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TRANSCRIPT
Industry
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Definition
Industry – The manufacturing of goods in a factory
Globalization has changed focus, location
Maquiladora – Factories built by U.S. companies in Mexico Near the border Lower labor costs Consumers: price is more
important than origin
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Origins of Industry
Industrial Revolution – Improvements in industrial technology that transformed the process of manufacturing goods N. England/Scotland in
the late 1700s Replaced cottage
industries (home-based manufacturing)
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Origins cont’d
Key: steam engine (1769, James Watt) Could concentrate
whole process in one building
Industries impacted: iron, coal, transportation, textiles, chemicals, food processing
Result: high productivity, better living standards
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Europe
¼ of world’s industrial output
Emerged during the 1800s/early 1900s
Key areas: United Kingdom Rhine-Ruhr Valley
(most important area, iron/steel)
Mid-Rhine (Germany) Po Basin (Italy)
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Europe cont’d
N.E. Spain (fastest-growing, focus: textiles)
Moscow (fabrics) St. Petersburg
(shipbuilding) Volga (petroleum,
natural gas) Urals (minerals) Kuznetsk (coal/iron) Donetsk (Ukraine,
coal, iron, natural gas) Silesia (Poland, steel)
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North America
Arrived later, but grew faster than in Europe
Focus: N.E. U.S., S.E. Canada
Regions: New England (oldest,
textiles) Middle Atlantic (largest) Mohawk Valley (food
processing) Pittsburgh/Lake Erie (steel) Western Great Lakes (cars) S. California (clothing) S.E. Ontario (steel, cars)
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East Asia
Key resource: people Japan
Growth – 1950s/1960s Focus: motor vehicles,
electronics China
Largest supply of low-cost labor
Focus: textiles, steel, household goods
1990s - allowed transnational companies in, led to rapid economic growth
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Situation Factors
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Definition
The transport of materials to and from a factory Key factor in
determining why industries locate in particular places
Goal: minimize cost of transporting inputs (parts/resources) to factory, and finished goods to consumers
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Bulk-Reducing Industry
Industry in which inputs weigh more than the final product
Example: Copper Several steps in
production (mining, smelting, refining)
Need economical energy source for most steps
2/3 of U.S. copper comes from Arizona (proximity to mines is most important)
http://www.mining-technology.com/projects/bingham/images/bing9.jpg
Bulk-Reducing cont’d
Example: Steel Manufactured by
removing impurities and adding elements (manganese, chromium)
Steel mills have been replaced by minimills, which use scrap metal
Proximity to markets is now more important than inputs
http://menofsteelrecycling.com/steelplant.jpg
Bulk-Gaining Industry
Making something that gains volume or weight during production
Example: fabricated metals Brings metals together
and transforms them into a complex product
Most plants locate near markets due to shipping costs
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Bulk-Gaining cont’d
Markets for fabricated metal: TVs, refrigerators, air conditioners, motor vehicles
Beverage production Empty cans/bottles
are filled with liquid, shipped to consumers
Weight adds to shipping costs, so plants are located near markets
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Other Industries
Single-Market Manufacturers Specializers with only
1-2 customers Ex. Motor vehicle parts
Perishable Product Manufacturers Ex. Bread, milk,
newspapers Both industries must
locate close to customers
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How to Transport?
Truck – short-distance, best for one-day delivery
Train – Longer distance, no need for stops
Ship – Low cost, cross-continental
Air – High cost, for small, high-value packages
Break-of-Bulk Point Location where transfer of
travel modes is possible Cost rises with additional
break-of-bulk points
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Site Factors
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Definition
The unique characteristics of a location
Three traditional production factors: Labor Land Capital
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Labor
The most important site factor
Labor-intensive industry Industry in which
wages and other compensation paid to employees constitutes a high percentage of company expenses
Found mainly in LDCs
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Labor cont’d
Example: textiles (woven fabrics)
Step one: spinning Done mainly in LDCs
(China = 2/3 of cotton thread)
Synthetic fibers used in recent years (rayon, nylon, polyester)
Child labor is commonly used
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Labor cont’d
Weaving 93% of weaving is
done in LDCs Low labor costs
offset shipping costs Assembly
4 types of products (garments, carpets, home products, industrial products)
Assembled close to consumers (in MDCs)
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Land
New factories need lots of space (one-story facility)
Likely location: suburban or rural sites
Proximity to major highways is most important Past: railways Present: Semi-trucks
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Land cont’d
Environment Mild climates, year-
round activities can also influence site selection
Also: access to affordable electricity▪ Ex. Alcoa▪ World’s largest aluminum
producer▪ Relies heavily on
hydroelectric power▪ Constructed its own dams
to produce power
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Capital
Key source: borrowed money
Industries located near available capital ‘Auto Alley’ – Michigan,
Indiana, Illinois Silicon Valley –
California (1/4 of all U.S. capital is spent here)
LDCs have great difficulty obtaining capital
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