Unit 6: Industrialization and Development

Unit 6: Industrialization and Development

Warm-Up What is industrialization? What are 3 effects of the industrial revolution? 1 Major Economic Classifications 2

Economic sector is dividing the countrys population based upon the economic area in which that population is employed.

3 Economic Sectors Primary Sector Secondary Sector

Tertiary Sector Quaternary Sector Quinary Sector

Jobs that revolve around getting raw materials from the Earth. Ex. Jobs that deal with processing the raw materials into a finished product of greater value. Ex. Services that move, sell, or trade the products made in the secondary sector. Ex. Jobs that involve information creation and transfer.

Ex. Jobs that require the highest level of decision making. Ex. 5 Economic sectors can also be broken down into formal vs informal

Formal Market: Ecuador Informal Market: Ecuador Not reported to the government, no taxes paid. Formal Market: Brazil Informal Market: Brazil

Afghanistan GDP - composition, by sector of origin: agriculture: 20% industry: 25.6% services: 54.4% Australia Labor force - by occupation: agriculture: 3.6% industry: 21.1%

services: 75% (2009 est.) 8 Primary Sector jobs Specific examples Your Resource

What is it used for? Where is it found? How is it extracted? Secondary Sector jobs

Specific examples Tertiary Sector jobs Specific examples Quaternary Sector jobs

Specific examples 9 Your Resource What is it used for?

Primary Sector Direct jobs Specific examples Secondary

Sector Direct jobs Specific examples Tertiary Sector

Direct jobs Specific examples Quaternary Sector Direct jobs Specific

examples Related Jobs (include resource) 10

Resources Available

Dairy Corn Iron Ore Wheat Corn

Petroleum Livestock (cattle) Softwood Coffee Salmon Sugar cane 11

Industrial Revolution Industrialization is the process by which economic activities evolved from producing primary goods to factories that mass-produce goods.

Cottage Industries are homebased manufacturers where people manufacture tools and agriculture equipment for their own communities. The Industrial Revolution was the process of technological change that started in the late 1700s that transformed how

goods were produced and obtained by the people. Began in England: *machines replaced human labor *coal was the leading energy source *improved transportation and infrastructure Brought on the commodification of labor

Great Britain Diffusion of the Industrial Revolution Belgium/France (late 1700s) The United States (1790s) Most of Europe came late to the party because of revolution and strife (ie. French

Revolution, Napoleonic Wars) Italy, Netherlands, Russia, Sweden (late 1800s) The United States entered the IR later than Belgium and France but expanded more rapidly.

The Middle East and Africa entered the IR because of WWI and the need for oil. Asia, Middle East and Africa (Mid 20th Century) Infrastructure includes services that support economic

activities. It provides for transportation, communication, education, and other external needs of a company. Four Primary Industrial Zones NICs New Industrial Countries Northeaster

n US & South Canada Western Russia & Ukraine Central &

Western Europe East Asia (4 Tigers) & Japan, China The Rust Belt

Deindustrialization: industrial facilities leave an area, taking the economic base with them New International Division of Labor Breaks up the manufacturing process by having various pieces of a product made in various countries and then assembling the pieces in another country

Southeast Asia Northern Africa Secondary Industrial Regions Mexico

Brazil Webers Least Cost Theory Alfred Webers Least Cost Theory is a theory that explains the location of industries based on where cost are the least.

Assumptions of his theory UNIFORMITY - An area is completely uniform physically, politically, culturally, & technologically ONE PRODUCT/MARKET - Manufacturing involves a single product to be shipped to a single market whose location is known RAW MATERIALS FROM MULTIPLE

LOCATIONS - Inputs involve raw materials from more than one known source location. INFINITE /IMMOBILE LABOR - Labor is infinitely available but immobile in location FIXED TRANSPORTATION ROUTES Transportation routes are not fixed but connect origin & destination by the shortest path; and transport costs directly reflect the Transportation: the most important cost - where

cost to transport materials and product is lowest Labor: high labor cost reduce profit where there is a supply of cheap, non-union labor is best Agglomeration: advantages & savings made when industries clump together for mutual advantage Deglomeration: unclumping of factories because of negative effects & higher costs associated with industrial overcrowding Bulk Gaining

add weight or bulk during manufacturing process Bulk Losing remove weight or bulk during the production process

