INDUSTRIALIZATION

1. INDUSTRIALIZATION APHUG REVIEW

2. History of Industrialization • Existed in some areas pre-18th c (silk factories/China, metal workshops/India) • Work done by hand; powered by water or wind • James Watt’s steam engine more efficiently pumped water to power factories • New methods of smelting iron

3. Industrial Revolution=England • Textile industry: w/ steam engine weaving thread and cloth was quicker=more need for raw materials (wool, linen, cotton) • England had gov support, money from colonies, and COAL; IR spread to other industries in England like transportation and communication • Used steam power for RR and ships • Factories located near resources and population grew around these factories

4. Diffusion of Industrialization • started in coal fields of England • Spread to coal fields of Europe: France, southern Belgium, Netherlands, Germany, Poland ( 19th c) • Used access to skilled labor and transportation routes already established through colonialization • Spread to Spain, Scandinavia, Ukraine (early 20th c) • Diffused to North America (natural resources and land) • Samuel Slater- first textile factory in Rhode Island-1791 • Protected by U.S. gov through embargos and high tariffs • Northeastern U.S. • Processing food, lumber, eventually iron and steel (late 19th c)

5. IR after WWI • Europe and USA had huge economic advantage • Shift to oil and natural gas as major resource; less reliant on coal • Turned to foreign countries to supply: Canada, Saudi Arabia, Kuwait, Iran, Russia, China, Mexico, Venezuela, Nigeria; many multi-national corporations moved to these places to be near supply; most wealth returned to USA causing tensions (and war) between these countries

9. LOCATION THEORY • Explains the pattern of location of economic activities by identifying factors of influence • Primary industry-near natural resources (Western and Central Europe, Eastern North America, Russia and Ukraine, Eastern Asia) • Secondary industry- not as dependent on location of resources which can be transported to factory • Location of secondary industries depend on: • Variable costs of energy, labor, transportation • Friction of distance=the farther away, the more expensive to transport. • Distance decay-related to friction of distance in regard to distribution; the market is usually located near factory

10. Weber’s Model-Least Cost Theory, explains the location of SECONDARY industries • German economic geographer Alfred Weber • Transportation-raw materials to and finished products away from factory (trucks for short distance, RR for medium, ships for long) • Labor-cheap labor often makes up for more expensive transportation costs (USA to Mexico or Indonesia) • Agglomeration-cluster of similar business-provide support for business in equipment, clothing, customers

11. Situation Factors • Optimal location is near customers • BULK-GAINING INDUSTRIES-gains volume or weight during production; needs to be located near where product is sold; examples: canned food, bottled soda, cars • SINGLE-MARKET INDUSTRIES-specialized manufacturing with only one or two customers; example: YKK zipper company in 68 countries near clothing manufacturers; parts suppliers for auto industry • BULK-REDUCING INDUSTRIES- located near raw materials because raw materials are heavier than finished products; example: steel industry in Birmingham, AL near coal and iron • PERISHABLE-PRODUCT COMPANIES-located near customers for rapid delivery before a product spoils; example: bread bakeries and milk bottlers

12. Site Factors-factors related to the cost of production inside the plant • Often MORE important than situation factors! • Labor-most impt site factor on global scale; China ¼ of world’s industrial workers, India 1/5, ALL DEVELOPED countries combined about 1/5 • Land-factories originally located in cities near labor source in mult-storied building to save on land costs; today factories are most efficient in one-story buildings where assembly follows a logical order (raw materials delivered at one end and finished product shipped from other); cheaper in suburban areas • Capital-manufacturers typically borrow money to start or expand industry; example: auto industry in Michigan, high tech industry in Silicon Valley (1/4th of all new capital in USA is spent in Silicon Valley!)

13. NAFTA: North American Free Trade Agreement • Mexico, USA, Canada 1994; eliminated most barriers to moving goods • Said to rival European Union in wealthiest and most populous market • PROBLEMS: • Cheaper labor in Mexico • Lower standard of living in Mexico • Labor unions concerned with relocation of American and Canadian industries to Mexico • Lower environmental standards in Mexico MAQUILADORAS: (a factory in Mexico run by a foreign company and exporting its products to the country of that company) • automobile plants in Mexico near the USA border; nearly all new growth is here, not in USA or Canada; these jobs are now being lost to China because maquiladora jobs ($2/hour) are going to China($1/hour)

14. Maquiladoras • Export processing zone (EPZ) or Free Trade Zone (FTZ) • Companies often criticized for violating human rights and damaging environment due to the lack of customs authorities and lax environmental laws; example-NIKE • Example- General Motors • Cities along border: Ciudad Juarez in Chihuahuapartnered with El Paso, Texas= 2nd largest bi-national metropolitan area along border • Ciudad Juarez- population 1.3 million “most violent city” outside an actual war zone, 4 international bridges, 300 maquiladoras • Tijuana-San Diego, CA largest bi-national metro border • Large, skilled workforce • 550 maquiladoras, which usually pay more than average wage • Tijuana-violent and connected to drug wars

15. China, Special Economic Zones (SEZ) • Same as EPZ’s • Most notable in China is Shenzhen, north of Beijing in Guandong Province • Originally small, rural, coastal town with little technology and resources • 1980 China declared SEZ • Pop now 1.9 million and growing; handles 210 million tons of cargo per year • Good communication with Beijing, ocean ports, RR system, international airport • *The entire province of Hainan has been designated SEZ

16. Shenzhen: before and after

17. 4 Asian Tigers • Hong Kong, Singapore, South Korea, and Taiwan • Rapid industrial growth in fewer than 30 years • Skipped through steps in Rostow’sstages of growth model • Common characteristics: Seaports, rapidly growing populations, industrialized cities, educated/skilled workforce • Investments from foreign companies-trade with USA and Europe • Manufacture/trade EVERYTHING! Low-quality textiles, toys electronics to high demand products • Hong Kong and Singapore=now financial and information centers

18. 4 Little (Baby) Tigers • Malaysia, Vietnam, the Philippines, Indonesia • Striving to be like a big tiger, but haven’t reached that status YET

19. Deindustrialization in USA-when manufacturing plants leave an area on a large scale • Happened over last several decade • Outsourcing of industrial jobs • Relocate factories from American manufacturing regions to manufacturing belts in other countries (SEZ, EPZ, FTZ) • Cheaper labor in other countries • Lenient environmental laws allow for cheaper production • Example: The Rust Belt, includes area around Great Lakes with auto manufacturing plants; after outsourcing plants sit vacant