, eliminates tariffs
MERCOSUR: Trade bloc of South American countries including Argentina, Bolivia, Brazil, Paraguay, Uruguay, and Venezuela that encourages economic development
EU: Created a common market in Europe to encourage free flow between countries
WTO: Intergovernmental organization that regulates international trade by trade regulation
OPEC: Tries to regulate oil markets
Trans-Pacific Partnership: Trade deal that joins Canada, Mexico, Chile, Peru, and other Asian-Pacific countries

Special economic zones: Rules like taxes and environmental standards are relaxed to increase development
Example: Shenzhen China’s special economic zone which attracts foreign investment
Export processing zones: Export laws are relaxed to encourage trade
Example: Chittagong EPZ in Bangladesh where lots of businesses import materials