Bulk Reducing Heavier input, shorter distance to plant Input Factory

(Material Orientation) Lighter output, longer distance to market, Input Factory

Market Market Lighter input, longer distance to plant. Bulk Gaining (Market Orientation)

Heavier output, shorter distance to market Location Triangle The location triangle is used to determine the best place to locate a manufacturing plant based on Webers Model. Resource 2

Market Resource1 28 Exceptions to the rule Footloose industries Not restricted in where they can locate Maintain the same cost of transportation and

production Substitution principle Reducing the cost of labor even though an increase in transportation will follow Agglomeration Industries clumping together in same space to share benefits and costs of region

29 Related concepts Locational Interdependence Industries choose their locations based on where their competitors are. Ex. Deglomeration the unclumping of factories

because of the negative effects and higher costs associated with industrial overcrowding Ex. 30 Related concepts High-tech corridor and Technopoles regions where technology and computer industries agglomerate

Ex. Backwash effect Negative effects that happen when other areas suffer out migration of talented people to Technopoles Ex. 31 Rowstows Stages of Development

Development Development Process of improving material condition of people through technology & knowledge Liberal development theory Development is a process through which all countries can move 33

Less Developed Countries are those on the economically poorer side of the spectrum. More Developed Countries are on the wealthier side of the development spectrum. Models of Economic Development Wallersteins World System Analysis 1. Core: High Income High use of technology

High % of tertiary activities High levels of Education by the majority of the population OECD countries G8 2. Semi-Periphery: used to be peripheral states Increased economic development BRICS 3. Periphery: Low Income

Low use of technology High % of primary activities Low levels of education by the majority of the population How MDCs and LDCs Differ: GDP

Types of Jobs $20,000 in MDC $1000 in LDC MDC Fewer Industrial

Jobs LDC More Industrial Jobs Consumer Goods MDCs can afford

Consumer goods and have more access to them. Economic development is often accompanied by social development.

Development Gap is the widening difference between development levels in MDCs and LDCs. Dependency Theory argues that LDCs are locked into a cycle of underdevelopment by the global economic system that

supports unequal structure. Core-periphery model states that the worlds countries are divided into three groups: core, periphery, and semi-periphery. Looks at the world as a capitalistic system of interlocking states

connected through competition. BRICS: Brazil, Russia, India, China South Africa added in 2010 G8: Top State economies Canada, France, Germany, Italy, U.K., U.S.(Core) Mexico recently admitted (semi-periphery)

BRICS: Semi-Peripheral States Rowstows Stages of Development seeks to explain and predict countries patterns of economic development by explaining five stages which all countries move through as they improve their economic

development. Models of Development Rostow: International Trade Approach International Trade Approach Developmentalism Predicts that all countries will eventually reach the highest level of development (Rostow follows developmentalism)

Criticism: It is not an equal opportunity system, core countries have advantages that peripheral countries do not. Based on European model of development. Criticisms

Does not account for inequities in resources. Considers each country an independent

agent . Warm-Up Which model of development do you believe is mor accurate (Wallerstien or Rostow). Explain your response! 54

How is Development Measured? 55 Categorizing Development Development Categorizing Development

Geographers break down levels of development into 1st-5th world countries 1 World Countries st

Service-Based Economy Free Market High Productivity High Standard of living 1st World Countries = Blue

2 World Countries nd Hard-Line Communist Countries Centrally planned economies 3 World Countries

rd Countries with economies based on Primary activities Ex. Niger, Haiti 4 th and 5th

World Countries 4th World Third-world countries who have suffered a financial crisis and no longer have a functioning economy

Afghanistan 5th WorldThird world country which lacks BOTH a functioning government and economy Somalia Women and Development Women are paid less for equal work in MDCs

and LDCs Women work more hours than men in almost all countries Women and Development Gender-Related Development Index (GDI)- Evaluates gender equality by comparing

Per capita income School enrollment Literacy Life expectancy Women and Development Gender Empowerment Measurement (GEM) evaluated

geneder equality by comparing Per capita income Types of jobs held by women (technical/administrative vs. labor or basic jobs) Natural Resources and Development Natural resources have a major impact on the development of a region Dubai

