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Unit 6:Industrial and Economic Development
Chapters: 10,12 and 14
20-22 Days
Unit Concepts
What factors account for uneven economic development across the globe?
What is the relevance of the growth theories of economic development?
How has globalization affected labor, finance and markets around the world?
What does Development Mean?
Development implies “progress”
Progress in what?Do all cultures view development the same
way?Do all cultures “value” the same kinds of
development?
Main Points Geographically, the single
most important feature of economic development is that it is highly uneven.
Geographical divisions of labor have evolved with the growth of the world-system of trade and politics.
Regional cores of economic development are created cumulatively.
Spirals of economic development can be arrested in various ways.
The globalization of the economy has meant that development is much more open to external influences.
Per Capita GNI
Patterns of Economic Development
Economic development refers to processes of change involving the nature and composition of the economy.
These processes can involve three types of changes:
Changes in the structure of the regions’ economy;
Changes in forms of economic organization within the region;
Changes in the availability and use of technology within the region.Guangdong Province, near
Shenzhen
Measuring Development
Gross National Product (GNP)
Measure of the total value of the officially recorded goods and services produced by the citizens and corporations of a country in a given year. Includes things produced inside and outside a country’s territory.
Gross Domestic Product (GDP)
Measure of the total value of the officially recorded goods and services produced by the citizens and corporations of a country in a given year.
Gross National Income (GNI)
Measure of the monetary worth of what is produced within a country plus income received from investments outside the country.
** Most common measurement used today.
Gross National Income Per Capita
GNI per capita is one of the best single measures of economic development.
Issues with Measuring Economic Development
All measurements count the:Formal Economy – the legal economy that
governments tax and monitor.
All measurements do not count the:Informal Economy – the illegal or uncounted
economy that governments do not tax or keep track of.
Other Ways of Measuring Development
Occupational Structure of the Labor ForceProductivity per WorkerTransportation and Communications
Facilities per PersonDependency Ratio
Dependency TheoryThe political and economic relationships between countries and regions of the world control and limit the economic development possibilities of poorer areas.
-- Economic structures make poorer countries dependent on wealthier countries.
-- Little hope for economic prosperity in poorer countries.
Stages of Economic Development
According to Walt Rostow’s view, now regarded as overly simplistic, places and regions can be seen as following parallel courses within a world that is
steadily modernizing.
Three Tier Structure
Core Processes that incorporate higher
levels of education, higher salaries, and more technology
* Generate more wealth in the world economy
Semi-periphery Places where core and periphery
processes are both occurring. Places that are exploited by the core but then exploit the periphery.
* Serves as a buffer between core and periphery
Periphery Processes that incorporate lower
levels of education, lower salaries, and less technology
* Generate less wealth in the world economy
Barriers to Economic Development
Low Levels of Social WelfareTrafficking
Foreign DebtStructural adjustment loans
Political InstabilityWidespread Disease
Malaria
Process of Regional Economic Growth Geographical path dependence
Initial advantage
External economies
Localization economies
Regional Economic Decline
Spread effects
Import substitution
Deindustrialization
The Global Assembly Line
Transnational corporations
Conglomerate corporations
< The annual sales figures of many of the world’s largest corporations exceed the Gross National Income of some countries.
Toyota’s Global Assembly Line
Toyota’s global production strategies
Flexible Production SystemsThe strategies of transnational corporations are an important element in the transition from Fordism to Neo-Fordism in much of the world.
Fordism
Neo-Fordism
Flexible production systems
Just-in-time production
Industry and Services
Chapter 12
Industrial Revolution:a series of inventions that brought new uses to known energy sources, new machines to improve efficiencies and enable other new inventions.
eg. steam engine
iron smelting
water pump
Beginning of Industrial Revolution
When and where did the industrial revolution begin?In Great Britain in the mid to late 1700s
Why Great Britain?Flow of capitalSecond agricultural revolutionMercantilism and cottage industriesResources: coal, iron ore, and water power
Diffusion to Mainland EuropeIn early 1800s, innovations diffused into mainland Europe.
Location criteria: proximity to coal fields
connection via water to a port
flow of capital
Later DiffusionIn late 1800s, innovations diffused to some regions without coal.
Location criteria: access to railroad
flow of capital
Diffusion of Industrial Revolution
Location Theory
Location Theory – predicting where business will or should be located.
Considers:- Variable costs- Friction of distance
Location Models
Weber’s Model
Manufacturing plants will locate where costs are the least (least cost theory)
Theory:
Least Cost Theory
Costs: Transportation, Labor, Agglomeration
Hotelling’s Model
Location of an industry cannot be understood without reference to other industries of the same kind.
Theory:
Locational interdependence
Losch’s Model
Manufacturing plants choose locations where they can maximize profit.
Theory:
Zone of Profitability
Losch’s ModelZone of Profitability
Major Manufacturing Regions of North America
Major Manufacturing Regions of Russia
Major Manufacturing
Regions of East Asia
Post-FordistFordist – dominant mode of mass production
during the twentieth century, production of consumer goods at a single site.
Post-Fordist – current mode of production with a more flexible set of production practices in which goods are not mass produced. Production is accelerated and dispersed around the globe by multinational companies that shift production, outsourcing it around the world.
