S.6 Geography presentation

Hi-tech Industries

Group memberColeman

TerryThomas

Jack

What is the Hi-Tech Industry?

• Introduction • A High technology (Hi-tech) industry is one that

produces sophisticated products. There is a significant emphasis on research and development. Often the 'raw materials'are electrical components. Examples of Hi-tech industries include:

• Computers • Telecommunications • Aerospace and military equipment

What is the Hi-Tech Industry?

• It ususally refer to the industries developed with the last 25years and whose processing techniques often involve micro-electronics

• Two possible subdivisions of high-tech industries: 1. the ‘sunrise industries’ which have a high-technology base. 2. information technology industries involving computers, telecommunications and micro-electronics.

Characteristics of hi-t industry

• Rapidly Changing Product Cycles

• Hi-tech products usually have a short life cycle. (R&D, growth, mature, decline).

• E.g. more than ¼ people in china will change their mobile to a newer model in one year. That means the life cycle of the mobile phone is only about 2 and a half year.

Rapidly Changing Product Cycles

• Frequently rapid changes in product and process technology

• One result - mergers, acquisitions, deaths, and new startups

– typical examples - Microsoft • Office Suite, WWW strategy, Alliances

– Boeing• Airline models, acquisitions & divestitures over time.

• A tendency towards continuous “reinvention” of enterprises.

Characteristics of hi-t industry

• Hi-T products have relatively low weight and bulk. Low transport cost

• Hi-tech industry is a kind of footloose industry. They do not have to locate close to raw materials.

• Footloose industries locate in pleasant environments.

• They have to locate close to research centres .

Development of hi-tech industry in China

• Hi-tech industry becomes more and more important in china, as it is a high value-added industry and use relative less raw materials and cause less pollution problems.

development of hi-tech industry in china

• In 2000, the output value of the electronic and information products manufacturing sector reached 1,000 billion yuan (about 120.9 billion U.S. dollars). That was four times the figure five years ago.

• The 2004-year output value of Anhui Hi-tech industry was over 92.287 billion Yuan 144.7 percent higher than that of 2000-year and will easily exceeding 100 billion Yuan this year

Locations of hi-tech industry

• Case study: UK (along M4corridor)• High-tech firms choose to locate in regions

with good housing, service and attractive countryside.

• Heathrow airport• Most of the firms in UK have their

company headquarters in the USA, Japan, Germany and South Korea.

• Close to research institutions.

Locations of hi-tech industry

• Locational factors for high-tech firms.

0

10

20

30

40

50

60

70 universitynearby

suppor fromlocalauthorities

near to otherhigh-t firms

goodworkforce

pleasantenvironment

Cambridge science park

• Established by Trinity College in 1970. Now home to 71 hi-tech companies and 5,000 personnel.

Site plan

Location of Hi-tech industry

• Another example: M4 corridor

Location of Hi-tech industry

• Why M4 corridor attracts footloose industry to the M4 corridor?

• M4 motorway is a fast, reliable road route.• Heathrow Airport.• Cheaper land sites – compared to costs in London.• Other motorway links from M4, e.g. M5,M40,M25• Many government research laboratories. E.g. Harwell an

d Aldermaston.• Nearby universities e.g. Oxford, Bristol• Attractive environment.

Location of Hi-tech industry

• Second type of high-tech enterprises.• Concentrate on production (branch plants).• Semi-skilled, low-cost labour• Doing routine work.• E.g. Thailand and Mexico.• Why US, Japanese and Korean high-tech f

irms use their factories in the UK as a base for supplying the EU, but not other place in EU?

Characteristic of the labour

• Highly skilled, inventive and intelligent workforce

• E.g. researchers, scientist

• Therefore, hi-tech industry usually sets up near the universities, science park.

Characteristic of the labour

• Labour skills are usually more important to firms than labour costs.

• As most of the high-tech industries are depended on R&D and product innovation.

• For branch plants: low cost labour, semi-skilled, unskilled.