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Industry

Industry. http://www.economistpakistan.com/news/INDUSTRY_2.jpg. Definition. Industry – The manufacturing of goods in a factory Globalization has changed focus, location Maquiladora – Factories built by U.S. companies in Mexico Near the border Lower labor costs

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Industry

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  1. Industry http://www.economistpakistan.com/news/INDUSTRY_2.jpg

  2. Definition • Industry – The manufacturing of goods in a factory • Globalization has changed focus, location • Maquiladora – Factories built by U.S. companies in Mexico • Near the border • Lower labor costs • Consumers: price is more important than origin http://media.web.britannica.com/eb-media/42/100842-004-DCCD2AEC.jpg

  3. Origins of Industry • Industrial Revolution – Improvements in industrial technology that transformed the process of manufacturing goods • N. England/Scotland in the late 1700s • Replaced cottage industries (home-based manufacturing) http://www.historyhome.co.uk/pict2/cottind.jpg

  4. Origins cont’d • Key: steam engine (1769, James Watt) • Could concentrate whole process in one building • Industries impacted: iron, coal, transportation, textiles, chemicals, food processing • Result: high productivity, better living standards http://3.bp.blogspot.com/_8-z-DJhoXIQ/Swn-fZk23wI/AAAAAAAACJ4/AyTCkhzRAkw/s1600/WattSteamEngine.jpg

  5. Europe • ¼ of world’s industrial output • Emerged during the 1800s/early 1900s • Key areas: • United Kingdom • Rhine-Ruhr Valley (most important area, iron/steel) • Mid-Rhine (Germany) • Po Basin (Italy) http://homepage.smc.edu/buckley_alan/ps7/europe_industry_1850a.gif

  6. Europe cont’d • N.E. Spain (fastest-growing, focus: textiles) • Moscow (fabrics) • St. Petersburg (shipbuilding) • Volga (petroleum, natural gas) • Urals (minerals) • Kuznetsk (coal/iron) • Donetsk (Ukraine, coal, iron, natural gas) • Silesia (Poland, steel) http://img-fotki.yandex.ru/get/4515/154814723.0/0_6065b_b82a631d_XL.jpg

  7. North America • Arrived later, but grew faster than in Europe • Focus: N.E. U.S., S.E. Canada • Regions: • New England (oldest, textiles) • Middle Atlantic (largest) • Mohawk Valley (food processing) • Pittsburgh/Lake Erie (steel) • Western Great Lakes (cars) • S. California (clothing) • S.E. Ontario (steel, cars) http://www.blogcdn.com/www.autoblog.com/media/2010/06/x08buen091.jpg

  8. East Asia • Key resource: people • Japan • Growth – 1950s/1960s • Focus: motor vehicles, electronics • China • Largest supply of low-cost labor • Focus: textiles, steel, household goods • 1990s - allowed transnational companies in, led to rapid economic growth http://www.carztune.com/wp-content/uploads/2011/05/Japanese-auto.jpg

  9. Situation Factors http://m.b5z.net/i/u/10032028/i/2948863.jpg

  10. Definition • The transport of materials to and from a factory • Key factor in determining why industries locate in particular places • Goal: minimize cost of transporting inputs (parts/resources) to factory, and finished goods to consumers http://us.123rf.com/400wm/400/400/anzav/anzav0611/anzav061100192/594631-the-motor-vehicle-transports-trees-on-a-factory.jpg

  11. Bulk-Reducing Industry • Industry in which inputs weigh more than the final product • Example: Copper • Several steps in production (mining, smelting, refining) • Need economical energy source for most steps • 2/3 of U.S. copper comes from Arizona (proximity to mines is most important) http://www.mining-technology.com/projects/bingham/images/bing9.jpg

  12. Bulk-Reducing cont’d • Example: Steel • Manufactured by removing impurities and adding elements (manganese, chromium) • Steel mills have been replaced by minimills, which use scrap metal • Proximity to markets is now more important than inputs http://menofsteelrecycling.com/steelplant.jpg

  13. Bulk-Gaining Industry • Making something that gains volume or weight during production • Example: fabricated metals • Brings metals together and transforms them into a complex product • Most plants locate near markets due to shipping costs http://www.feida-usa-supply.com/Fabricated%20Metal%20Parts.jpg

  14. Bulk-Gaining cont’d • Markets for fabricated metal: TVs, refrigerators, air conditioners, motor vehicles • Beverage production • Empty cans/bottles are filled with liquid, shipped to consumers • Weight adds to shipping costs, so plants are located near markets http://www.theepochtimes.com/n2/images/stories/large/2009/04/30/cc73486687.jpg

  15. Other Industries • Single-Market Manufacturers • Specializers with only 1-2 customers • Ex. Motor vehicle parts • Perishable Product Manufacturers • Ex. Bread, milk, newspapers • Both industries must locate close to customers http://goldcountryprint.com/index_htm_files/animatedpress.gif

  16. How to Transport? • Truck – short-distance, best for one-day delivery • Train – Longer distance, no need for stops • Ship – Low cost, cross-continental • Air – High cost, for small, high-value packages • Break-of-Bulk Point • Location where transfer of travel modes is possible • Cost rises with additional break-of-bulk points http://roguemedia.org/wp-content/uploads/2012/02/Container-Ship.jpg

  17. Site Factors http://archdoc.mr926.me/pics2/1212/2011070112124916305.jpg

  18. Definition • The unique characteristics of a location • Three traditional production factors: • Labor • Land • Capital http://edu.glogster.com/media/5/18/66/99/18669985.jpg

  19. Labor • The most important site factor • Labor-intensive industry • Industry in which wages and other compensation paid to employees constitutes a high percentage of company expenses • Found mainly in LDCs http://www.fibre2fashion.com/_resources/industry-articles/24/2398/1_files/image002.jpg

  20. Labor cont’d • Example: textiles (woven fabrics) • Step one: spinning • Done mainly in LDCs (China = 2/3 of cotton thread) • Synthetic fibers used in recent years (rayon, nylon, polyester) • Child labor is commonly used http://www.cctv.com/english/20090205/images/1233820679619_1233820679619_r.jpg

  21. Labor cont’d • Weaving • 93% of weaving is done in LDCs • Low labor costs offset shipping costs • Assembly • 4 types of products (garments, carpets, home products, industrial products) • Assembled close to consumers (in MDCs) http://www.adhesives-equipment.com/partners/forbo/Bild-Bonding-Systems.jpg

  22. Land • New factories need lots of space (one-story facility) • Likely location: suburban or rural sites • Proximity to major highways is most important • Past: railways • Present: Semi-trucks http://www.business-in-asia.com/images/hemaraj3.JPG

  23. Land cont’d • Environment • Mild climates, year-round activities can also influence site selection • Also: access to affordable electricity • Ex. Alcoa • World’s largest aluminum producer • Relies heavily on hydroelectric power • Constructed its own dams to produce power http://3.bp.blogspot.com/_2mF3zJKEu1E/TGyb8IG4TvI/AAAAAAAAE6c/oJvRRdfNvPk/s1600/045.JPG

  24. Capital • Key source: borrowed money • Industries located near available capital • ‘Auto Alley’ – Michigan, Indiana, Illinois • Silicon Valley – California (1/4 of all U.S. capital is spent here) • LDCs have great difficulty obtaining capital http://www.zillow.com/blog/images/sanmateotosanjose_1.gif

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