Ap human geography definition and examples of primary sector

What is industrialization? How has industrialization grown and diffused over space and time?

The changing roles of energy and technology

Industrial Revolution

Models of Economic development: Rostow's Stages of Economic Growth and Wallerstein's World Systems Theory

Geographic critiques of models of industrial location: bid rent, Weber's comparative costs of transportation and industrial location in relation to resources, location of retailing and service industries, and local economic development within competitive global systems of corporations and finance

On smaller scales, economic geographers also study the factors that determine where specific economic activities take place. All industries locate their production facilities based on the following geographic factors:

Must provide easy access to the materials necessary for production

Must have an adequate supply of labor – either inexpensive or skilled

Must have Proximity to shipping and markets

Minimize production costs – cheap labor and land.

Natural factors such as climate, need to be considered

The firm’s history and its leaders’ personal inclinations – what they want

Two types of production costs:

SITUATION FACTORS – deal mainly with transportation – bringing raw materials or parts to factory, and shipping finished goods to consumers.

BULK-REDUCING INDUSTRY – locate factories close to raw materials because the raw materials are heavier than finished product.

BULK-GAINING INDUSTRY – locations are usually determined by accessibility to the consumers.

SINGLE-MARKET MANUFACTURERS – cluster near the markets – perishable products located close to large URBAN markets (von THÜNEN MODEL)

VARIABLE COSTS – energy, labor, and transportation is less expensive in some areas than others encouraging industries to develop

FRICTION OF DISTANCE – the cost of transporting raw materials goes ups the farther the distance from source to factory – at some point, the distance is too great for practical transportation.

DISTANCE DECAY – industries are more likely to serve markets of nearby places than those far away.

Transportation costs (both raw materials and finished product),.

FOOTLOOSE FIRMS – some industries do not have to be located near their raw materials or markets, since their products are so lightweight and valuable (ie: diamond and computer chip markets) – exception to Weber’s theory.

SPATIALLY FIXED COSTS – do not change despite where the product is assembled – exception to Weber’s theory.

SPATIALLY VARIABLE COSTS which change depending on where the products are produced.

ANCILLARY ACTIVITIES – economic activities that surround and support large-scale industries – shipping to food service.

DEGLOMERATION – firms leave an agglomerated region to start up in a distant, new place.

REGIONALIZATION – agglomeration is part of a larger pattern of regionalization processes that occur in every nation’s economy. Regionalization is the process by which specific regions acquire characteristics that differentiate them from others within the same country.

The primary MANUFACTURING REGION in the U.S. has historically been the Great Lakes region.

While some regions experience economic gains from regionalization, others may become ECONOMIC BACKWATERS (BACKWASH EFFECT) – lag behind or even recede.

Of all the phrases used to explain the world’s current political and economic trends, GLOBALIZATION is probably the most commonly abused. GLOBALIZATION is the idea that the world is being integrated on a global scale such that smaller scales of political and economic life are becoming obsolete.

Some people argue that globalization is knocking down social barriers, decreasing the meaningfulness of space, and rendering geographic diversity a thing of the past. As the world becomes fully globalized, they say, location will lose its meaning, and people everywhere will have the same access to standardized goods, services, and information.

GLOBALIZATION has, however, had a long and circuitous history from the Renaissance, to the INDUSTRIAL REVOLUTION with periods of interconnections. The current period of globalization is simply the most recent manifestation of a trend that seems to be repeating itself over time. What makes this time period unique is the near instantaneous connections with increased telecommunications technology (Internet). The increasingly rapid flow of innovations, information, and capital may have profound implications for regulating economic flows across borders and across the world.

Others oppose the idea of GLOBALIZATION on the basis of its exclusivity. It has not fulfilled its promise of providing standardized, high-quality goods and services, nor has it improved the lives of the world’s poorest people, many of whom still remain isolated from economic growth. Critics say that MULTINATIONAL CORPORATIONS have little stake in local communities and ecosystems, and time-honored cultural practices.

GLOBALIZATION proponents say that the global economic system will give previously marginalized people more economic power, raise the overall standard of living, increase the accountability of governments, and enable greater access to information.

