Introduction to Human Geography - 2nd Edition Chapter 11 Industry

Industry David Darrell and Todd Figure Factory in , Greece Author Jason Source Commons License STUDENT LEARNING OUTCOMES By the end of this section , the student will be able to . Understand the origins and diffusion of industrial production . Explain the impact of industry on places . Describe the industrial basis of modern cultures . Connect industrialization , technology , the service sector and globalization Page 216

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY CHAPTER OUTLINE Introduction Marx Ideas Factors for Location The Expansion and Decline of Industry Global Production Summary Key Terms Works Consulted and Further Reading INTRODUCTION We live in a globalized world . Products are designed in one place , assembled in another from parts produced in multiple other places . These products are marketed nearly everywhere . Until a few decades ago , such a process would have been impossible . Two hundred years ago , such an idea would have been beyond comprehension . What happened to change the world in such a way . What eventually tied all the economies of the world into a global economy ?

Industry did . The Industrial Revolution changed the world as much as the Agricultural Revolution . Industry has made the modern lifestyle possible . Figure The Volkswagen The Volkswagen is designed in Germany and assembled in Mexico from parts from the represented countries . It is marketed as German Does it matter if the car was made in Germany from German parts ?

Author David Source Original Work License BY SA Page 217 INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY During the 2016 presidential election , something very peculiar happened . Candidates from both major parties ( Donald Trump and Hillary Clinton ) agreed over and over again on one thing ( and only one thing ) The needed to create or bring back manufacturing jobs . Both candidates promised , if elected , to create new , manufacturing jobs . This was an odd shift , because for the previous years Republicans typically embraced free trade that allows manufacturers to choose where and what to produce ( and many chose to move operations outside of the ) while Democrats claimed to be working for the interests of , working class people , whose jobs and wages had diminished since the period of both in the and throughout the industrialized world . In the manufacturing provided jobs to 13 million workers in 1950 , rising to 20 million in 1980 but by 2017 that number was back to 12 million similar to levels last seen in 1941 . A similar story can be found in Great Britain where jobs in manufacturing in 2017 were half of what they were in 1978 and output that once was 30 of accounts for only 10 in 2017 . Similar stories can be found in Germany , Japan , and other industrialized economies . You may ask yourself , Where did all of those jobs go ?

But if you think about it , you can probably come up with your own answers . It important to note that even as jobs declined , manufacturing output in most industrialized countries continued to increase , so fewer people were producing more things . The and simplest explanation for this is automation . For years , science writers have warned us that the robots are coming . In the case of manufacturing technology they re already here ! Workers today are aided by software , robots , and sophisticated tools that have simply replaced millions of workers . Working at a manufacturing facility is no longer simply a effort , but one that requires extensive training , knowledge , and willingness to learn new technologies all the time . The second explanation is the relocation of manufacturing from wealthy countries to poorer ones because of lower wages in the latter . As discussed earlier in this chapter , most countries have moved away from the protectionist model of development , allowing corporations to choose for themselves the location of production . No better example of this shift can be found than , which in the 1970 advertised that the majority of all of the products it sold were made in the USA . Thirty years later , it would be for to ANY manufactured product that was still made in the USA . A third reason for the decline in manufacturing jobs is a decrease in demand for certain types of items . Steel production in the and England dropped precipitously during the period of deindustrialization ( since the 1980 ) not just due to automation or cheaper wages elsewhere , but also because demand for steel also declined . During the 20 century the , Europe , and Japan required enormous amounts of steel in the construction of bridges , dams , railroad , skyscrapers , and even automobiles . Building of such items in the 21 century has slowed down , not because those countries are in decline , but because there is a limit as to how many bridges and Page 218

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY skyscrapers are needed in any country ! Demand for steel in a country diminishes as per capita reaches about . Meanwhile , demand for steel will continue to rise in Japan and India for several years as they ( and other countries ) continue to expand cities , rail lines , and other construction projects . Such a decline in steel production does NOT mean that a country is in decline , but rather that there has been a shift in the type of manufacturing that occurs . The , Germany , and Japan all continue to increase manufacturing output ( Figure ) even as their share of global output continues to decline . Figure Leading Countries in Manufacturing Output , 2013 Author The World Bank Source The World Bank License BY Another shift in manufacturing relates to the geography of production and is best understood in the consideration of different modes of production ) is associated with the assembly line style of production credited to Henry Ford , who dramatically improved by instituting assembly line techniques to simplify jobs , standardize parts , reduce production errors , and keep wages high . Those techniques drove massive growth in manufacturing output throughout most of the century and brought the cost of goods down to levels affordable by the masses . Nearly all of the automobile assembly plants located in and around the Great Lakes region of North America adopted the same strategies , which also provided healthy amounts of competition and new innovation for decades , as North America became the worlds leading producer of automobiles . begins to take hold in the 1980 as a new , global mode of production that seeks to relocate various Page 219