Natural Resources and Development Core-countries use natural resources more rapidly that peripheral countries Core-countries are often dependent upon peripheral countries for their natural resources CO2 Emission

Sustainable Development Emphasis on conservation of resources for future generations Requires development of renewable energy sources How to Measure Development 68

Standard of Living Measurement of Life Enjoyment which considers: Basic Needs being met Access to Technology

Education Expendable income GDP per Capita (per head) Total number of goods and services produced by a country divided by the total population GDP Per Capita? What is the problem with using the GDP

per capita for predicting standard of living within a country? GINI Coefficient Measures the income disparity between the wealthiest and the poorest in a country (100 is the highest and worst score) Human Development Index

Developed to gain a predictor of standard of living by evaluating both the productivity of a country and social factors Economic Factors: GDP per Capita Social Factors: Literacy Rate, Level of Education, Life Expectancy Score of 1 is the Highest and Best Score Human Development Index

Human Development Index Can you think of any other factors the Human Development Index should consider when ranking standard of living? Physical Quality of Life Index Also developed to be a predictor of standard of living

by looking at Literacy Rate Life Expectancy Infant Mortality Rate Physical Quality of Life Index Can you think of any other factors the Physical Quality of Life Index should consider when ranking standard of living? Do you see any

problems with its measurement? HOW TO INCREASE DEVELOPMENT International Trade Idea: countries can increase their development by trading with other countries Major Organizations: (WTO) World Trade Organization

World Trade Organization Goals: Reduce barriers to international trade by getting rid of trade restrictions such as tariffs Allow for easier movement of money between countries Enforce trade agreements (countries can file a complaint with the WTO if another country violated a trade agreement

Foreign Direct Investment Idea: Give countries loans, to complete development projects Major Organizations: World Bank and (IMF) International Monetary Fund World Bank Provides loans to countries to complete specific development projects such as strengthening infrastructure, financial

institutions, transportation modes, and service projects World Bank Development Timeline International Monetary Fund Gives loans to countries who are financially insecure to help stabilize their economy. These loans do not have a specific project specified, the country can choose how to use the loan.

Foreign Development Aid Aid is not a loan, but a payment of money to help them complete development goals Globalization

85 Globalization: The increasing economic, cultural, demographic, political, and environmental interdependence of different places around the world.

International Trade : Pushing for a country to identify its unique set of strengths in the world and to channel investments toward building on those strengths Comparative Advantage When one region is relatively more efficient at producing a

particular product compared with other regions. Agents of Globalization 89 Multinational Corporations (MNC): Business with

headquarters in one country (MDC) and production facilities in another countries (LDC) New International Division of Labor: Breaks up the manufacturing process by having various pieces of a product made

in various countries and then assembling the pieces in another country Special Economic zones: regions that offer tax breaks, eased environmental restrictions, and other incentives to attract foreign

business Maquiladora zones Mexicos special economic zones on northern borders with US to create jobs for farmers our of work Maquiladoras

Foreign-owned assembly companies located in the US Mexico border region Cheaper labor Favorable tax breaks Lax environmental regulations Close to markets at minimal cost Maquilladoras Examples of

Maquiladoras in Mexico BMW Kodak/Verbatim Eberhard-Faber Fisher Price Ford JVC GM

Hasbro Hewlett Packard Honda Honeywell, Inc. Hyundai Precision America IBM Mercedes Benz

Mitsubishi Electronics Corp. Motorola Nissan Philips Samsonite Corporation Samsung Sony Electronics Toshiba

Xerox Type of employment: Worker from Auto Trim de Mexico S. A. de C. V Work Schedule: 40 hours per week Daily wage: $8.29 Minimum wage (Geographic Area A): $3.44 per day Wage per hour: $1.04

Weekly salary: $58.09 Discount for union dues (4%): $2.32 Net pay: $55.77 Amount leftover per week for clothes, shoes, entertainment and medical attention: $2.03 95 outsourcing

Turning over much of the responsibility for production to independent suppliers Vertical integration: company owns all phases of production What does outsourcing mean for the profit of a company?

What does it mean about choosing a location? http://www.youtube.com/watch?v=i5zg1fG7m88

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