CORE-PERIPHERY MODEL – one pattern evident in all measures of economic development is the division of the world’s countries into a global economic CORE, SEMI-PERIPHERY, and PERIPHERY. Core-periphery modelsare based on the observation that within many spatial systems sharp territorial contrasts exist in wealth, economic advancement, and growth-"development"- between economic heartlands and outlying subordinate zones.

CORE = most of Europe, Japan, the U.S., Canada, Australia, New Zealand. Contain WORLD CITIES – London, Tokyo, New York – serve as global centers of economic activity. “FAST WORLD”

SEMI-PERIPHERY – newly industrialized countries with the median standards of living – Chile, Brazil, India, China, and Indonesia. Extreme gaps between rich and poor.

PERIPHERY – world’s less-developed countries – Africa (except South Africa), and parts of South America and Asia. Low standards of economic productivity and generally low standards of living. Lack infrastructure. “SLOW WORLD”

The world economy has one market and a global division of labor. The world economy is CAPITALIST or market economy. COMMODIFICATION is the process of placing a price on a good and then buying, selling, and trading the good. To generate a profit, producers seek the cheapest labor, drawing from the globe.

Although the world has multiple states, almost everything takes place within the context of the world economy. The economies of the world are tied together, generating intended and unintended consequences that fundamentally change places. COLONIALISM set up this system.

The world economy has a three-tier structure – places and processes:

CORE processes incorporate higher levels of education, higher salaries, and more technology – core processes generate more wealth in the world economy

PERIPHERY processes incorporate lower levels of education, lower salaries and less technology – generate less wealth in the world economy.

SEMI-PERIPHERY – places where core and periphery processes are both occurring – places that are exploited by the core, but in turn exploit the periphery.

What are the contemporary patterns and impacts of industrialization and development?

INDUSTRIALIZATION has always been a major theme in ECONOMIC GEOGRAPHY, and any discussion of the geography of industry must start with the INDUSTRIAL REVOLUTION in the 1700s:

Replaced COTTAGE INDUSTRIES with mass production and assembly lines called FORDISM.

Social changes – rise of wage labor and large-scale URBANIZATION.

DIFFUSION of knowledge and technology

ORIGIN – Britian across to France and Germany

Shifting to information and SERVICE-BASED ECONOMIES – focused on research and development, marketing, tourism, sales, and telecommunications – requires more education and extensive, specialized training from employees. Former factory workers are finding themselves jobless and with few economic options.

DEINDUSTRIALIZATION is the process of industrial faculties leaving an area, taking that region’s economic base with them. (Ex: GM moving from Flint, Michigan to Mexico). An interesting aspect of deindustrialization is that is has highly regionalized effects – the entire U.S. did not suffer directly from GM’s move. The Great Lakes region is now called the RUST BELT because of idle factories. When on region’s economic gain translates into another’s economic loss, it is called a BACK-WASH EFFECT.

An economic revolution between 1960-1990 was the high-tech boom and the introduction of E-COMMERCE (selling things on-line). Many thought they would replace BRICK-AND-MORTAR BUSINESSES (actual stores where people could shop). One problem of E-COMMERCE is TRANSACTION COSTS – cost of delivery of goods.

Rise of TRANSNATIONAL CORPORATIONS or multinational corporations – take advantage of geographic differences in wages, labor laws, environmental regulations, taxes, and the distribution of natural resources by locating various aspects of their production in different countries.

Many transnational corporations are also CONGLOMERATE CORPORATIONS = firms that are comprised of many smaller firms that serve different functions.

BULK GAINING INDUSTRIES – weight is greater after assembly and tends to have production centers close to their markets.

BULK REDUCING INDUSTRIES – final product weighs less than its constituent parts.

BREAK-BULK POINT is a PLACE, such as a port, where large shipments of goods are broken up into smaller containers to ship to local markets.

What is development? What are the social and economic measurements?

Gross Domestic Product (GDP) and GDP per capita

Human Development Index

Gender Inequality Index

Income disparity and the Gini coefficient

Changes in fertility and mortality

Access to health care, education, utilities and sanitation

ECONOMIC SECTORS:

PRIMARY ECONOMIC ACTIVITIES involve the harvest or extraction of raw materials (Ex: fishing, agriculture, ranching, and mining). Started about 10,000 years ago with the AGRICULTURAL REVOLUTION. Farming is the major occupation in many countries of the world.