Time-Space Compression
Through improvements in transportation and communications technologies, many places in the world are more connected than ever before.
Time-Space CompressionJust-in-time delivery
rather than keeping a large inventory of components or products, companies keep just what they need for short-term production and new parts are shipped quickly when needed.
Global division of labor
corporations can draw from labor around the globe for different components of production.
Deindustrialization
This derelict steel mill in New Jersey is testament to the downward economic spiral.
Deindustrialization –
a process by which companies move industrial jobs to other regions with cheaper labor, leaving the newly deindustrialized region to switch to a service economy and work through a period of high unemployment.
Abandoned street in Liverpool, England, where the population has decreased by one-third since deindustrialization
Geographical Dimensions of the Service Economy
New Influences on Location:Information technologies Less tied to energy sourcesMarket accessibility is more relevant for
some and less relevant for others because of telecommunications
Presence of Multinational Corporations
Wal-MartRequires producers of goods to locate offices in the Bentonville, Arkansas (Wal-Mart’s headquarters) area in order to negotiate deals with Wal-Mart.
Proctor & Gamble put their office in nearby Fayetteville, Arkansas.
How does the presence of these companies in the region change the region’s economy and its cultural landscape?
NikeHeadquartered in Beaverton, Oregon, Nike has never produced a shoe in Oregon. Beginning in the 1960s, Nike contracted with an Asian firm to produce its shoes.
Skopje, Macedonia
The swoosh is ubiquitous, but where is the shoe produced?
Nike has a global network of international manufacturing and sales.
Modern Production
Outsourcing –
moving individual steps in the production process (of a good or a service) to a supplier, who focuses their production and offers a cost savings.
Offshore –
Outsourced work that is located outside of the country.
Globalization and the Geography of Networks
Chapter 14
What is Globalization?
A set of processes that are:
- increasing interactions- deepening relationships- heightening
interdependence
without regard to country borders.
A set of outcomes that are:
- unevenly distributed- varying across scales- differently manifested
throughout the world.
Globalization
Geographer Andrew Kirby explains that with globalization, we are living “not so much in a world without boundaries, or in a world without geography – but more literally, in a world, as opposed to a neighborhood or a region.”
Networks
Manuel Castells defines networks as “a set of interconnected notes” without a center.
Time-Space CompressionGlobal Cities
World Cities most Connected to New York City
This map shows the 30 world cities that are the most connected to New York City, as measured by flows in the service economy.
Networks in Development
Nongovernmental Organizations (NGOs) have created a web of global development networks.
Participatory Development – idea that locals should be engaged in deciding what development means for them and how to achieve it.Gets back to “What is development and how do we
measure it?”
Nongovernmental Organizations (NGOs)entities that operate independent of state and local governments, typically, NGOs are non-profit organizations. Each NGO has its own focus/set of goals.
Microcredit program:
loans given to poor people, particularly women, to encourage development of small businesses.
Dollarization – Abandoning the local currency of a country and adopting the dollar as the local currency.
El Salvador went through dollarization in 2001
Maquiladora Centers
Cheap labor and tax breaks for firms manufacturing and assembling good for re-export have made many Mexican border towns attractive
to U.S. companies.
Globalized Office
A call center in Bangalore, India Hyundai Maquiladora, Tijuana, Mexico
• Institutionalization of savings; large pools of capital
• Banks with overseas branches (i.e., OPEC)
• Print more money, causing inflation
• Governments lift restrictions and regulations in banking and finance
• U.S. trade deficits (the debt ceiling has been raised to $9 trillion)
• “Hot” money is globally laundered
Government-created Island of Development
Malaysian government built a new, ultramodern capital at Putrjaya to symbolize the country’s rapid economic growth.
Corporate-created Island of Development
The global oil industry has created the entire city of Port Gentile, Gabon to extract Gabon’s oil resources.
Networks in Media
Vertical integration – a corporation that has ownership in a variety of points along the production and consumption of a commodity chain.
eg. Media Companies
Goal is synergy, the cross promotion of vertically integrated goods.
Networks in Media
Networks of Retail Corporations
Horizontal integration – ownership by the same firm of a number of companies that exist at the same point on a commodity chain.
eg. The Gap (Banana Republic, Old Navy)
Global retail corporations have more connections to the local around the world than global manufacturing corporations. Retail stores create a local presence.
Identities in a Globalized World
Identity – how we make sense of ourselvesWe have identities at different scales.Globalized networks interlink us with flows of
information and global interaction.In a globalized world, a growing number of
people are “making sense of themselves” within the context of the globe.
Personal Connectedness
When a tragedy occurs somewhere in the world, people have the desire to: personalize it. localize it.
In the process of personalizing and localizing a tragedy, a new global awareness can be created.
Personal Connectedness
When a death or tragedy happens, how do people choose a local space in which to express a personal and/or global sorrow?
Short term = spontaneous shrinesLonger term = permanent memorials
Landscapes of Violence and Tragedy
Geographer Ken Foote draws from extensive fieldwork to understand how Americans memorialize tragedy.
Arlington National Cemetery (right) where thousands came to pay respects to Jacqueline Kennedy Onassis, who had recently died.
The Process of Memorializing Place
Whether and how quickly a place is memorialized depends on:
fundingdebate over what to
buildwho to rememberwhether people want to
remember the site