Industry: Introduction and Industrial Revolution

1. Industry: Introduction and Industrial Revolution Nike example: management and research (core) vs. production (periphery) India, China, Japan established industrial base long before Europe Colonialism allowed Europe to gain control of India’s (and other places’) raw materials and markets Britain needed mass production to be able to flood colonial markets with cheap goods

2. Industry: Industrial Revolution First steps in Industrial Revolution: 1. Improve machinery 2. New uses for energy sources: using coal to produce smelt iron and cast iron James Watt and steam engine: railroads and steam ships (gave Great Britain advantage) Prior to railroad, manufacturing centers close to coal fields and connected to ports North-central England and major coal belt through mainland Europe (e.g., Ruhr area of Germany) Railroad expanded industrialism to London and Paris (large markets, labor force, capital flow)

3. Diffusion of Industrialism Primary Industrial Regions by 1950s 1. North America: started in northeast; large coal deposits; ability to acquire overseas raw materials 2. Russia and Ukraine: St. Petersburg region historically the center; after USSR, Ukraine annexed (coal rich) 3. East Asia: Japan imported raw materials from colonized Korea, Taiwan, China; Kanto Plain and Kobe-Kyoto-Osaka

4. Changes in Industrial Production Early 20th Century Fordist production: supported by political-economic structures and financial orders Assembly-line production Machines replaced people Vertical integration: same firm owns numerous companies in commodity chain

5. Changes in Industrial Production Friction of distance: increased time and cost with distance (NC and furniture example) Alfred Marshall: industrial clusters (localization) Alfred Weber: Where industries cluster Least cost theory: transportation, labor, agglomeration(cluster of support businesses)

6. Changes in Industrial Production Post-Fordist: globalism, decreased transportation Flexible production systems: components are made in different global places and brought back together Commodification: goods gain a monetary value and enter the market Product life cycle: changes in production of a good over time (TV example) Three elements of production: R&D, components manufacturing, assembly

7. Global Division of Labor Global division of labor: R&D in core, labor in semi-periphery/periphery, nothing permanent Time-space compression: changes in transportation and communication accelerated the pace of change and made distance less of a factor Just-in-time delivery: inventory management; keep enough for short-term production, quick shipping Spatial fix: movement of production based on cost advantages (e.g., opening of special economic zones) Outsourced / Offshore: production steps outsourced to suppliers (offshore if in foreign country) Mass consumption still in core

8. Global Division of Labor In global division of labor, greatest benefits go to management/R&D/stockholders Product’s afterlife: recycling, components, environmental damage

9. Contemporary Global Manufacturing Transportation: cost lowering, wider dispersion of consumers Availability of transportation alternatives (intermodal connections) Container innovations Regulatory Circumstances: international trade organizations (WTO), free trade, anti-quotas, anti-protectionism (Neoliberalism, special economic zones, etc.)

10. Contemporary Global Manufacturing Energy: coal to gas and oil Dependence on foreign fuel supplies (U.S., Europe, Japan); use of tankers and pipelines U.S. oil production dwarfed by consumption; pressures for offshore drilling

11. New Centers of Industry Deindustrialization in core areas has led to new industrializing countries (NICs) East Asia: Japan, Four Tigers (Korea, Taiwan, Hong Kong, Singapore Hong Kong is break-of-bulk point: good transferred from mode of transport to another

12. New Centers of Industry China: planned from start of revolution Large labor, low wages, SEZs, force attracts international companies Parts of China are deindustrializing (Rust Belt), manufacturing moving to interior; world’s largest exporter Wider World: BRICS (semi-periphery)

13. Deindusrialization Led to rise in quaternary (finance, administration, computer services) and quinary (research, higher education) industries in core countries Wealthier countries most successful at postindustrial economies and still dominate manufacturing Rust Belts: Northeast U.S., British Midlands, parts of Eastern Europe Sun Belt: southern U.S., California, financial industries, high-tech

14. New Patterns of Economic Activity Energy and market accessibility not as important to service industry Tertiary services in transportation and communication tied to both production and consumption (but don’t have to be close to either) Restaurants and retail must be close to consumers Quaternary services in can be close to (retail banking) or far from (technical help centers) costumers Quinary services near government, corporations, or universities

15. New Patterns of Economic Activity High-Technology Clusters: SEZ with high-tech infrastructure that provides high-tech jobs (Silicon Valley) Growth pole: cluster that attracts businesses and spurs growth in nearby areas Technopole: agglomeration of tech companies Often near airports Economic benefits, environmental harm

16. New Patterns of Economic Activity Tourism: transformed communities (downtowns, ports, theme parks, beaches) Service industry vulnerabilities: tourism / natural disasters jobs lost to mechanization (travel agencies / Internet) Globalism and global economics: decisions made far away affect local areas (housing crisis)