Industrial production began long before the Industrial Revolution Goods and products were made in numerous

places

Most interesting relationship was Britain & India (their colony) ▪ India’s products became so good that Britain tried to cut

off Indian imports

Commercial companies either started or urged European colonialism in many places

1700s

New energy sources emerged (coal)

New machines improved efficiency (steam engine) Late 1700s/Early 1800s

Flow of capital began from the colonies

Increased capital led to increased investment

▪ Which led to an invention boom

Coal was used to smelt iron & in making cast iron

Steam engine led to high speed thread spinning; as well as the emergence of the railroad & faster ocean shipping

Flow of Capital into Europe, 1775 Needed flow of capital in order to fuel the industrial revolution.

Britain was really the only country to initially benefit from these innovations

Held a monopoly over certain goods

Was the only continent to really possess the skills necessary to make this machinery

The first manufacturing plants were built close to coal fields & close to a canal or river travel system

Eventually this manufacturing development diffused eastward in Europe to places like Germany

Consequently many cities emerged as major port cities…none more so than Rotterdam in the Netherlands

Diffusion of Industrial

Revolution

Many “location theories” exist

These are theories that try to predict where businesses will or should be located

These are much more complicated than von Thunen’s model

Von Thunen’s work focuses on primary economic activities(farming, sales of agricultural products/meat/dairy/etc)

Location theories try to include all economic activities(secondary, tertiary, quaternary, quinary)

Assumption is that each company tries to maximize their advantages in an effort to increase profit

Examples of these assumptions/goals:

Decrease production cost

Decrease energy usage

Decrease labor cost

Decrease time of transport

▪ Fancy term is “friction of distance”, which means that as distance increases, the time & cost will increase

Picking a location that allows for easier production & transport

Picking a location where resources are plentiful These are aspects of von Thunen’s model as well

But again, his focus was on agriculture

Theory #1:

Alfred Weber’s model---”Least Cost Theory”

▪ His model explains why manufacturing plants are placed where they are(his model is to secondary activities as von Thunen’s is to primary activities)

▪ The location of a manufacturing plant is based on the owner’s desire to minimize three categories of costs

▪ http://teacherweb.ftl.pinecrest.edu/snyderd/APHG/Unit%207/weber.htm

Three categories

1)Transportation---site must create the lowest possible cost of moving raw materials TO the factory and finished products FROM the factory to market

2)Labor---cheaper the labor the better

3)Agglomeration---means the more companies & businesses that are nearby means the more assistance they can provide

▪ Sometimes too much agglomeration can lead to higher rents, rising wages nearby and other problems---some factories therefore leave those places(this is called “deglomeration”)

A major element of Least Cost Theory is weight

How much do the resources weigh?

How much does the finished product weigh?

If there are multiple resources, which one weighs more?

▪ All of these things have a huge impact on manufacturing plant placement

Theory #2:

Harold Hotelling’s model

▪ Focused on the issue of “locational interdependence”

▪ Location of an industry cannot be understood without reference to the location of other industries just like it

▪ #1 goal is to maximize sales

▪ http://ingrimayne.com/econ/International/Hotelling.html

The

Hotelling

Model

Added the spatial influence of consumer demand and production costs to calculating manufacturing plants

These major models, along with others, try to explain where industries are located

Before the 1950s and 1960s, the major costs for industries were transportation costs of raw materials & shipment of finished products

Therefore, most manufacturing areas were close to raw materials & transportation routes

Four major ones were initially Western/Central Europe, Eastern North America, Russia/Ukraine & East Asia

One major additional cost to transportation is called “break-of-bulk point” cost

Costs of transporting cargo from one mode of transportation (like a ship) to another form (like a truck or train)

BREAK INTO GROUPS…EACH GROUP READS ABOUT A SECTION AND

TEACHES THE CLASS

Group 1: 390 (Western & Central Europe to where it says North America)

Group 2: 391-395 (North America to where it says former Soviet Union)

Group 3: 395 (The Former Soviet Union to where it says Eastern Asia)

Group 4: 395-398 (Eastern Asia)