Industry

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Where did Industry Originate?

• Processing of raw materials and manufacturing of capital & consumer goods

• Industry is highly clustered in space• The location of industry is determined by

the tension between the location of raw materials and the location of markets

• Certain industries are attracted to certain locations

Where did Industry Originate?

• Before the Industrial Revolution, goods were manufactured in private homes – this was referred to as cottage industry

• The manufacturing of goods in a factory began in the UK in the late 1700s and was referred to as the Industrial Revolution (IR)

• The root of the IR was the introduction of new technology which changes the way goods were made

The Industrial Revolution

• The IR diffused to Europe and North America in the C19th and to the rest of the World in the C20th

• IR was industrial, social, economic & political• IR involved gradual changes in ideas and

technology to enable goods to be manufactured more efficiently and cheaply in large quantities

• IR fuelled by the invention of the steam engine (James Watt 1769)

The Industrial Revolution

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Diffusion of the Industrial Revolution

• The iron industry followed by the textile industry were leaders in increasing output as a result of Watt’s steam engine

• Constant high heat is required to mill iron from its ore – the steam engine was able to provide the constant high heat source

• Production of iron in high quantities transformed other industries – mining, engineering, transportation

Diffusion of the Industrial Revolution

• Coal was required to fuel the engine• Hence industries started to cluster around

regions of coal deposits• New inventions were engineered to aid the

industrial process – hence thee birth of modern engineering and machine parts production

• Canals were built to transport materials and finished goods

• Eventually railways came into being through the invention of the steam locomotive

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Diffusion of the Industrial Revolution

• The textile industry evolved as a result of the invention of the spinning jenny & through large looms

• Later bleaching techniques fueled inventions in the chemical industry

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Diffusion of the Industrial Revolution

• Food processing to feed expanding urban populations was transformed through the invention of canning techniques (Nicholas Appert) and chemical additives

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Diffusion from the UK

• Britain’s Crystal Palace (1851) was the most visible symbol of Britain’s industrial power

• The IR diffused eastwards towards Europe and westwards across the Atlantic to North America

• Diffusion to Europe was delayed by political instability (the French Revolution & Napoleonic Wars) & the unification of Germany (1870s)

• Britain also deliberately kept industrial secrets within the UK

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Diffusion to the USA

• Industrialists were discouraged from migrating to America

• However Samuel Slater migrated to Rhode Island and set up a textile mill (1791)

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The IR in the USA

• The textile industry in the USA grew as a result of the Napoleonic Wars and by 1860 the US was 2nd only to the UK

• Other industrial processes however, were not used in the USA until the late C19th as the US concentrated on food and lumber

• The 2nd industrial revolution occurred in the USA – Henry Ford’s assembly line

Where is Industry Located?North America•New England•Middle Atlantic•Mohawk Valley•Pittsburgh – Lake Erie•W. Great Lakes•Golden Horseshoe

North America

• New England– Oldest region - textiles

• Middle Atlantic– NYC-Washington DC – large consumer markets & ports

• Mohawk Valley– Upper NY state (Hudson R & Erie Canal) – cheap hydro – steel,

food, electro-chemicals• Pittsburgh – Lake Erie

– Coal & iron ore- iron & steel mills• W. Great Lakes

– Detroit-Chicago-Milwalkee – consumer market, transport hub – auto, agro-chemicals, clothing, furniture

• Golden Horseshoe (St. Lawrence & Lakes Peninsula– St. Lawrence Seaway, cheap hydro, Canadian markets – steel,

food processing, chemicals, ship building

Changing US Industry Distribution

•Decline in N & E•Growth in S & W•California & Texas•Steel, textiles, tobacco•Petro-chemicals•SE – Right to work•SW – low & high tech

Where is Industry Located?

Western Europe•Rhine Ruhr•Mid Rhine•UK•Northern Italy

Eastern Europe•Central Industrial District•St. Petersburg Industrial District•Eastern Ukraine Industrial District•Volga Industrial District•Urals Industrial District•Kuznetsk Industrial District•Silesia Industrial District

Western Europe• Rhine Ruhr

– Rivers Rhine & Ruhr– Iron & Steel & other heavy industries

• Mid Rhine– Lacks raw materials but is centred in a major

consumer market – transportation hubs, luxury cars, textiles & high end consumer goods

• UK– Midlands is oldest industrial region – outmoded and

less important; SE UK new region – high tech close to EU

• Northern Italy– Po River Basin – textiles, cheap hydro & labour,

processing raw materials & machine parts assembly

Eastern Europe

• Central Industrial District (Moscow)– Large consumer market; textiles & chemicals

• St. Petersburg Industrial District– Near Baltic Sea – shipbuilding; local food processing

• Eastern Ukraine Industrial District– Coalfields – iron & steel

• Volga Industrial District– Petroleum & natural gas fields - petrochemical

• Urals Industrial District– Valuable metals; fuels must be shipped in

• Kuznetsk Industrial District– Coal & iron ore – iron & steel mills

• Silesia Industrial District– Coalfields (iron ore is imported – iron & steel mills

East Asia

• Japan is one of the wealthiest countries because of industrial development

• China has the 2nd largest economy after the USA• S. Korea & Taiwan have used international trade to

become NIC (newly industrialized countries)• Japan, S. Korea & Taiwan have few natural resources –

but has large, cheap labour markets – exports consumer goods cheaply

• Japan has a reputation for high quality electronic which requires highly trained workers

• Japan has furthered industrial processes through JIT (Just-In–Time) TQM (Total Quality Management) technologies

Why do Industries have Different Distributions?