SECONDARY ECONOMIC ACTIVITIES are generally associated with the assembly of raw materials into goods for consumption (Ex: heavy industry, manufacturing, and textile production). Started with the INDUSTRIAL REVOLUTION. It has changed lifestyles, values, beliefs and customs.

TERTIARY ECONOMIC ACTIVITIES involve the exchange of goods produced in secondary activities (Ex: retailing, restaurants, other basic service jobs). Began with POST-INDUSTRIAL SOCIETIES. It changes the occupational structure.

QUATERNARY ECONOMIC ACTIVITIES include research and development, teaching, tourism – the generating or exchanging of knowledge.

QUINARY ECONOMIC ACTIVITIES are generally considered a subset of quaternary activities and are those that involve high-level decision making and scientific research.

COMPRESSED MODERNITY – rapid economic and political change

MODERNIZATION MODEL or Westernization Model) – Max Weber – Any country that wants its economy to grow should study the paths taken by industrialized nations, and logically they too can reap the benefits of modernization, or “westernization.” Modernization theory identifies tradition as the greatest barrier to economic development. In societies with strong family systems and a reverence for the past, the culture discourages people from adopting new technologies that would raise their standard of living.

DEPENDENCY THEORY – Put primary responsibility for global poverty on rich nations. Economic development of many countries in the world is blocked by the fact that industrialized nations exploit them. This theory is an outgrowth of MARXISM. Problems cannot be solved by westernization for must be addressed by establishing independence. In reaction to this theory, many LDCs have experimented with forms of SOCIALISM to narrow the gap between the rich and the poor.

STRUCTURALIST THEORIES – argue that less-developed countries are locked into a vicious cycle of entrenched underdevelopment by the global economic system that supports an unequal structure.

Stage 1 – TRADITIONAL STAGE: The country’s economy is dominated by primary activities – productivity, technological innovation, and per capita incomes remain low.

Stage 2 – TAKE-OFF STAGE: Preconditions for economic development arise, including the commercialization of agriculture and increased exploitation of raw materials.

Stage 3 – DRIVE TO TECHNOLOGICAL MATURITY: Foreign investment pours in, jumpstarting an economy that was already prepped for growth. A large proportion of foreign investment goes to infrastructure improvements, such as building roads and canals.

Stage 4 – HIGH MASS CONSUMPTION: The country develops a broad manufacturing and commercial base.

Stage 5: High per capita incomes and high levels of mass consumption

ECONOMIC MEASURES OF DEVELOPMENT:

GROSS NATIONAL PRODUCT (GNP) – a measure of all goods and services produced by a country in a year, including those generated from its investments abroad. Provides a rather broad vision of PRODUCTIVITY. It assumes that development can be measured simply in monetary terms and that any productivity is good productivity, both of which are highly debatable ideas.

Value is stated in U.S. dollars and does not account for the money value of all the goods produced by subsistence economies – systematically reports lower values for productivity in the developing world.

To solve this problem, economists have developed a new measure called the PURCHASING POWER PARITY (PPP) – accounts for what money actually buys within different countries.

GNP fails to account for capital that is lost through the exploitation of natural resources.

GROSS DOMESTIC PRODUCT (GDP) – similar to GNP except that it omits investments abroad. For a country like Japan which has extensive investments aboard the GNP would be significantly larger than the GDP. GDP Per Capita is strongly related to many social characteristics, including literacy rates and educational levels, since economic development is dependent on a skilled workforce.

NET NATIONAL PRODUCT (NNP) is a measure of all goods and services produced by a country in a year, including production from its investments minus the loss or degradation of natural resource capital as a result of productivity. The problem with NNP is that the dollar value of resources lost is hard to calculate.

Other Economic Measures of Development: per capita energy consumption; types of jobs; worker productivity – (VALUE ADDED), access to raw materials, availability of consumer goods, etc.

BIG MAC INDEX – compares the prices of a Big Mac throughout the world (see REA, pg. 284)–also used to evaluate exchange rates.

