unit 3 industrial territory

The Industrial TerritoryUnit 3

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LEARNHOW TOHEALTHE WORLD

The Industrial Territory

•An industrial territory is a space organized around a

concentration of factories that contribute to the economic

development of a region.

•The production associated with the industrial territory has a

positive and negative impact on the environment.



Industrialization

•Industry is all the economic activities related to the production

of material goods. Until the end of the 18th century, most goods

were made by skilled tradespeople.

•Today, most of the goods we consume comes from factories

that transform raw materials (wood, iron, metals, etc…) into an

infinite number of products.

•The location of companies is not simply a matter of chance.

Company executives choose the place that seems most

advantageous to them.



Economic Activity Sectors and Industrialization

Primary Sector Tertiary Sector

Secondary Sector



The Three Sectors and Industrialization

•The Primary Sector: includes resource development activities

like Agriculture, Mining, Fishing, etc…)

• The Secondary Sector: mainly composed of activities that

convert raw materials into consumer products. Activities in this

sector are carried out in the factories of industrial companies.

Several major categories of secondary industries exist like the

automobile industry, textile industry, agri-food industry, etc…

•The Tertiary Sector: Brings together activities that purchase

services, such as commerce, transport, health, education,

communications, administration, etc…



Technology and Industrialization

Steam Engine 1769 Mechanical Loom 1800

Steam Locomotive1815

Electric Power Plant 1882

The Computer1951



Technology and Industrialization•Human beings have always been able to take advantage of the environments they live in. They learned to exploit land, water and forests and transformed the resources available to feed, clothe and shelter themselves.

•The entire set of changes brought about by industrial activity is called Industrialization.

•Industrialization began in Europe at the end of the 18th century, with the industrial revolution.

•The concentration of many workers in the same place, a consequence of Urbanization, greatly contributed to this rapid development.

•The many technical innovations in different fields, the new energy sources (coal, electricity and oil) and the availability of capital also played an essential role in this process.

•Industrialization then spread gradually to other parts of the world.



The Location of an Industrial Company



The Company

•Like all businesses, industrial companies are looking for

returns, in other words, PROFITS.

•The following formula allows us to calculate profits:

– Revenue from Sale – Production Costs = PROFITS

•Companies look for maximum returns by aiming for high sales

revenues and the lowest possible production costs.

•To do this, they must take into account the cost of the

necessary resources, labour, etc… in order to produce goods

that meet consumer’s needs.

•Choosing a good site contributes to increasing a company’s

returns.



The Effect of Industrialization



The Effects of Industrialization

• The Industrial sector promotes the development of many other sectors, such as how the automobile industry promoted gas stations, roads, car washes, etc…

• As cities become industrialized, they become urbanized. Working-class residential neighborhoods, were built near to industrial districts because, at the time, most workers traveled by foot.

• These working-class neighborhoods were noisy and polluted by waste from factories.

• During the last century, factories have dumped over 30,000 toxic chemicals into the waters of the great lakes.

• This pollution has reached the St-Lawrence River and contaminated the food chain of the animals that live there.



The Effects of Industrialization

• An industrial park is a space designed to accommodate manufacturing, distribution and service companies.

• Concentration of these activities is an asset for companies which see opportunities there for exchanging raw materials, products and services.

• In the past, industrial zones stretched out near city centers. Modern industrial parks are instead built in the suburbs or in the outskirts of major urban centres.



Our World and Its Issues



Our World and It’s Issues

• The efficiency of transportation and communication networks in this day and age has done away with distances.

• Canada’s aeronautics companies manufacture equipment for Japanese aviation plants.

• Workers in Thailand assemble computer for American companies, who sell them to consumers in Quebec.

• Multinationals in industrialized countries have equipment parts built for them in developing countries. This is called Out-Sourcing



Industrialization around the World



The World’s Major Industrial Regions

• The first countries to be industrialized are now countries in which the standard of living is high.

• In these industrialized countries, industries supply many of the goods that people need.

• The U.N. has acknowledged that industrialization is a way for developing countries and least-developed countries to reduce poverty and take their place in the world economy.

• Yet, according to the UN, the economies of these countries are still overly dependent on the exploitation, and not enough on the processing, of their natural resources. Moreover, their labour forces are not sufficiently qualified.



Industrialization around the World

Aerospace industry in Canada

Automotive industry in China

Biotechnology industry in the U.S.

Textile industry in Ethiopia



Different Types of Industries

• Canada is one of the most industrialized countries in the world, it is a giant in the Aerospace industry. It’s literacy rate is 99% and GDP/Capita (purchasing power) is $38,495

• China is the world’s top producer of Steel which supply numerous industries including the automotive industry which allows China to produce 400,000 automobiles every three months. China has a literacy rate of 92% and a GDP of only $6,642.

• Although Ethiopia is still underdeveloped in industrial activities. The country is experiencing good industrial growth in the textile industry. The literacy rate is 42% and the GDP is $800.

