Chapter 18

CHAPTER EIGHTEEN (pg 490-519)

18.1 Process of Industrialization (pg 495-503)

Key words: Industry, raw materials, industrialization, Industrial Revolution, cottage industries

Global Connections

Educating Afghan Girls

What is Industrialization?

• When the interaction of social and economic factors leads to industrial development

• Started with the Industrial Revolution in Britain

The Industrial Revolution

• Series of technological innovations in Britain

• Close proximity to natural resources and waterways for transportation were major factors for its development

Before the Industrial Revolution

• Small-scale, lengthy, manual production

• Landed class who lived off of rental income and agricultural working class

• Slow transportation

• Most production operated by guilds ~ small scale independent trade associations

• Large products created in certain geographical areas, employed large numbers of skilled and unskilled workers

  • Shipyards

• Cottage industry - families working in their homes to create goods in large quantities, distributed in urban areas

  • Textiles, shoes

• All of them were on a local scale, used manual equipment, and relied on physical exertion which limited the amount of goods they could produce

Industrialization Begins

• First innovation was the steam engine, made to drain water in mine shafts as miners increasingly turned towards coal instead of charcoal, which was rapidly disappearing due to the expansion of agricultural fields

  • Used to mechanize the textile industry

• High costs led to a need to concentrate production in one place, leading to the factory system

• Textiles stayed centered in the Midlands because of the availability of coal (easier to bring to factories), the proximity to Liverpool (major import centre for Indian and American cotton), presence of canals which could be used for easier transport, and flat land, which was good for building railroads which replaced canals

• Increased use of coal → more heat → new methods of iron working → need for machinery  → industrialization of the iron industry

The Spread of Industrialization

• Other countries tried to industrialize after seeing British economic growth despite British efforts to curb it

• Expansion diffusion and relocation diffusion

Continental Europe and North America

• Belgian industrialization motivated by existing textile industry, presence of coal and iron, and a cooperative king

• Diffused to the USA via relocation of an Englishman to New England, set up textile industry

  • New England textile mills based on rivers in order to use waterpower and facilitate transportation

• Political instability, lack of waterways, and the larger size hindered industrialization in France

• Germany’s development was hindered by the fact that it was not united until 1871

  • Ruhr Valley became industrial center of Germany due to the presence of coal, and the Ruhr and Rhine rivers

• Eastern Europe did not industrialize until the 19th century

• Reliance on water for transportation outcompeted by railways

Second and Third Industrial Revolutions

• First Industrial Revolution reliant on steam, coal, and waterpower for the textile, iron, and coal industries

• Second Industrial Revolution focused on on electricity and the combustion engine

  • Creation of the assembly line which led to the advent of mass production

  • Use of machines to create parts for other machines

  • Growth of the steel, chemical, plane, and car industries and the development of consumer appliances

  • Pennsylvania, Pittsburgh, and Chicago became centers of the American steel industry due to proximity to coal and iron ore

  • Southern and Midwestern cities became manufacturing centers due to proximity to steel production centers

• Third Industrial Revolution

  • Began in the wake of WW2

  • Relied on electronics, information technology systems, and automation of production 

  • Growth of computer, software engineering, and telecommunications industries

  • Computers stopped being large, expensive government technologies during this time

  • Rise of service industries like banking and insurance

  • Distribution facilitated by retail trade and better transportation 

Colonialism and Imperialism

• A need for raw materials and new markets to feed industrialization led to colonialism, the wealth from which in turn led to the capital needed for more industrialization

• Industrialization led to better transportation which helped Europeans penetrate interiors and get raw materials

• Industrialization led to the mass production of weapons which helped Europeans expand their empires

• Colonies characterized by harsh conditions

  • The Congolese were forced by Belgium to work towards palm oil and rubber quotas, and were violently repressed if they tried to rebel

  • British and French colonies were sources of rubber, cotton, gold, cacao, sugar, and coffee

  • South Asia was flooded with British textiles made from Indian cotton, destroying the Indian textile industry

• Industrialization did not spread evenly during the 19th-20th centuries

  • Western Europe and the US stayed the most industrialized

  • Eastern and Southern Europe lagged behind

  • Most of Asia, Africa, and Latin America were still used for raw materials

Industrial Diffusion and Populations

• Second Agricultural Revolution, which was contemporaneous with the Industrial Revolution, along with advances in medicine grew the European population, increased life expectancies, and lowered death rates

• Population growth, agricultural advancements, and the advent of private ownership of farms increased rural to urban migration, made easier by better transportation

• Industrialization created a middle class and wealth as a marker of social status, arose from managerial positions in factories

  • Merchants, shopkeepers, artisans

  • Not as rich as upper class, but still had higher standards of living

  • Had more time to use for recreational purposes

• Most working class women and children worked nearly their entire lives in factories for little pay

• Growth of cities led to public health challenges, led to creation of new public water and sewage systems and hospitals

• Perceived concern over crime and fires led to formation of police departments and firefighters

• Creation of street lights

• Better nutrition, health, and education lowered the birth rates, death rates also lowered due to smaller families from the costs of raising kids and declining infant mortality rates (DTM Stage 3)

• Public education led to more rights for middle and working class men and women

Case Study: The Fourth Industrial Revolution

18.2 How Economies are Structured (pg 504-511)

Key words: economic sectors, primary sector, secondary sector, tertiary sector, quaternary sector, quinary sector, post industrial economy, Gross Domestic Product (GDP), dual economies

Sectors of the Economy

• Economic sectors - collections of similar economic activities 

• Primary sector: related to extraction of raw materials, no goods can be produced without them

  • Food production: agriculture

  • Power generation: coal, oil, natural gas

  • Construction: clay, lumber, sand, gravel, metal ores

• Secondary sector: related to the production of raw materials 

  • Manufacturing, processing, construction

• Tertiary sector: provides commercial and personal services instead of goods

  • Quaternary sector: processing and handling information and information environmental technology

    • Informational technology, government, libraries and education, scientific research, cultural activities

    • Google, Microsoft, etc.