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY components of production across multiple places , regions , and countries . Under , the entire unit would be produced locally , while seeks the lowest cost location for every different component , no matter where that might be . Consider an optical , wireless mouse for a moment . The optical component may come from Korea , the rubber cord from Thailand , the plastic from , and the patent from the . Meanwhile , all of those items are most likely transported to China , where workers manually assemble the project and an automated packing system boxes and wraps it for shipping to all corners of the world . Global trade has been occurring for hundreds of years , dating back to the days of the Silk Road , Marco Polo , and the Dutch East India Company , but , in which a single item is comprised of multiple layers of manufacturing from multiple places around the world , is a very recent innovation . The system has the globe , such that manufacturers are constantly searching for new locations of cheap production . Consumers tend to greatly from the system in that even poor middle school students in the can somehow afford to own a pocket computer ( smart phone ) that is more powerful than the most advanced computer system in the world from the previous generation . This is kind of a miracle . On the other hand , manufacturing jobs that once were a pathway to upward economic mobility , no longer assure people of such a decent standard of living as they once did . History of Industrialization Industrialization was not a process that emerged , in England in the eighteenth century . It was the result of centuries of incremental developments that were assembled and deployed in the century . Early industrialization involved using water power to run giant looms that produced cloth at a very low cost . This early manufacturing didn use coal and belch smoke into the sky , but it initiated an industrial mindset . Costs could be reduced by relying on inanimate power ( water , then steam , then electricity ) converting production to simple steps that cheap laborers could do ( getting larger and concentrated in an area ( economy of scale ) and cranking out large numbers of the same thing ( This is industry in a nutshell . The advantage of industry was that a company could sell a cheaper product , but at a greater . As this mindset was applied to other goods , and then services , the world was changed forever . Places which had been producing goods for millennia suddenly ( really suddenly ) found themselves competing with a product that was far cheaper . Economist Joseph coined the term creative destruction to describe the process in which new industries destroy old ones . Hand production of goods for the masses began to decline precipitously . They quickly became too expensive in comparison to manufactured goods . Today , hand produced goods are often reserved for the wealthy . A contemporary example of the industrial mode of production is fast food . Looking inside the kitchen of a fast food restaurant will reveal industrially prepared Page 220

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY ingredients prepared just in time for sale to a customer . It is not the same process that you would use at home . In the abstract , companies do not exist to provide jobs or even to make things . Companies exist to produce a . If changing the method of making a is necessary , then the company will do that in order to survive . If it can not , then it will go away . For example , many companies today are highly , for example produces such unrelated products as cars and tuna . What is the connection between the two . They both produce . Industrial Geography How is industry related to geography ?

For one thing , industrial societies have more goods in them . Since the goods are cheaper , people just have more things . For another , the means of production , the factories , shipping terminals , and distribution centers are visible for anyone to see . The lifestyles of industrialized people are different . societies are not regulated by clocks , for example , people wear similar clothing . They listen to globally marketed music . If it seems like you already read this in the chapter on pop culture , you have . Pop culture is a function of industry . Geography is concerned with places and industry changed the way the world operates . It changed the relationships between places . Places that industrialized early gained the ability to economically and politically dominate other parts of the world that had not industrialized . Something as simple as having access to cheap , mass produced guns had impacts far beyond mere trade relationships . TH 02 02 via 04 . Figure Map of And Manufacturing Value Added Share in Total Manufacturing Author David Source Original Work License BY SA Page 221

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY Over time industrial production changed from one that disrupted local economies to one that completely changed the relationship that most human beings had with their material culture , their environment , and with one another . Industry has improved standards of living and increased food production on one hand and it has despoiled environments and promoted massive inequality on the other . Industrialization is about applying rational thought to production of goods . this form of rational thought refers to discovering ways to reduce unnecessary labor , materials , capital ( money ) and time . In the same way that factories changed how things were produced , it also changed where things were produced . Locational criteria are used to determine where a factory even gets built . MARX TENDENCY OF THE RATE OF PROFIT TO FALL Karl Marx spent his working life trying to understand the nature of production . One of the things he noticed was that products have lifespans . When they are invented , they are new on the market and the producer has a monopoly . As soon as a product is released , competitors will quickly begin to provide alternative products at a lower price . The race begins to produce the product at an ever cheaper price , but also with an acceptable level of . This process occurs across both time and space as any mechanism possible to reduce the cost to manufacture the product is discovered and used . Advancements in materials will often occur . Instead of using a metal case , plastic may be good enough . Capital infusion may allow automation of the production . Eventually , after every other possibility to reduce costs is exhausted , the only way to maintain production is to cut labor costs . Few workers will accept a dramatic reduction in pay . It time to move the factory to a place with lower labor costs . Marx called this footloose capitalism . We call it . It the same thing and it has always been part of capitalism . One aspect of this is that we who have grown up in a capitalistic world just naturally expect the price of goods to fall over time . In the United States we experienced a shift in manufacturing from the Northeast to the Midwest , then to the South and West . People in the United States have long moved to follow employment , and only stopped doing so when it left the of the country . FACTORS FOR LOCATION Industrial location is a balance between capital , material , and labor and markets . The goal is overall lowest cost . Sometimes pushing down one category , like labor , can increase other costs , like transportation . Substitution is possible across categories . For example , additional capital can replace labor through automation . Earlier factories were built in cities in order to use the labor that was available there . Building in the middle of nowhere could have created an immediate labor shortage . Of course , labor will also migrate to places with available employment . Page 222

