2. Global perspective
Stagnant demand
Increased capacity
More developed countries
Trading blocs
Disparities within trading blocs
Less developed countries
Old problems for LDCs
New problems for LDCs
3. From the Industrial Revolution’s
beginnings in the late 1700s until the
1970s, industrial growth in MDCs was
fueled by long-term increases in
population and wealth.
The growth formula was simple: More
people with more wealth demanded
more industrial goods.
However, demand for many
manufactured goods has slowed in MDCs
during the past quarter century.
More developed countries now have
little, if any, population growth.
Wages have not risen as fast as prices
during the past two decades.
4. Fig. 11-21a: The U.S., Soviet Union, and Japan were the largest steel
producers in 1980, and with the rest of Europe, accounted for 80%
of global steel production.
5. While demand for products such as steel has stagnated during
the past quarter century, global capacity to produce them has
increased.
Higher industrial capacity is primarily a result of two trends: the
global diffusion of the Industrial Revolution and the desire by
individual countries to maintain their production despite a global
overcapacity.
Historically, manufacturing was concentrated in a few locations.
Industrial growth through increased international sales was
feasible when most of the world was organized into colonies and
territories controlled by MDCs.
Few colonies remain in the world today, and nearly every
independent country wants to establish its own industrial base.
6. Fig. 11-21b: About 40% of global steel
production took place in
MDCs in 2008, compared to
80% in 1980. Growth of
steel manufacturing in
China has been especially
dramatic.
7. Fig. 11-21c: Steel production has generally declined in MDCs and increased in
LDCs, especially in China, India, Brazil, and South Korea.
8. Countries at all levels of
development face a similar
challenge: to make their
industries competitive in an
increasingly integrated global
economy.
Each state faces distinctive
geographical issues in
ensuring that their industries
compete effectively.
9. Industrial competition in the more developed world
increasingly occurs not among individual countries, but within
regional trading blocs.
The three most important trading blocs are the Western
Hemisphere, Western Europe, and East Asia.
Within each bloc, countries cooperate in trade.
Each bloc then competes against the other two.
10. The North American Free Trade
Agreement brought Mexico into the
free trade zone with the United States
and Canada.
The three NAFTA partners have been
negotiating with other Latin American
countries.
The European Union has eliminated
most barriers to trade through Western
Europe.
Cooperation among countries is less
formal in East Asia, in part because
Japan’s neighbors have much lower
levels of economic development and
unpleasant memories of Japanese
military aggression during the 1930s
and 1940s.
11. Manufacturing in Mexico has moved north to be
close to the USA market
Program to create jobs for Mexican farmers no
longer able to make a living
Assemble parts and ship the finished product
back to the USA
Benefit from NAFTA which has eliminated trade
restrictions
Example of special economic zone
Region offering special tax breaks, eased restrictions,
and other incentives to attract foreign business and
investment
13. Cooperation & competition within and among trading blocs take
place primarily through the actions of transnational corporations,
also called multinational corporations.
Initially, transnational corporations were primarily American-
owned, but in recent years especially Japan, Germany, France, and
the UK have been active as well.
Transnational corporations locate factories in other countries to:
Expand their markets.
Take advantage of lower site factors to reduce their production
cost (labor).
Japanese transnational corporations have been especially active in
the U.S. in recent years.
Most plants have been located in a handful of interior states,
including Ohio, Indiana, Kentucky, Michigan, Tennessee, and
Illinois. German transnationals have clustered in the Carolinas.
15. One country or region within a country may have lower levels
of income and amenities because it has less industry than other
countries or regions within the trading bloc.
16. Europe’s most important Disparities exist at the scale of
industrial areas, such as western the individual country as well.
Germany and northern Italy, are
relatively wealthy.
Industry is concentrated in the
The European Union, through its regions most accessible to
European Regional Development
Fund, assists its three least Western Europe’s core of
industrialized member population, wealth, and
countries—Greece, Ireland, and industry.
Portugal—as well as regions in
three other countries that lack
industrial investment—Northern Germany has had a particularly
Ireland (part of the United difficult problem with regional
Kingdom), southern Italy, and disparities, a legacy of
most of Spain. Communist-run East Germany
A number of Western European (German Democratic
countries use incentives to lure Republic).
industry into poorer regions and
discourage growth in the richer
regions.
17. The South, historically the poorest U.S. region, has had the most
rapid growth since the 1930s, stimulated partly by government
policy and partly by changing site factors.
The Northeast claims that development in the South has been at
the expense of old industrialized communities in New England and
the Great Lakes states.
18. Outsourcing –
moving individual steps in the
production process (of a good
or a service) to a supplier, who
focuses their production and
offers a cost savings.
Offshore –
Outsourced work that is
located outside of the country.
19. Division of the manufacturing process across
several countries, where in different pieces of
the product are made in different countries,
and then pieces are assembled in yet another
country.
Specialization in particular kinds of economic
activities …
of different people
of different regions
Geographic division of labor
“Spatial justice”
How fairly are the world’s resources distributed
geographically?
20. High tech companies have been outsourcing
many of their technical support and other
tertiary jobs to India
Call centers, advanced IT services, etc…
In the Philippines, special electronic
“enterprise zones” have been created with
international telephone rates for companies
specializing in telemarketing
21. Traditionally in large factories,
each worker was assigned one
specific task to perform
repeatedly (assembly line).
Some geographers call this
approach Fordist, because the
Ford Motor Company was one
of the first to organize its
production this way.
Relatively skilled workers are
needed to master the wider
variety of assignments given
them under more flexible
post-Fordist work rules.
22. • The Fordist production
plan was pioneered by
Henry Ford and
suggested that
production be done in a
mass assembly line.
• Currently the world
economy is in a post-
Fordist system where
goods are not mass
produced and are
dispersed around the
globe
24. Fordist – dominant mode of mass production
during the twentieth century, production of
consumer goods at a single site.
Post-Fordist – current mode of production with
a more flexible set of production practices in
which goods are not mass produced.
Production is accelerated and dispersed
around the globe by multinational companies
that shift production, outsourcing it around
the world.
25. The shipment of parts and materials to a
factory immediately before they are needed.
Avoids stocking expensive, unnecessary
inventory allowing for smaller factories
Two possible disruptions:
Labor Unrest
“Acts of God”
26. For any kind of spatial interaction to occur
between two places, there must be a demand
in one place and a supply that matches, or
complements, it in the other.
The flow of crude oil from Saudi Arabia (with
vast oil reserves) t0 Japan (with none) is a
function of complementarity in natural
resources
Knox, p. 27
27. Cost advantages to manufacturers that accrue from
high-volume production, since the average cost of
production falls with increasing output.
Economies of scale are factors that cause the average
cost of producing something to fall as the volume of
its output increases. Hence it might cost $3,000 to
produce 100 copies of a magazine but only $4,000 to
produce 1,000 copies. The average cost in this case
has fallen from $30 to $4 a copy because the main
elements of cost in producing a magazine (editorial
and design) are unrelated to the number of magazines
produced.
Knox, p. 28