HUMAN DEVELOPMENT INDEX: one example of an alternate measure of development. HDI calculates development not in terms of money or production, but in terms of human welfare. On a global scale, the pattern of human development closely matches that of the GNP. According to the UN, the HDI is based on the idea that development is a process of expanding choice. It is based on: (1) GDP per capita, (2) life expectancy; (3) educational level attained; (4) literacy rates. The highest score is a 1.0. In 2006 Norway was the highest with 0.965 and Niger was the lowest with 0.311.

GENDER EQUITY – important measure of human welfare that is not necessarily correlated with GNP.

The process of developing has been a great struggle for many countries, and many adverse side effects have results. Developing countries often contain extreme social and economic inequality. Is this just a “growing pain” or will inequality continue? Another problem with development is that economic growth is probably not sustainable in the future because of limited nonrenewable resources. Other adverse side effect is pollution.

Reducing the DEVELOPMENT GAP:

SELF-SUFFICIENCY: the ability to provide for its own people, independent from foreign economies. A country should spread its investments and development equally across all sectors of its economy and regions. RURAL areas must develop along with URBAN areas; poverty must be reduced across the entire country. Favors a closed economic state where imports are limited and heavily taxed. Drawback is corruption and inefficiency that limit development.

INTERNATIONAL TRADE: pushes a country to identify its unique set of strengths in the world and to channel investment toward building on those strengths. Countries must find out what it can offer the world and capitalize on that good or service. A country has a COMPARATIVE ADVANTAGE when it is better at producing a particular good or offering some service than is another country.

FOREIGN DIRECT INVESTMENT – many LDCs actively solicit foreign corporations’ investment in their countries. They want to attract a MULTINATIONAL CORPORATION (MNC) by establishing SPECIAL ECONOMIC ZONES – or regions offering special tax breaks, eased environmental restrictions, or other incentives to attract foreign business and investment. EXPORT-PROCESSING ZONES refers to regions that offer tax breaks and loosened labor restrictions in LDCs to attract export-driven production processes. Sometimes these are known as FREE-TRADE ZONES because duties and tariffs are waived by governments wanting to encourage MNCs to invest in their countries - FREE TRADE

FAIR TRADE – policies that favor oversight of FOREIGN DIRECT INVESTMENT and OUTSOURCING to ensure that workers throughout the world are guaranteed a living wage for their work. (ie: Ten Thousand Villages)

STRUCTURAL ADJUSTMENT LOANS – loans with stipulations that require the country receiving the loan to make economic changes in order to use the loan. Loans from:

WORLD BANK

INTERNATIONAL MONETARY FUND (IMF)

Problems: too vague and not attentive enough to the needs and wishes of local people. There is no guarantee that sustainable development will actually result in the conservation of natural resources and biological diversity. Economic inequality arises not because there aren’t enough resources, it is the inequitable distribution of wealth and resources.

Challenges for MDCs:

Impact of TRADING BLOCS – conglomerations of trade among countries within a region. It is important that MDCs protect their markets from new competitors – competition is occurring more frequently within regional trading blocs. Most cooperation and competition within and among trading blocs takes place through TRANSNATIONAL CORPORATIONS. Most transnational corporations are headquartered in the U.S. (also Japan and Europe). Within trading blocs, some areas are more industrialized than others leading to internal inequalities (ie: U.S. and Mexico). Important trading blocs:

North America – NAFTA countries have been negotiating with other Latin American countries to extend the trading bloc to new areas of the Western Hemisphere

The EUROPEAN UNION – most barriers of trade within Europe have been eliminated, and even countries that are not members (ie: Switzerland and Sweden) depend heavily on trade with members.

East Asia – no formal organization of states exists in East Asia, but Japanese companies play leading roles in the economies of other countries in the region.

Distance from markets

Inadequate infrastructure

Competition with existing manufacturing in other countries. Transnational corporations have headquarters in MDCs and highly skilled jobs are still in MDCs – prevents wealth from flowing from MDCs to LDCs.

Prevention through governmental policies to protect the environment

Technological change – installing pollution-capturing filters and recycling – also using other forms of energy

Mitigation – damage may be undone or reduced once it has occurred.

Compensation – political bodies ay negotiate compensation for those negatively impacted by industrial wastes.