7.2

The Big Picture

  1. Economic development is uneven (locally, regionally, globally)

    *Core-preiphery setup (MDC’s vs. LDC’s)

  2. MDC’s typically focus more on services; LDC’s on agriculture /industry

  3. Multiple


Economic Activity Sectors

  1. Primary=hands-on Earth (farming, mining, etc.)

  2. Secondary=manufacturing transofmring raw materials into finished products)

  3. Teritary=provision of goods/services (sales, restaurants/coffeeshops, etc.)

  4. Quaternary=intellecturak/knowledge-based services (IT, media, information-sharing, finance, administration, legal services, insurance, scientfic research, higher education, etc.)

  5. Quinary = complex decision making (corporate governance/CEO’s, public policy, government, etc.)


Economic Sectors: MDC’s vs. LDC’s

  • As countries devleop, % of labor froce involved in eahc of the 5 sector changes

  • Beginning of industrialization and development=growth in secondary, reduction in primary

  • Continued growth=shifts in teritary, quaternary, quinary

  • Business’ goal=profit maximazation (max. earnings, minimum costs)

  • Desirable traits of ANY lcoation=connectivity, accessibility

1) Spatially-fixed costs (costs that remain the same no matter how much is produced/sold-salaries, rent, etc.)

2) Spatially-variable costs (based on how much is produced-amount of raw material, energy used, etc.)


The Two biggies: Situation, Factors of production

  • Situation factors


*Bulk-gaining vs. bulk-reudcing industries

  1. Cost of transporting input>cost of transporting finished product=locate closer to input (bulk-reducing)

  2. Cost of transporting input< cost of transporting produce=lcoate closer to market (bulk-gaining)

    • Transportation costs depend on weight, distance, method of transport

    • Break of bulk points(Areas with multiple transportation nodes): los Angeles, NYC)

2) Factors of Production

  • Land: modern factories in MDC’s likely suburban/rural (more space available, cheaper land, no longe rbound by railroad lines)

  • Labor: depends on labor nees (Fordist vs. post-fordist)

  • Capital:S illicon valley


  • Industries want to minimize costs in:

    1. Transportation=lowest possible cost of input transport to factory, output transport to market

    2. Labor=cheapest labor possible, but still of decent quality

    3. Agglomeration=good to some degree (shared infrastructure/costs); however, overcrowding competition can negagete some original benefits; lead to deglomeration

    *Transportation costs: most crucial factor of industrial location