    • Requires high levels of education

    • Quinary sector: Top leaders in government, science, universities, organizations, health care, and media

Economic Development Patterns

Development and Employment

• Primary sector employment is dominant in less industrialized countries

  • Subsistence agriculture

  • Low economic value since most of it is eaten or runs for low prices

  • Primary sector workers are usually poor

  • Periphery countries

  • Abundant natural resources, fertile soil, and stable governments led to the deemphasizing of primary sector work in China and USA

• Secondary sector employment is dominant in semi-peripheral countries

  • Rely heavily on manufacturing

  • Abundant natural resources pushing industrialization

• Core countries have a substantial secondary sector and dominant tertiary sector

  • Less secondary sector employment due to automation to maintain efficiency

  • Secondary sector depends on the work of tertiary sector workers (retail workers, transportation drivers, utility workers)

Patterns of Economic Activity

• A shift to the secondary sector results in a population concentrated in urban areas

  • Comes from a need to set up factories near sources of raw materials, energy, and labour

• Factories are located in urban areas, usually along railways and ports

  • Facilitates the movement of raw materials and finished goods

  • Provides a potential workforce and market

• Banking and financial services are concentrated in urban areas

• Retail stores, restaurants, insurance, healthcare, and education are distributed wherever there are people

• Quaternary sector jobs are concentrated near institutions of higher education

• Quinary sector jobs are found in countries’ political centres and capital cities

The Postindustrial Economy

• Within industrializing countries, primary employment decreases as tertiary and secondary employment increases

  • Can change as a country moves into a post-industrial economy, marked by very low primary sector employment, somewhat low secondary sector employment, and predominantly tertiary sector employment

    • US, Japan, Singapore, Australia

    • Emphasize production of services

    • Stronger emphasis on institutions of higher education

    • Growing role and acceptance of women in labour outside the home

    • Forces workers to learn new skills in sectors where they are less qualified due to lack of experience

• GDP: total annual value of all goods and services produced by a country’s citizens and companies

Dual Economies

• Two distinct divisions of economic activity across the sectors

  • Usually equal amount of primary and secondary workers

  • Usually semi-peripheral and peripheral economies

  • Vietnam’s dual economy comes from an emphasis in the 1980s on growing the secondary sector in a predominantly primary sector economy

• Differing views on why agriculturalists are resistant to changing sectors

  • Tradition

  • Don’t see a benefit in shifting to the secondary sector

  • Live in a country’s hinterland with little contact with the global economy

18.3 Patterns of Industrial Location (pg 512-517)

Key words: least-cost theory, agglomeration, break of bulk points, bulk-reducing industries, bulk-gaining industries, industrial parks

Least-Cost Theory

• Businesses locate their facilities in a place that will minimize the cost of production

• Assumptions: ignores influence of economic and political systems, there are fixed sources of raw materials, the workers who make up the labour force will not move, there is a uniform cost of transportation between any 2 places

Factors that Influence Location

• Three factors: transportation, labour, and degree of agglomeration

• Agglomeration: when companies, often competing ones, in similar industries locate themselves near one another to take advantage of the same specialized labor, materials, and services and help each other control costs

  • Companies that support an industry will also be in its sphere of agglomeration

• A company chooses a location where the cost of moving raw materials to the manufacturing site, and finished products to the markets, will be as low as possible.

• Companies also locate themselves away from raw materials and markets if the labour is cheap enough for the higher transportation costs

• Agglomeration reduces costs, making it more attractive for companies to follow

• Agglomeration occurs at break-of-bulk points: locations where it’s more economical to break raw materials into smaller units before shipping them

  • Usually at places where mode of transportation changes

  • These locations often develop storage facilities and processing centres

• Ubiquitous raw materials mean that factories can be located anywhere

  • Factories should ideally be located near the market to have minimal transportation costs

• Localized raw materials lead to processing plants near where the material is found

• Bulk-reducing industries: heavy, raw materials cost more to transport than light, finished goods

  • Best location is near the source of raw materials

• Bulk-gaining industries: raw materials cost less to transport than finished goods

  • Best location is near market because it costs more to ship finished goods than the raw material here

From Raw Material to Market

• 1. Raw material timber is harvested

• 2. It is transported to a processing plant close to the forest (bulk-reducing)

• 3. Cut into boards, loses weight

• 4. Lumber is purchased and manufactured into various products

• 5. The finished products are sold

Limitations of Least-Cost Theory

• Ignores political and economic systems

  • Tariffs and quotas can influence people to build factories in areas they otherwise wouldn’t have

• Markets are not located at a single point, they follow consumer demand or where companies in that industry are located

Location Decisions Today

• Modern advancements mean that transportation costs are less important now

  • Use of standardized planes and ships

  • Most goods weigh less than they used to

• Cost of labour is now more important

  • High-tech products demand high education and skill

  • Companies increasingly locate factories in poor countries to dodge having to pay higher wages to semi skilled workers

  • Factories are more likely now to be large single story structures

    • Contributes to the flow of manufacturing from urban centres to industrial parks (a collection of manufacturing facilities)

    • Industrial parks are usually found in suburbs and next to highways

  • Global availability of customers means that producers locate plants all over the world