• The U.S. Is the leader of the Biotechnology industry, a 55 Billion dollar industry. It has a literacy rate of 99% and a GDP/capita of $40,540.



A New Economic Context: Globalization



A Multi-National

• Canada is one of the most industrialized countries in the world, it is a giant in the Aerospace industry. It’s literacy rate is 99% and GDP/Capita (purchasing power) is $38,495

• China is the world’s top producer of Steel which supply numerous industries including the automotive industry which allows China to produce 400,000 automobiles every three months. China has a literacy rate of 92% and a GDP of only $6,642.

• Although Ethiopia is still underdeveloped in industrial activities. The country is experiencing good industrial growth in the textile industry. The literacy rate is 42% and the GDP is $800.

• The U.S. Is the leader of the Biotechnology industry, a 55 Billion dollar industry. It has a literacy rate of 99% and a GDP/capita of $40,540.



A Multinational

• Bombardier, the famous Quebec Company is today a multinational.

• The company’s activities range from design to commercialization.

• The company’s head office is located in Montreal, but its activities in manufacturing and its distributing products and services take place globally.



The International Division of Labour

• The international division of labour is the sharing of production activities among different countries.

• Stages in manufacturing are distributed to the four corners of the Earth, then the product is assembled in the home country of the company, which also sees to its commercialization.

• Competition in the automobile industry allow the consumer to choose the car with the most advantages at the lowest price.

• In a competitive context, each company tries to reduce its production costs in order to offer an affordable product, while at the same time maximize its profits.

• To do this, multinationals have their parts manufactured in countries where resources cost the least: low-paid labour, inexpensive raw materials, etc…



Relocation: a Solution?

• Countries from here and elsewhere fight over markets. To stay or to become competitive many of them do not hesitate to turn towards developing countries to have their production activities carried out.

• To reduce labour costs, companies look for countries that have low minimum wage and allow long working hours which they cannot get within their own country, thus exploiting cheap labour.

• A growing number of major European and American industrial companies are setting up in Asia and South America, where labour is cheap.

• The relocation of the company’s activities has major consequences: workers lose their jobs, governments suffer a decrease in their tax revenues, merchants are affected by the reduced purchasing power of unemployed workers.



From an Export Processing Zone to a Clothing Shop

• The manufacturing sector is central to globalization. Big companies negotiate agreements with subcontractors to have their products manufactured in developing countries.

• These companies don’t hesitate to shop these agreements around from one country to another, preventing workers’ working conditions from improving, since export processing zones are in competition with each other to get those contracts.

• A number of UN members states have signed the Declaration of the Rights of the Child, which specifies that “The child shall not be admitted to employment before the appropriate minimum age”

• Nevertheless, the number of children aged 5 to 14 who work in developing countries is estimated at about 200 million.



Free-Trade

• A free-trade zone, that is, a place where customs taxes do not apply, extends along the United States-Mexico border.

• Hundreds of thousands of people have migrated to this zone to find work. Companies have merchandise produced there for export.

• The high concentration of industrial activities pollutes the environment in this zone and exposes its population to serious health problems. The situation is worsened by the absence of regulation and effective monitoring.

• China and Mexico have had an economic boom generated by relocation of these companies, but have been ignoring worker’s rights.

• Multinationals have threatened companies in developing countries because they cannot compete.



• Canada and the United States, concerned about protecting its reputation and its revenues, some companies have decided to rectify the situation.

• They are inspecting factories and replaced subcontractors that did not abide with proper labour standards with subcontractors that provided employees with better working conditions and fringe benefits.

• While there is still progress to be made, denouncing the situation allowed the number of factories at fault to drop.

• Where are your products made? Check!!

A Multinational Charges its Strategy



Industrial Territories and Their Issues

The American and Canadian Great Lakes Region



• Canada and the United States are among the world’s most industrialized countries.

• Many national and multinational companies in the industrial sector have their head offices there.

• In most industrialized countries, products have to meet manufacturing standards, and entrepreneurs must respect environmental standards. Competition also requires companies to offer their products at competitive prices.

• Industrialized territories in industrialized countries therefore face two challenges: to produce goods while abiding by environmental standards and to maintain their place in the world economy, where competition is increasingly strong.

Industrial Territories and Their Issues



• The American and Canadian Great Lakes region extends along each side of the border between Canada and the United States, in eastern North America.

• There is a large concentration of population here. Approximately 10% of Americans and 30% of Canadians live in the Great Lakes region, where colonists settled beginning in the 17th century.

• Today, this region is still densely populated. The Great Lakes region has a variety of transportation infrastructures that facilitate the shipment of raw materials and goods.

The American and Canadian Great Lakes Region



• Like all major industrial regions, that of the Great Lakes owes its development to abundant natural resources; fertile soil, dense forests and mineral deposits.

• The presence of iron (raw material) and coal greatly fostered the rapid development of the automobile and steel production industries.

• The three North American automobile giants have long concentrated their production in the region.