• To maximize profits industries must minimize production costs

• Geographers try to explain why one location might prove more profitable for a factory than others

• Geographical costs include– Situation factors (transporting raw materials to a

factory and finished goods from a factory)– Site factors refer to the unique characteristics of a

location – land, labour and capital

Situation Factors

• To maximize profits, companies try to locate their factories as close as possible to suppliers and consumers to reduce transportation costs

• If inputs are more expensive to transport than outputs, the factory locates near inputs

• If outputs are more expensive to transport, the factory locates near to the market

Location Near Inputs

• Steel Industry– Main inputs coal and

iron ore– Steel mills located close

to the raw materials– Integrated steel mills

processed iron ore, converted coal to coke, made iron into steel & formed steel into sheets, rods & beams

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Integrated Steel Mills in USA

• As demand for steel grew, iron ore imported from Canada & Venezuela resulted in steel mills locating near ports

• Mills in Michigan survived closure because they are located near large markets

Mini Steel Mills in the USA

• Steel mini mills which process scrap steel, have located near markets where their major input is readily available

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Location Near Markets• For some factories, the optimal location is near

markets– Bulk-gaining industries

• Soft-drinking bottling• Brewery• Car assembly plant

– Single market manufacturers• High fashion• Auto part factories (agglomeration industries)

– Perishables• Dairy• Bakery• Newspapers

Transportation

• Inputs & products are transported by– Ship (long distances; bulky

cargo where water exists)– Rail (long distances; bulky)– Road (shorter distances)– Air (most expensive; ideal

for very light, small cargo)

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Break of Bulk Point

• Transportation costs rise each time inputs or products are transferred from one mode of transportation to another (labour & possibly warehousing costs)

• A location where transfer is made from one mode to another is known as a break-of-bulk point

• Ports and airports are important break of bulk points

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An entrépôt port is a port where goods can be importedand re-exported without dutieshaving to be paid e.g.: Bahrain

Site Factors

• Land– Large areas of cheap, flat land available in

suburban or rural areas close to transportation corridors

– Aluminium smelters locate near to sources of cheap electricity as lots of energy is needed to separate the aluminium from the bauxite

– Amenities already available at certain sites, may attract new industries

Site Factors

• Labour– Labour intensive industries locate near to

labour markets• Semi-skilled, cheap labour is used in the textile

and clothing industry (in MDCs the textile industry has been affected by the availability of cheap labour in LDCs)

• Highly skilled, more expensive labour is required for the electronics industry (outsourcing to LDCs is becoming increasingly difficult for MDCs as more educated work forces emerge in countries like India)

Site Factors

• Capital– Manufacturers require capital to establish and

expand their operations– The US auto industry located in Michigan

because that region’s banks were more willing to lend money than east coast banks

– Banks in Silicon Valley willing to offer loans to computer companies, have been key to the growth of software companies which then are attracted to the Valley

Footloose Industries

• Some industries are able to locate wherever they wish as they are not significantly impacted by transportation, land, labour and capital costs

• Communications technologies make this more and more possible e.g.: software development and manufacture (Microsoft in Seattle)

• Optimal location might not always be possible, so an alternative must be chosen (inertia or history)

Why do Industries Face Problems?

• Global Problems– Stagnant demand: capacity to produce goods

has increased faster than demand• Low population growth in MDCs• Quality of products• High prices of products• Changing technology e.g.: lighter vehicles

– Increased capacity• NICs• Subsidized industries e.g.: steel in Europe

Why do Industries Face Problems?• MDCs

– MDCs must protect their markets from new competitors

– LDCs must identify new markets in order to grow industrially

– Trading blocs• Competition within trading blocs e.g.: NAFTA & softwood

lumber dispute• Competition between trading blocs e.g.: NAFTA and EU• Disparities within trading blocs e.g.: Greece, Portugal &

Ireland lack industrial investment

– Transnational corporations• MDC HQ TNC produce goods more cheaply in LDCs

Why do Industries Face Problems?

• LDCs– Distance from markets: wealthy consumers in

MDCs are far from manufacturers in LDCs– Inadequate infrastructure: transportation,

energy, skilled labour, technology– Limited domestic markets– Dependence on raw material exploitation– Outsourcing from MDCs to LDCs by TNCs

(profits return to MDCs)– Political instability

Resource Depletion & Pollution

• Renewable resources are threatened if the rate of exploitation exceeds replacement rate

• Non-renewable resources will eventually run out

• Industrial processes pollute land, air and water

Solutions to Depletion and Pollution

• Sustainable development is resource use that meets present needs without compromising future generations ability to meet their needs

• 3Rs– Reduce– Recycle– Reuse

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