Post on 18-Jan-2018
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Industry
Chapter 11
Industrial Revolution
• Cottage industry– Iron– Coal– Transportation– Textile– Chemicals– Food processing
Europe
Western Europe
• United Kingdom– Industrial Revolution– Lost international
leadership in the 20th century
– Attracted high-tech industries, serving the European
– Industries located in E/SE England
• Rhine-Ruhr Valley– Belgians led the way in coal
mining– French opened the first coal-
blast furnaces for iron making– Germans opened first
industrial cotton mill– Political problems stopped
development of modern transportation
– Most industrial areas lie in NW Germany
– Iron & steel manufacturing due to closeness of coal fields
• Mid-Rhine– Europe’s most centrally located industrial area– Frankfurt – financial & commercial center & hub
of Germany’s transport network– Stuttgart – high-valued goods that require skilled
labor– Mannheim – inland port, large chemical industry,
synthetic fibers, dyes & pharmaceuticals
• Po Basin– Numerous workers
willing to accept low wages
– Inexpensive hydroelectricity
– Attracted textiles & other industries
• Northeastern Spain– Fastest growing late 20th
century– Catalonia centered on
the city of Barcelona center of Spain’s textile industry
– Country’s largest motor-vehicle plant
Eastern Europe
• Moscow– Russia’s oldest industrial
region– Centered around
country’s capital & largest city
– Despite few resources, skilled labor to produce linen, cotton, wool & silk
• St. Petersburg– Second-largest city– Specializing in ship
building– Other industries that
serve the navy & ports in the Baltic
– Processed foods, textiles & chemicals
• Urals– Contain world’s most
varied collection of minerals – 1,000 types of minerals
– Attracted steel, chemicals, machinery & metal fabricating plants
• Volga– Contains largest
petroleum & natural gas reserves
• Kuznetsk– Most important
manufacturing district east of the Urals
– Largest reserve of coal & large supply of iron ore
• Dontetsk– Eastern Ukraine– World’s largest coal
reserves
• Silesia– Europe’s most rapidly
growing industrial area– Skilled & low-paid
workforce & proximity to wealthy markets in western Europe
North America
North America
• New England– Cotton textiles early 19th
century– Imported from southern
states & finished product shipped to Europe
• Middle Atlantic– Largest US market– Attracts industries that
need large proximity to large number of consumers
– Foreign trade through region’s large ports
• Mohawk Valley– Linear industrial belt in
upper New York State– Advantage inexpensive
electricity generated by Niagara Falls
• Pittsburg-Lake Erie– Was leading steel-
producing area in 19th century
– Proximity to Appalachian coal & iron ore
• Western Great Lakes– Chicago – hub of the
nation’s transportation network
– Now, center of steel production
• Southern California– Largest area of clothing
& textile production– Second-largest furniture
producer– Major food-processing
center
• Southeastern Ontario– Canada’s most important
industrial area– Central to Canadian &
US markets & near Great Lakes/Niagara Falls
Asia
Asia
• Japan– Became and industrial
power in 1950s & 1960s. – Initially by producing
goods that could be sold in large quantity at cut-rate prices to consumers in other countries
– Centered between Tokyo & Nagasaki
• China– Seconds-largest supplier
of low-cost labor & is world’s largest market for many products
– Three areas: Hong Kong, Yangtze River & Gulf of Bo Hai
• South Korea– Began an export-
oriented manufacturers– Ocean going ships– Centered along the rim
between the capital & second-largest city Seoul and Busan the largest port
Section 2
Why do Industries have different distributions?
Situation Factors
• Proximity to inputs– Optimal plant location is
as close as possible to inputs is the cost of transporting raw materials to the factory is greater than the cost of transporting the product to consumers
• Proximity to markets– Optimal plant location is
as close as possible to the customer is the cost of transporting raw materials to the factory is less than the cost of transporting the product to consumers
• Nonmetallic minerals– 90% of metals humans
use are nonmetallic – Building stones,
diamonds, minerals used to manufacture fertilizers: nitrogen, phosphorus, potassium, calcium & sulfur
• Metallic minerals– Valuable for fashioning
machinery, vehicles & other essential elements of contemporary society
– Malleable– Ductile– Conductors– Metals are capable of
combining to form alloys that have distinct properties for industry
• Ferrous– Contains iron (Latin for
the word iron)– Extracted from iron ore,
the world’s most widely used ore
– Fashioning iron 4,000 years ago
• Chromium• Manganese• Molybdenum• Nickel• Tin• Titanium• Tungsten
• Nonferrous metals– Used to manufacture
products that don’t contain iron & steel• Aluminum• Copper• Lead• Lithium• Magnesium• Zinc• Precious metals• Rare earth metals
Situation Factors: Proximity to Markets
• Bulk gaining – makes something that gains volume or weight during production– Fabricated metals– Beverage production
Single Market Manufacturers
• Specialized manufacturers with only one or two customers
• Optimal location for factories is close proximity to customers
Perishable Products• To deliver as rapidly as
possible must be located as close to markets as possible– Bread– Cheese– Butter– Daily newspaper
• Electronic delivery has led to the decline in print publishing jobs – 1 million to 800,000 and Internet publishing jobs has increased from 70,000 to 80,000
Ships, Rail, Truck, Air?