The Industrial Sector in the Suburbs of Detroit Michigan



• Inaugurated in 1959, the Great Lakes St. Lawrence Seaway links the Atlantic Ocean to the network of the Great Lakes via a series of locks and canals.

• Every year, over 180 million tonnes of goods is shipped through the vast maritime networks: iron ore, coal, grain crops, cement, salt, iron and steel products, heavy equipment, etc…

The Great Lakes St. Lawrence Seaway



Robotics



• In the 1970’s, Japanese competition hit the automotive industry of the Great Lakes region very hard.

• Japanese manufacturers had succeeded in taking over a significant share of the market by offering more compact models that conserved less energy. They easily won over consumers who had been hit with an oil crisis.

• In order to complete with the Japanese, North American companies used robotics to make the production of automobiles more efficient.

Maintaining its Place in the World Economy



• Transportation industries consume , 70% of the steel produced worldwide. As a result, the steel production and automotive industries are closely linked.

• China is now a strong competitor of the Great Lakes region in the areas of automobile and steel production and South Korea soon will be.

• To counter the competition, American and Canadian manufactures bought Asian companies, particularly in South Korea.

• Production in Asia of compact models better suited to the needs of consumers appears to be a good strategy.

• Although sales abroad have boomed, the workers in North America and Canada do not benefit and many plants have been closed as a result.

World Steel Production



Harmonizing Industry and The Environment



• Every year, about 2000 industrial facilities in the Great Lakes region discharge over 100 000 tonnes of toxic substances. These are released into the air by factory smokestacks 95% and into the lakes where waste water end up (5%)

• Atmospheric pollutants mix with the water droplets present in the atmosphere. Blown by prevailing winds, they are carried over long distances towards North America before falling back to the ground in the form of acid rain.

• Since 1980, new environmental regulations have encouraged factories to reduce their emissions of pollutants, which has resulted in a reduction in the acidity of rain.

Harmonizing Industry and the Environment



• The industrial development of the Great Lakes region is very closely tied to coal, which allows thermal power plants to produce the electricity that the industrial sector needs.

• In 2003, the U.S. EPA gave thermal power plants 5 years to reduce their mercury emissions by 90%. Industry complained that these restrictions were too harsh, the EPA backed down and reduced it to 70%.

• This change was not acceptable to groups that champion the environment and community health.

Mercury Pollution



The Saguenay-Lac-Saint-Jean Region in Quebec

The Saguenay-Lac-Saint-Jean Region in Quebec



• The Saguenay-Lac-Saint-Jean has abundant Natural resources. Its dense forests and rivers are the source of the region’s industrial development.

• Located 200km North of Quebec City, the region seems isolated, but it is well equipped with transportation infrastructure such as waterways with two ports for ships, a road network and a railway link the cities of the region with the rest of Quebec.

• To reduce electricity costs, the Alcan aluminum smelter located its plants near rivers and built their own hydroelectric power plants. This is a great advantage, because energy represents 35% of the cost of aluminum production.

The Saguenay-Lac-Saint-Jean Region



• The Aluminum industry produces dangerous waste, spent brasque, which must be disposed of. Brasque is solid chemical residue from the pots that are used to produce aluminum.

• Following environmental measures adopted by governments, Quebec’s aluminum smelters have reduced their discharge of toxic substances and dust and have improved the safety of storage sites. Quebec has reduced production of residues by 60%.

• Paper manufactures discharge enormous amounts of waste water containing wood fibre and toxic substances, among other things. This discharge poses a threat to aquatic ecosystems.

• Quebec paper manufacturers have reduced the amount of water needed to produce a tonne of paper or cardboard by 52%

Industry and Environmental Problems



• Pulp and Paper multinationals want modern, more productive factories, cheaper raw materials and labour, conditions that exist in certain developing countries.

• For this reason, they are closing less productive plants in industrialized countries, particularly in Saguenay-Lac-St-Jean.

Maintaining Its Place in the World Economy



• Primary aluminum has long been an important product for export from Saguenay-Lac-St-Jean. Today, modernization and international competition and are eliminating jobs in this sector. It appears that the future of the region now depends on companies that process aluminum into other products.

• About 20 companies are already manufacturing new products made of aluminum such as bikes, bumpers, bathroom fans, etc…

• The goal is to train a specialized labour force and promote a concentration of high technology centres and companies that will process aluminum on site instead of exporting it

Maintaining Its Place in the World Economy



• With globalization, a large variety of products move around the world. To play a role in the world economy, the region must gear its production toward international markets.

• The main exports from the region are wood products, machinery and transportation equipment and metal products.

• In 2002, Saguenay-Lac-Saint-Jean exported 1.7 billion worth of products, for an increase of 30% over the previous year.

• The region has a considerable advantage over other regions in the world:

• Multinationals are already established in the area• Companies that are favorable to their development, they will

stay• Small and medium businesses can also benefit from the same

conditions

Exports from the Saguenay-Lac-Saint-Jean region

unit 3 industrial territory

Education