APHG Unit Six Review Industrialization and Economic Development

APHG Unit Six Review Industrialization and Economic Development

Economic Development o o o Industrialization: the process evolved from taking basic goods from the earth, and processing them into finished goods n Industrial Revolution: began in England in the late 1700 s Economic Development: improving the conditions of people through diffusion of knowledge and technology n More Developed Countries (MDCs): n Less Developed Countries (LDCs): n Newly Industrialized Countries: somewhere in the middle Compressed modernity: rapid economic and political change that transform a country into a stable nation

Economic Indicators of Development o o o Gross Domestic Product per Capita: MDC-Higher Types of Jobs: MDC-Tertiary, LDC-Primary Worker Productivity: MDC-More productive n Value Added: subtracting the costs of raw materials and energy from the gross value of the product Access to Raw Materials: MDC-More access Availability of Consumer Goods: MDC-More Available Social Development: literacy, formal education, and good health care

Theories of Economic Development o o Modernization Model: According to Weber, the cultural environment of Western Europe favored change; tradition is greatest barrier to modernization Dependency Theory: responsibility for poverty on wealthy nations; Wallerstein n Core Countries: rich nations that fuel world’s economy n Semi-Periphery Countries: exert more power than peripheral countries, but are dominated by core countries n Periphery Countries: low income countries hindered by colonization

Rostow’s Model § Economic prosperity is open to all countries • • Traditional Stage: build lives around families, communities, and religion; limited wealth; subsistence farmers Take-off Stage: countries began experimenting with trade; industrial revolution; individualism, willingness to take risks, and material goods Drive to technological maturity: economic growth is accepted; higher standard of living; economy diversifies; BR declines High mass consumption: mass production of goods; luxury goods become necessities; high incomes and more people in tertiary sector

Industrial Revolution o o Began in Britain, spread through Europe and Russia, then to the United States Early factories in Britain were powered by water running downslope n o James Watt: inventor of the steam engine; water can be pumped more efficiently; more flexible use of machines Break-of-bulk: transfer of cargo from one type of carrier to another

Location Theory o Why is what produced where? n n n Variable Costs: energy, labor, and transportation is less expensive in some areas Friction of Distance: cost of transportation increases with distance Decay: industries are more likely to serve markets of nearby places than those far away

Weber’s Least Cost Theory o Developed by Weber as an attempt to explain the location of secondary industries n Transportation: site of factory is determined based on costs of moving raw materials to the factory, and then to the market n Labor: cheap labor may make up for high transportation costs n Agglomeration: if several industries cluster, they can share talents, services, and facilities o o Deglomeration: occurs when a business moves from a crowded area Substitution Principle: business owners can juggle expenses, as long as not all their costs go up at once

Hotelling’s Model o o o Harold Hotelling (1895 -1973) was an economist who built on Weber’s model He wanted to understand locational interdependence Asked what two ice cream vendors would do on a beach n n Said they would begin at opposite ends, and then gradually end up back-to-back Once there, they would be unlikely to move

Hotelling Interdependence Theory o o influence of one firm’s locational decisions by locations chosen by its competitor Variable Revenue Analysis: the firm’s ability to capture a market that will earn it more customers and money than its competitor

Site o o Particular to a geographic location and focus on varying costs of land, labor, and capital Labor Intensive Industries: an industry heavily dependent on labor like a textile industry

Situation • In Industrialization, has mostly to do with transportation costs • • • Bulk-reducing industry: the raw materials are bulkier and heavier than the finished products; example: copper industry Bulk-gaining industry: raw materials weigh less than the finished products; example: canning industry Single-market manufacturing: manufacturing clusters near its market

Major Industrial Regions o o The distribution of industries around the world are very uneven Primary Industrial Regions: areas of large agglomeration of industry n n n Western and Central Europe: Ruhr River area of Germany (proximity to markets, raw materials, and transportation) Eastern North America: Manufacturing Belt extends from Boston and New York to Philadelphia and Baltimore, and borders Great Lakes Russia and the Ukraine: Ukraine provides coal; Trans. Siberian Railroad; Ural Mountains

Major Industrial Regions o Primary Industrial Regions: n Eastern Asia: o Japan: 1 st country in East Asia to industrialize; never colonized n n n o Meiji Restoration: campaign for modernization and colonization Oligarchs: industrial and military leaders; established colonies Kanto Plain: includes Tokyo and surrounding areas; Tokyoforward capital China: began industrializing under communism n Northeast District: industrial heartland in Manchuria; large deposits of coal and iron

Major Industrial Regions o Primary Industrial Regions: o Four Tigers: (South Korea, Taiwan, Hong Kong, and Singapore) n o o Export-oriented industrialization: directly integrate their economies into the global market by concentrating on producing goods for export; example: electronics Pacific Rim: countries that border the Pacific Ocean on their eastern shores Special Economic Zones: found in China; foreign investment is allowed and capitalistic ventures encouraged

Secondary Industrial Regions • Lie south of the Primary Industrial Regions • Venezuela, Argentina, Brazil, South Africa, Nigeria, Ganges River area of India, Malaysia, and southern Australia • • • Maquiladoras: developed in 1960’s in Mexico, just south of the US border; goods manufactured for export to the US NAFTA: agreement between US, Canada, and Mexico • Pros: promote trade between countries • Cons: Mexico’s standard of living and wages India: • Natural Resources: hydroelectric power, iron, and coal • Human Resources: HUGE population becoming more educated and westernized

Global Inequalities o Challenges for MDCs n Trade Blocs: conglomeration of trade among countries within a region o o o n n n North America: NAFTA European Union: European Union East Asia: No formal agreement yet…Four Tigers? Transnational Corporations: companies that operate in countries other than the ones in which they are headquartered Conglomerate Corporations: comprised of many small firms that support the overall industry Deindustrialization: decrease of employment in manufacturing as a share of total employment

Global Inequalities o Challenges for LDCs n n n Distance from markets: invest in transportation facilities like airports Inadequate infrastructure: lack transportation, communications, schools, and universities Competition with existing manufacturing in other countries: transnational competition; low-skilled jobs in LDCs, high-skilled jobs in MDCs o New international division of labor: keeps global inequalities in place; discourages new industries, keeps high-skilled jobs in MDCs, and prevents wealth from flowing to LDCs

Industrialization and the Environment o o Fossil Fuel Reserves: n Proven Reserves: oil reserves that have been found, but not extracted n Potential Reserves: unknown number Consumption of Fossil Fuels: n MDCs have about ¼ of the world’s population, but use ¾ of the world’s fossil fuels n China uses the most fuel, followed by the United States

Industrialization and the Environment o o Industrial Pollution: increased air, water, and land pollution n Global Warming: increase in Earth’s temperature caused by the burning of fossil fuels n Greenhouse Effect: an anticipated warming of the Earth’s surface that could melt the polar icecaps n Acid Rain: forms when sulfur dioxide and nitrogen oxides are released in the atmosphere by burning fossil fuels Sustainable Development: people living today should not impair the ability of future generations to meet their needs

Solutions to Environmental Problems o o Prevention: Chinese One-Child Policy; Debt-for. Nature Swap Technological Change: includes recycling of industrial wastes Mitigation: damage may be undone or reduced once it has occurred Compensation: political bodies may negotiate compensation for those negatively impacted by industrial waste; ex: Erin Brokovitch