IAD - Global Industrialization Lesson

 Global Industrialization Lesson

Industry Around the World

  • Modern Industry
    • 75% of industry is located in primary industrial regions :
      • West and Central Europe (England, Germany, France, Ireland and northern Italy)
      • Eastern Europe (Russia and Ukraine)
      • North America (mostly NE)
      • East Asia (Japan, South Korea, Taiwan and China)
  • Secondary industrial regions
    • Latin America (Venezuela, Argentina and Brazil)
    • South Africa and Nigeria
    • India
    • Malaysia, Vietnam, Philippines, Thailand ("Baby Tigers" )

United States

  • Regionalization is created by characteristics that differentiate areas from each other:
    • Can be by city:
      • NYC financial, Hartford (CT) insurance, San Francisco shipping and technology, Houston energy
    • Can also be by state:
      • North American Manufacturing Region (Boston - NYC - Philadelphia - Baltimore - Pennsylvania and Great Lakes)
        • The Middle Atlantic - megalopolis (NYC, Philadelphia, Delaware, Baltimore) with a focus on ports
        • Great Lakes region (MI, IL, IN, OH, NY, PA) also into Canada - manufacturing, steel, autos (Detroit), marketplaces and transportation (Chicago)
          • Deindustrialization (shift away from manufacturing) has hit the Rust Belt hard, but is still home to some industrialization
        • New England - textile industry because of labor and water

Changing Economies

  • Geographers expect that new countries will come to control manufacturing, especially as Europe and the US move toward the service industries
    • The BRICS are expected to control global manufacturing in the 21st century
      • Brazil, Russia, India, China and South Africa

GDP Composition By Sector and Labor Force By Occupation, produced using data from the CIA World Factbook 2006.

The green, red, and blue components of the colors of the countries represent the percentages for the agriculture, industry, and services sectors respectively, as summarized on the color key - for example, rgb represents 20% agriculture (green), 40% industry (red), and 40% services (blue).

GDP Composition By Sector and Labor Force By Occupation, produced using data from the CIA World Factbook 2006.

Globalization

Industry has reached new levels of globalization (interconnectedness of the world) and created a new international division of labor (global division of labor) with industrial jobs going to the LDCS due to lower costs

  • Brands such as McDonalds, Starbucks, AT&T, Nike, GM
  • Multinational companies are focusing on low cost production in LDCs and high profits in MDCs
  • Outsourcing allows a company to relocate some or all of its production to cheaper locations
  • Offshore companies do the vast majority of their business (production) outside of their home country in order to benefit from more lenient taxes and economic regulations
    • Panama, Luxembourg, Switzerland, Bahamas, etc.
    • Many companies form conglomerations or trading blocs to ensure continued power (NAFTA, EU, Pacific Rim Economic Region)

Modern Changes

  • In the USA movement has been seen to the southern US because of anti-union sentiments (right to work laws), cheaper land and labor
  • The EU has encouraged the spread of European industry to less wealthy areas and eastern European nations have benefited from the fall of communism
  • But the most obvious shift had been to areas with more resources for increasing production
    • China (highest production), Mexico, Brazil
      • This has led to deindustrialization in areas such as the American Midwest (Rust Belt) and central England

Special Economic Zones

  • LDCs welcome outside industry, foreign direct investment, by creating special economic zones (export-processing zones) with incentives for companies such as lower taxes or environmental easements
    • Some money comes from organizations such as the World Bank or IMF or private company loans
      • Failed loans can lead to structural adjustment plans that require the nation to create international business incentives to keep the loan
      • Some nations also privatize or sell public industries to private companies (such as utilities or phone companies)
      • Some nongovernmental organizations (NGO) such as try to help people in nations on the periphery

Maquiladoras

  • Mexico established maquiladora zones on its northern border with the USAA maquiladora factory in Mexico
    • These zones offer cheap labor, tax breaks and shipment back to the US tariff free
  • These factories ( maquiladoras ) attract out-of-work farmers and laborers, but the overpopulation has created problems
  • These factories have been supported by the reduced restrictions on tariffs, and flow of products due to NAFTA

Deindustrialization

  • When industry moves (for any reason) outsourcing, offshore, deindustrialization , agglomeration it leads to backwash effect in the original area
    • This can turn areas into economic backwaters
      • China has a focus on the coast and economic backwaters through the rest
      • France focuses in Paris
      • Buenos Aires is a center and the rest is economic backwater
      • US backwaters include the upper Great Plains, lower Mississippi Valley, parts of the SW
        • Nations try to counteract this areas with urban renewal (US and Europe), special economic zones (Asia) and maquiladoras (Mexico)
  • Loss of production jobs went along with the increase of high-tech and e-commerce jobs during the 1960-1990s

Issues with Current Practices

  • Many MDCs are moving from a Fordist approach (assembly line systems where one company owns all aspects of production within one country)) to Post-Fordist (creation of networks and specialized production) focus on grouping skilled workers to create the best possible outcome
  • Modern practices have led people to discuss free trade (capitalistic ideals) vs. fair trade (workers' rights and equality)

Negative Effects of Industry

  • Fossil fuel usage (coal, petroleum, gas) has increased dramatically with technology
    • Growth of population and technology (especially the speed of Indian and China) has created an increased need for energy
      • MDCs use about 75% of world's fossil fuels
        • US uses 25%
    • Use of these energy sources also leads to pollution, global warming through the Greenhouse Effect , acid rain
    • Energy producers have invested in renewable resources (hydroelectric, solar, wind, biomass, geothermal)
    • Work in turning towards sustainable development
      • Focuses on renewable resources, microloans and ecotourism

IMAGES CREATED BY GAVS (Images are available in the Public Domain via Wikimedia Commons, Creative Commons License Attribution)