• The further something is transported the lower the cost per kilometer (mile)
• Longer distance transportation is cheaper per kilometer because firms must pay workers to load goods on & off vehicles whether the material travels 10 or 10,000 kilometers
• Cost per kilometer decreases at different rates for the different modes
Ship, Rail, Truck or Air?
• Trucks– Most often used for
short distance– Can be loaded and
unloaded quickly– Advantageous is the
truck driver can reach destination within one day
• Trains– Often used to reach
destinations that take more than a day
– East & West coast in US– Take longer than trucks
to load and unload– Once on the way they do
not need to take rests like trucks
• Ships– Used for long distance– Cost per kilometer is
very low– Slower than land based
transportation
• Air– Most expensive for all
distances– Used for speedy delivery
of small-bulk, high-valued packages
Break of Bulk
• Regardless of transportation mode, cost rises each time that inputs or products are transferred from one mode to another
• Companies may calculate that the cost of one mode is lower for some inputs & products where another mode may be cheaper for other goods
• Many companies that use multiple transports must calculate break of bulk – location where transfer among transportation modes is possible
• These are seaports, airports
Copper: Proximity to Inputs or Markets
1. Mining – bulk reducing, most of ore extracted is gangue. In North America, copper ore mined is low grade 0.7% copper
2. Concentration – crush & grind into fine particles, mix with water, chemicals filter & dry. 25% copper. Concentration mills are located near mines
3. Smelting– Concentration becomes
input for smelters which remove impurities
– Another bulk-reducing industries and smelters are built main inputs to minimize transportation costs
4. Refining– Purified copper from
smelters is refined to produce copper cathodes 99.99% pure copper
– Refineries are located near smelters
Steel: Changing Inputs• Steel is made by removing impurities in iron such as silicon, phosphorus, sulfur & oxygen
• Bulk-reducing industry traditionally located it facilities because of situation factors. Two changes– Change in relative
importance of main inputs– Increasing importance of
proximity to markets rather than proximity to inputs
Changing Distribution of the US Steel Industry
1. Mid 19th Century – Southwestern Pennsylvania
2. Late 19th Century – Lake Erie3. Early 20th Century – Southern Lake Michigan4. Mid 20th Century – East & West Coasts5. Late 20th Century – Proximity to markets
Motor Vehicle: Changing Markets• Global distribution
– Assembled at plants using thousands of parts supplied by independent companies
– Three regions include 10 carmakers that control 85% of world sales• Two in North America – GM &
Ford• Four in Europe –
Germany(VW), Italy (Fiat- Chrysler), France (Renault-Nissan& Peugeot)
• Four in East Asia – Japan (Toyota, Honda & Suzuki), South Korea (Hyundai)
• Regional distribution of vehicle production– North America –
assembly & parts plants located in interior US between Michigan & Alabama
– Corridor known as “auto alley” formed by north-south interstate highways 65 & 75
• Europe– East-West corridor
between UK & Russia– Germany is the leading
producer in Europe– Since the end of
communism east Europe has seen a large increase in production
• East Asia– Clustered in the east
near major population centers
– Most car buyers in China are in large cities
Site Factors
• Labor
• Capital • Land
Textiles and Apparel: Changing Inputs
Weber: Least- Cost Theory
• Alfred Weber• Optimum location
where cost of transporting raw materials to factory & finished goods to market at their lowest
1. Area is completely uniform physically, politically, culturally & technologically
2. Manufacturing involves a single product to be shipped to a single market whose location is known
3. Inputs involve raw materials from more than one source
4. Location is infinitely available but immobile in location
5. Transportation routes are not fixed but connect origin & destination by shortest path. Transport costs directly reflect the weight of the item shipped & the distance they are moved
Hotelling Model
• Economist Harold Hotelling (1895-1973)
• Wanted to understand the issue of locational interdependence