chapter 7 manufacturing
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Chapter 7 Manufacturing. Fundamental nature of manufacturing processes Major manufacturing regions in the world Deindustrialization in the developed world and the rise of manufacturing in the developing world Sector specific dynamics - PowerPoint PPT PresentationTRANSCRIPT
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Chapter 7 Manufacturing• Fundamental nature of manufacturing
processes• Major manufacturing regions in the world• Deindustrialization in the developed world
and the rise of manufacturing in the developing world
• Sector specific dynamics• The rise of flexible production systems,
business process outsourcing & downsizing• (The product life cycle model is not in this
chapter again)
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The Nature of Manufacturing
• Elements of the manufacturing process:
(a) product design, (b) assembling inputs, (c) transforming the inputs, (d) marketing the product
• Location decision – Weber model again
• Value added in each stage of production
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Porter’s Value Chain
Firm InfrastructureHuman Resource Management
Technology Development
Procurement
SupportActivities
InboundLogistics
PrimaryActivities Operations
OutboundLogistics
Marketingand Sales
Service
Upstream value activities Downstream value activities
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Concentration of World Manufacturing80% of Global Output in Three Regions
How current are these data?Current role of China?
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Global Distribution Manufacturing Value Added
North America
26%
Europe33%
Japan14%
China11%
Other Asia8%
Rest of World8%
Source: Calculated from NationMaster.com
U.S. – 22.4%
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Shares of Manufacturing Value Added
Source: World Bank World Development Indicators, 2011
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U.S. & CanadianManufacturingBelt: AccountsFor aboutTwo-thirds of Total ManufacturingEmployment inThe U.S. andCanadaRise of
Maquiladoras –Border & interiorMexico
A goodOverview Of specializedVersus marketOriented manufacturing
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Specialization in the Regional Distribution of Manufacturing
• Some cartograms – where area is proportional to employment (using the BEA Economic Area classifications)
• The first map shows the actual geometry of the BEA Economic Areas
• The following maps depict industries distributed broadly across the U.S., and industries that are highly concentrated
• These are old maps, but for many lines of manufacturing the data are probably relevant
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BEA Economic Areas – As of 1985
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Other Manufacturing Regions
• Europe – Figure 7.5, Japan - Figure 7.9
• Globalization of manufacturing – movement of capacity from U.S. & Canada, Europe, and Japan to less developed countries
• “The new international division of labor”
• “Anatomies of Job Loss”
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U.S. Manufacturing Employment Trend
x
2012
2013
x
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Change in U.S. Mfg. Employment 1960-2000
Post-2000 Trends?
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Deindustrialization in industrialized countries
The Share of Mfg. may have fallen, but real mfg. output is probably up in all these countries – see next slide for WA state
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Real Output by Industry WA State
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Anatomies of Job-Loss: disinvestmentBroad
StructuralTrends
CorporateAgency
The “outfall”of restructuring
Spatialoutcomes
Macroscalecausal forcesin the global
economy
Corporate responsesto global trends
Corporate competitivestrategies
Plant openingsPlant closings
In-situ changes
Events on the ground
Bluestone & Harrison - Deindustrialization of America:“The core of B&H’s argument followed a restructuring approachwith the need to restore the drive to accumulate, producing, through spatially distributed effects, a major reworking of therole of U.S. cities and regions in the geographic distributionof production.”
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Impacts on Manufacturing Jobs in U.S., Europe and Japan
• Job losses in manufacturing in all of these regions
• Replacement has primarily been in services
• Occupations created in the services are frequently very different than occupations lost in manufacturing, leading to high unemployment rates and income deterioration
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Assets of Centers of Control versus Peripheral Regions
Centers of Control• Key role in circulation;
realizing wealth• Focal point for investment,
profits, interest• Focus on forms of capital:
FIRE• Occupational dominance by
professionals• “Virtuous” multiplier
relationships driven by above points
• Support networks of a large cadre of service workers in lower occupational categories
Peripheral Regions• Key role in creating value
through labor pools & resource endowment
• Compete with centers for capital
• Capital transfers to core; possible scarcity in periphery
• Multipliers chancy: impacts only if investment comes to them
• Employment fortunes conditioned by “waves of investment” and restructuring
No direct transference
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Current Spatial Outcomes in the U.S.
• Old centers are having their power erode
• New centers are rising, based on redistribution– Charlotte NC - banking
or the rise of “new industrial spaces”
- Orlando-Melbourne (retirement)
- Las Vegas (entertainment)
- Seattle & Atlanta - technology based
manufacturing & information services• The rural renaissance - retirement, footloose entrepreneurs, recreation, rich people, niche mfg., IT, commuter air and courier services