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Unit 7 – Economic Geography II: Industry

38:180 People and Places: An Introduction to Human Geography

‘Industry’ within Economic Geography• Sectoral division of economy (again):

– Primary– Secondary– Tertiary– Quaternary– Quinary

• Focus on Secondary (aka ‘manufacturing’)

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Fig 10.8 Economic Growth and Employment Distribution (corrected)

Fig 10.9 The Changing Structure of World Employment

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Fig 10.10 Percentage of Labour Force in Industry by Country, 2017

Fig 10.11 Percentage of Labour Force in Services by Country, 2017

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The Geography of Industry

• Components of Industry:– labour force– energy supply– market– raw materials– capital

• Each is geographically variable• Plus transport

– places plus movement

The Geography of Industry

• Primary concern is the capitalist economy• How should we analyze location?

– financial motive, ie. the drive to minimize cost• Alfred Weber and the least-cost location

theory:– The Theory of the Location of Industry (1909)

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Alfred Weber

• Assumptions:– Raw materials are either ubiquitous or localized– Labour is localized, immobile but unlimited– Markets are fixed (location and size)– Transport costs are a direct function of weight

and distance– Perfect competition– Isotropic plain– Industrialists are optimizers

• What model emerges?

Alfred Weber

• Goal becomes to minimize transportation costs, which boils down to an analysis of distance and weight (these are inter-related in the model)

• The material index:

• Is M.I. greater or less than 1?– ie. weight losing or weight gaining

product finished of weighttotalinputs localized of weightM.I.

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Alfred Weber

Fig 10.1 A Locational Triangle

AlfredWeber

Fig 13.2 A Simple Isotim Map(from previous edition)

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AlfredWeber

Fig 13.3 An Isodapane Map(from previous edition)

Alfred Weber

• Add:– Labour costs– Agglomeration effects– Deglomeration effects

• Is the theory realistic?– Markets not single/fixed point– Labour not homogeneous– Optimizing behaviour

• Nevertheless, many similarities in real world

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Market Area Analysis

• Focus on maximizing revenue (ie. market area)

• Assume costs relatively similar everywhere• e.g. A. Lösch• e.g. Hotelling?

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The Hotelling Principle

• Both cost and revenue are variable

Smith’s Spatial Margins of Profitability Model

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Process Characteristic Orientation Examples

Physical weight loss Input Smelters; ore beneficiation; dehydration

Physical weight gain Market Soft-drink bottling; manufacture of cement blocks

Bulk loss Input Compressing cotton into high-density bales

Bulk gain Market Assembling automobiles; manufacturing containers; sheet-metal work

Perishability loss Input Canning and preserving food

Perishability gain Market Newspaper and job printing; baking bread and pastry

Fragility loss Input Packing goods for shipment

Fragility gain Market Coking of coal

Hazard loss Input Deodorizing captured skunks; encoding secret intelligence; microfilming records

Hazard gain Market Manufacturing explosives or other dangerous compounds; distilling moonshine whiskey

Some General Orientations

The Problem of Dynamics

• Conditions change over time– Transportation technologies– Raw material sources– Markets

• Do producers move every time a new location becomes better (or the existing location becomes worse)?

• Industrial Inertia– Gradual decline, renewal in long term?

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Behavioural approaches

• Satisficing• Imperfect information• But based on real world• Irrational decisions? Or just different

rationale?– William Morris– Role of ‘opportunity’– The right ‘environment’

• feasible -> conducive -> attractive -> optimal– The role of scale (of production, of firm)

Evolution of Industry and its GeographyBefore the Industrial Revolution:• Cottage industry• Artisanal labour (the ‘trades’)• Local orientation• Not a ‘location problem’, but a cultural-

geographical interpretation of what was• But ‘Marshallian Industrial Districts’

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Evolution of Industry and its GeographyMarshallian Industrial Districts :• Small scale, in small areas, or districts,

within cities and larger towns1) Specialization by many firms in a single

industry2) Rapid and efficient formal and informal

communication3) Pool of skilled labour4) ‘something in the air’, ‘industrial atmosphere’

• Trades highly regulated by guilds

Evolution of Industry and its GeographyThe Industrial Revolution:• New source of energy

– Geographical importance of England’s coal fields

• Organizational change as much as geographical change

• The ‘factory’– From sources of power, to sources of labour

and markets• New division(s) of labour

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Divisions of Labour:• Technical

– Horizontal– Vertical

• Social• Spatial

Coal fields and industry in England

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Evolution of Industry and its GeographyThe Industrial Revolution:• Advances in steel production

– Small scale to large scale– Raw material and forests to energy (coal)

orientation• Emergence of railroad (steam and steel)

– Reduces transportation-cost effect and arguably frees many industries from an overwhelming raw material orientation

– And as conduit for diffusion of the Industrial Revolution

Coalbrookdale

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From small scale forges…

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…to heavy industry

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1940s Pittsburg

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Evolution of Industry and its GeographyFour major world industrial regions by 1950s:• Western and Central Europe• Eastern North America• Russia and the Ukraine• Eastern Asia

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Fig 10.5 Major World Industrial Regions

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Evolution of Industry and its GeographyFour major world industrial regions by 1950s:• Western and Central Europe• Eastern North America• Russia and the Ukraine• Eastern AsiaIndustrialization, urbanization, and

population growthIn summary: 3 major themes: organization,

scale, geography

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Evolution of Industry and its GeographyFordism:• Assembly line• Mass production• Suburbanization of industry• New corporate organization: MNC/TNC• Offshoring

– labour cost/regulation, environmental regulation, taxes

and see Table 10.9 in text.

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Ford’s Oakville Assembly Complex

Evolution of Industry and its GeographyDeindustrialization:• deregulation of trade• containerization• financial deregulation• improved ICT• energy (oil) crises (1970s)Production redistributed globally: a new

spatial division of labour (New International Division of Labour)

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Evolution of Industry and its GeographyDeindustrialization:• reduced role of energy as locational pull• Rust-Belt (industrial abandonment) – US

and elsewhere2 consequences to the geography of industry:• Newly Industrializing Countries (note EPZs)• Sun-Belt (industrial transformation of core

economies)

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Figure 10.7 Special economic zones in China

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