Industry and Development Study Guide APHG

I. Industry: Geographic Factors

• Site Factors:
  • Physical features related to cost of production and transport.
• Situation Factors:
  • Features of surrounding areas that influence production and transport costs.
• Basic Industry:
  • Central focus of a region’s economy (e.g., Detroit for cars, LA for film).
• Non-basic Industry:
  • Businesses that support basic industry operations.
• Multiplier Effect:
  • The interdependence of basic and non-basic industries driving economic growth.

II. Fixed and Variable Costs

• Fixed Costs:
  • Costs that do not change over time (e.g., rent).
• Variable Costs:
  • Costs that fluctuate based on usage (e.g., energy bills).

III. Transportation Systems

• Modern manufacturing seeks to reduce time and distance obstacles.
• Cost implications of distance and weight:
  • Greater distance and weight lead to increased costs.
• Transportation Modes:
  • Trucks: High mobility but high fuel costs and wear.
  • Trains: Efficient for long distances; dependent on break-of-bulk points.
  • Airplanes: Fast and flexible but expensive and limited in weight.
  • Pipelines: Ideal for fluids but not versatile for other goods.
  • Ships: Low cost but slow, requiring ports.

IV. Location of Industry

• Agglomeration:
  • Clustering of similar businesses enhancing labor efficiency (e.g., industries in LA, Detroit).
• Cumulative Causation:
  • Growth driven by agglomeration leading to economic buildup.
• Deglomeration:
  • Market oversaturation with similar businesses leading to decline.

V. Weber’s Least Cost Theory

• Factory location influenced by:
  1. Raw Materials Cost: Minimized for cost efficiency.
  2. Labor Cost: Tend to be higher; impacts location preference.
  3. Transportation Cost: Most controllable factor for location decisions.
• Weight Gaining: Finished product is heavier than raw materials (e.g., automobiles); positioned closer to consumers.
• Weight Reducing: Raw materials are heavier than final goods (e.g., potato chips); factories near resources.

VI. Foreign Production of Goods

• Outsourcing:
  • Movement of jobs from developed nations to developing ones for cost efficiency.
  • Example: Maquiladoras in Mexico producing for US markets post-NAFTA.
• Footloose Industries:
  • Industries without a strong locational preference (e.g., high-tech, textiles).

VII. Main Global Industrial Zones

1. North America:
   • Ontario (Toronto, Ottawa, Montreal)
   • Northeastern USA (Boston-DC)
   • Eastern/Western Great Lakes (Rust Belt)
   • Southeastern I-85 (NC, SC, GA)
   • Seattle-Portland; SF Bay Region; LA/SD
   • Northern Mexico and Mexico City
2. Russia and Ukraine
3. Western Europe: (Britain, France, Germany)
4. China:
   • Export processing zones and special economic zones (e.g., Beijing, Shanghai, Hong Kong).
5. Japan:
   • Kanto Plain (Osaka, Kyoto, Tokyo)
6. Asian Tigers:
   • South Korea, Taiwan, Singapore, Hong Kong

VIII. Economic Development: Measurements and Theories

• Measures of Development:
  • Gross Domestic Product (GDP)
  • Per Capita Income
  • Life Expectancy
  • Education Levels
  • Human Development Index (HDI): A composite index measuring health, education, and income.
  • Gender Development Index (GDI): Measures gender disparities in development.

IX. Types of Jobs: Economic Sectors

• Primary Sector:
  • Involves extraction and harvesting of resources (e.g., farming, fishing, mining).
• Secondary Sector:
  • Processing of raw materials into finished goods (e.g., manufacturing).
• Tertiary Sector:
  • Service-based activities (e.g., sales, education, healthcare).
• Quaternary Sector:
  • Knowledge-based activities (e.g., tech development, finance, research).
• Quinary Sector:
  • Management and policy-making, overseeing other sectors (e.g., executives).

X. Theories of Economic Development

A. Immanuel Wallerstein’s World Systems Theory

• Core, Semi-Periphery, and Periphery Model:
  1. Core:
  • Wealthy nations (e.g., USA, Western Europe).
  1. Semi-Periphery:
  • Developing nations (e.g., China, India, Latin America).
  1. Periphery:
  • Least developed countries (e.g., regions in Africa).
• Exploitative relationships among these levels are highlighted.

B. Walt Rostow’s Ladder of Development

• Societies progress through five stages:
  1. Traditional Society:
  • Dominated by primary sector jobs (e.g., Niger).
  1. Preconditions for Takeoff:
  • Transitional phase, early industrialization (e.g., Nigeria).
  1. Takeoff:
  • Rapid industrial growth; primary to secondary sector shift (e.g., China).
  1. Drive to Maturity:
  • Advanced tech leads to secondary sector decline and growth in tertiary (e.g., Russia).
  1. Mass Consumption:
  • Dominance of TQQ sectors; consumer economy (e.g., USA, Japan).

XI. Global Resource Land Use

• Oil:
  • Major energy source; controlled by OPEC (Organization of Petroleum Exporting Countries).
• Natural Gas:
  • Used for heating; main producers include Russia, Canada, USA.
• Coal:
  • Cheap but highly polluting; primarily produced by China, India, USA.
• Forestry and Timber:
  • Key building resource; main producers include Canada, Russia, USA.
• Fishing:
  • Vital food resource; major producers are China, Indonesia, India.
• Alternative Energy Sources:
  • Hydroelectric (China, Canada), Solar (China, USA), Wind (China, USA), Biomass, and Geothermal (USA).

XII. Globalization

• Definition emerged in the late 1990s; affects economic, political, and cultural spheres.
• Economic Globalization:
  • Outsourcing and offshoring enabled by technology.
• Political Globalization:
  • Rise of supranationalism and multilateral organizations.
• Cultural Globalization:
  • Influences of mass migration and the internet on societies.
• Costs of Globalization:
  • Environmental degradation, nationalism, job losses in wealthy nations.
• Benefits of Globalization:
  • Increased wealth, literacy, gender rights, democracy in developing states.