types of economic activities primary sector activities secondary sector activities tertiary sector...
TRANSCRIPT
Industry Review
Types of Economic Activities
Primary Sector Activities
Secondary Sector Activities
Tertiary Sector Activities
AgricultureRaising
animalsFishingForestryMining
Refining petroleum
Turning metal into tools and automobiles
Manufacturing
TradeFinanceReal EstatePrivate
servicesGovernmentTransportation
“Industrialization and Economic Development” Ch. 11 Industry + Ch. 9
Development
Key Issue 1: Why does development vary among countries?
HDI – Human Development Index Economic - GDP Per capita Social – literacy rate and amount of education Demographic – life expectancy
Human Development Index
Where did industry originate?
What did Europe look like prior to the Industrial Revolution?
• Home based manufacturing (known as cottage industry)
• On a small scale
The Industrial RevolutionB. Why did it begin in Great
Britain? capitalist system
guilds had created a middle class of workmen
people free to form businesses
education patent system encouraged
development labor:
Jethro Tull’s seed drill (1701) and other developments > improved productivity in farming > people can leave farms and work elsewhere
B. Why did it begin in Great Britain? (CONT)3. raw materials (iron ore,
coal)
4. rivers, canals, harbors (ease in trade)
5. small, compact size (iron and coal near rivers and harbors)
6. existing banking system (borrow $ to buy machinery)
7. stable political system
8. colonies (guaranteed markets, additional raw materials)
Flow of Capital into Europe, 1775Needed flow of capital in order to fuel the industrial revolution.
Important Innovation 1 The Steam Engine
Patented by James Watt in 1769
Was the first (there had been steam engines in ancient times) to be able to make one efficient enough to power other things than itself
Important Innovation 2 Puddling and rolling of
iron By Henry Cort in 1783 Iron purification
process that increased the manufacture of iron
Puddling furnace
Important Innovation 3 Railways or “iron horse”
Two key inventions: A locomotive using Watt’s steam engine Iron track
The Rocket
Important Innovation 4 Chemicals
Sulfuric acid, chlorine gas and lime, vitriol
Today, the largest textile factories are owned by chemical companies
Important Innovation 5 Food preservation techniques
Canning by Nicholas Appert (done in glass jars) Peter Durand’s tin can
D. Effects– economic: more
goods at lower prices
– social: available labor leaves farms and clusters in cities • urban blight, pollution• canned food
(encourages new industry)
– political: surplus labor > mistreated workers > liberalism and communism
D. Effects4. technological: >
railroad, steamship 5. agricultural: > 2nd
Agricultural Revolution • increased
productivity• use of machinery >
larger farms > enclosures
6. demographic: caused move from Stage 1 to Stage 2 of DTM
Where is industry distributed? Key Issue #2
Diffusion of Industrial Revolution
Early diffusion eastward to Belgium, France, and Germany (early
1800s; delay due to Napoleonic Wars) further diffusion to Italy, Netherlands, Russia and
Sweden by late 1800s U.S. not affected by political instability in Europe:
diffusion by early 1800s 8,000 spindles of textiles in 1808 > 80,000 spindles by
1811 by Civil War, U.S. was world’s 2nd largest industrial
power
Why do industries have different distributions?
Weber’s Model for the Location of Industry
Transportation Labor Agglomeration
It is more expensive to move raw materials than it is to move final products.
Short distances = use a truckMedium distances = use a trainLong distances = use a ship
You can locate your business further from market if the labor costs make up for the cost of the added distance
If several industries cluster in one city, they can share talent, services and facilities.
Situation Factors
Bulk gaining
Bulk reducing
Single-market manufacturers
Site Factors
Costs of land, labor and capital
Labor intensive industries look for cheap labor
Footloose industries are so expensive to produce on their own that transportation to and from markets or factories is negligible
Situation factors
Inputs Factory Consumers
Each industry has to consider what costs more: to transport inputs or to transport the final product to consumers?
Factories are located to REDUCE cost
Other types of plants
Single-market manufacturers Make specialized parts to
go into larger products Located near the
consumer
Perishable Products Located near the
consumer Exs mostly include
fresh foods Newspapers (kinda)
How do inputs and products get from place to place?
• Short answer:– Trucks– Trains– Ships– Air
Important points Often times modes
get mixed (might use planes and trucks etc.)
Costs rise every time you switch from one mode to the next
Break of bulk point- places like seaports and airports where you can transfer from one mode to the next easily
Land factors Factories likely to be located in suburbs and rural areas
Energy sources play a key role (are you next to hydroelectric power? Are you near coal fields?)
Labor factors Is your industry labor
intensive? Do you pay a high percentage in wage? (note percentage does not equal high wages)
Capital Industry will
locate where it is able to get capital from banks
Industrial Regions of the World
Primary Industrial Regions
Western and Central Europe
Eastern North America
Russia and the Ukraine
Eastern Asia
Secondary Industrial Regions
Venezuela, Argentina, Brazil in South America
South Africa and Nigeria in Africa
Coastal areas and the Ganges River are of India, Malaysia, and southern Australia
Economic Organizations NAFTA- North American Free Trade Agreement- Mexico,
US and Canada (helps explain the new international division of labor where some components of products are made in one country and others in another)
The European Union- Most barriers to trade have been eliminated among them members of the EU. Countries that are not a part of the EU (Switzerland and Sweden) rely heavily on trade with the EU countries.
East Asia does not have its own formal organization but it is an important trading bloc.
ASEAN – Southeast Asian version of NAFTA.
What is deindustrialization and who is going through
it? More developed countries are decreasing
the total number of manufacturing jobs in favor of service industry jobs
The United States and Europe are experiencing this
Japan is joining in this along with the Four Tiger economies (Hong Kong, South Korea, Singapore and Taiwan)
Why are there disparities between countries? What challenges exist
for LDCs?
Distance from markets
Inadequate infrastructure
Competition with existing manufacturers in other countries
Demographic Transition Model
Theories of Economic Development- Rostow’s Modernization Theory
Theories of Economic Development- Wallerstein’s
Dependency Theory
Core
cou
ntr
ies • Rich
nations fuel the world’s economy and take raw materials from the rest of the world
Peri
ph
ery
cou
ntr
ies • Colonialis
m drew in low income countries that support the rich via cheap labor and a large market for industrial products
Cou
ntr
ies
of
Sem
iperi
ph
ery • These
countries are somewhere in between. They are still dominated by the core.