price changes in oil

• when the price of oil drops (such as the drastic decrease in 2014), gas prices decrease, production cost decreases, but this is bad for oil-producing economies

  • oil companies lose revenue

  • 250,000 jobs were lost due to the 2014 price drop

  • governments in oil-producing countries lose tax revenue

    • this decreases the quality of public services and quantity of public employees, resulting in lower quality of life and a negative impact on the economy

  • bad for energy industry investors

the changing global economy

• increased automation means decreased need for labor

• changing spatial distribution of manufacturing

outsourcing and economic restructuring

• manufacturing has moved from more developed to less developed countries, creating a “constant downward pressure” on wages and job instability

• decreasing production costs → decreasing costs of goods and services → increased consumer benefit

• government incentives (eg. tax breaks) and weak policy are good for this purpose

• transportation costs may increase because markets are primarily in richer, more developed countries

• new international division of labor

  • core countries eg. US and Germany have increases in quaternary sectors (focused on research and development)

  • middle-income countries eg. China and Mexico manufacture goods for development in MDCs

• weak policy can also incentivize investment, or trade of illegal drugs

transnationals and export-processing zones

• export-processing zones (EPZs) are widely used to attract manufacturing jobs and usually located in close proximity to international airports, seaports, and borders for easy exports

• incentives include tax breaks

  • eg. no taxes on importing raw materials or machinery into EPZs if they are used for producing exports

• protects existing businesses for local markets

• ethical and societal changes related to EPZs

  • question of ethical standing — are transnational corporations taking advantage of workers by offering low wages, or are wages reasonable for the region, and offer job to many people (especially women) who otherwise wouldn’t have access to them?

  • may change social status of women: female employment → less female dependency on men → more validation of concerns → lower birth rates (less time at home)

the post-industrial landscape

• economic landscapes change with shifts in economic activities → post-industrial economies form

• main economic activities become providing services and processing information

• brownfields

  • abandoned sites of previous development, especially of factories

  • in the US, located primarily in the Rust Belt

    • often empty as buildings are torn down rather than abandoned

  • some are renovated and structurally sound

• corporate parks and campuses

  • office buildings and commercial spaces may open, leading to congregation in corporate parks or business parks

  • corporate vs. industrial parks

• really big corporations may create corporate parks just for themselves, eg. Samsung Digital City

• technopoles

  • technological agglomerations

  • can create easier service sharing and attract a large skilled workforce

  • often near colleges that specialize in computer science, math, engineering, science, or entrepreneurial business programs (eg. Silicon Valley near Stanford and UC Berkeley)

  • can spark economic growth through high rates of entrepreneurship and innovation

  • hope for spin-off benefits to the greater industry and economy