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY Some industrial activities are determined by site , the physical characteristic of a location . If you want to have a coal mine , it is probably a good idea to locate in a place that has coal . This is the most extreme form of restriction , but bear in mind that many places have mineral wealth , but not all of them are extracting that wealth right now . Many places that would otherwise be candidates for resource extraction are not currently being used because the resources can not be extracted and sold for a . If the resource can not make money , it will not be used . Remember that government subsidies can make some resources more than they normally would be . Other industrial locations are products of their situation . The that line the southern side of the Rio Grande ( Rio Bravo in Mexico ) border would not be there if the United States were not on the other side of the river . The proximity to the United States is the determining characteristic in the choice to locate there . Industries moved to Mexico because it appeared to make economic sense to do so . They were able to lower labor costs while remaining within the Canadian market . costs increased initially , but transportation costs overall have fallen due to more methods of moving goods . Were the North American Free Trade Agreement ( to be revoked the situation of Mexico would change , their access to the markets of the United States and Canada would diminish , and the factories that are there would have a much harder time selling their goods . Land ( or ) Costs Classic economics lumped raw materials and energy under the category of land . Few companies bother to buy the land that produces a particular material , nor do they generally invest in power generation , or their own oil . These inputs are subject to the same price pressures as everything other part of the manufacturing process . The land that a factory sits on has become less important over time . In earlier factories , most workers walked to work and factories were compelled to locate on expensive land in cities . That is no longer the case . Due to the widespread diffusion of the automobile , factories can be built in more suburban or even rural areas and workers will commute to the factory . This shifts part of the cost of securing labor onto the workers themselves . It lowers costs for the company . It is still necessary for the company to have access to the transport network , so new factories are usually built to take advantage of existing road networks , often next to interstates . Sourcing materials has become global . inputs like steel are bought wherever they are relatively cheap and are shipped to where they are needed . Whichever source provider has the lowest cost , including shipping , will likely be chosen by the company . If you have ever bough something online , generally you want to know which company has the product with the lowest overall price . Companies operate the same way . Page 223

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY There are differences in energy costs across space . For energy intensive industrial activities , cheap energy is essential . China rose from producing very little steel a few decades ago to leading the world today . It this by leveraging low labor costs and a very cheap energy vast supplies of ( coal . Labor Labor costs can be reduced in a number of ways . One way is simply to pay the workers that you have less money . Workers , however do not like having their pay cut . Sending the work to a place with lower wages has been a common response to higher wages . A large portion of industrial labor requires minimal education . A company can choose to hire high school graduates in wealthy countries for a high wage or equivalently educated workers in poorer countries for far less . The labor pool has thus become globalized . Instead of competing for jobs with the other workers in a particular city , today workers are competing for jobs with much of the human population . industries are particularly sensitive to labor costs . Clothing production has shifted to places with cheap labor as wages in developed countries have increased . Besides the option of simply shipping jobs offshore , there is also the option of replacing workers outright . Most of the industrial jobs that have been lost in the United States in the last 30 years have not been to overseas production , they have been due to automation . Replacing people with machines is as old as industry itself . The difference now is that machines are much more capable than they were in the past and they are much cheaper . Referencing the earlier example of clothing manufacture , production of athletic shirts in the United States got a large boost with the introduction of a factory in Little Rock , Arkansas that relies on a robot called . The factory will produce millions of shirts at very low costs ( in labor per shirt ) This low cost of labor renders in nearly negligible in importance compared to other factors , such as transporting the materials to the factory and transporting the clothes to market . The factory was built by a Chinese company in the center of the United States to minimize transport costs . More factories will likely migrate nearer their markets as the cost of labor becomes less important . Developed countries are already seeing an expansion of manufacturing , but not an expansion of manufacturing employment , due to the of automation . Transportation An important contributor to geographic thinking regarding industrial locations was Alfred Weber ( Weber took the concept of using lowest overall cost for the locations of industry and expanded it . He developed models that held many inputs to manufacturing constant in order to demonstrate the importance of transportation in determining least cost . Weber believed that transportation costs were the most relevant factor in determining the location of an industry . The best way to minimize the cost of Page 224

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY transport depends on the raw materials being transported . There are two kinds of raw material , things that are everywhere ( ubiquitous ) and local raw materials . For the ubiquitous material ( water ) you have more freedom to locate , because it commonly available . In this case , you should build your facility near your market , then you won really need to transport much . We see examples of this in the locations of breweries and manufacture . On the other hand , if the material is only in a particular place ( like bauxite ) then you have some calculating to do . First you need to out if your manufacturing condenses , distills or otherwise shrinks your material . We call these processes reducing . If you aren doing that , but instead took small pieces and assembled them into something that was harder to transport ( like a tractor ) then it is called . In order to minimize transport costs for activities , you want to process them as close as possible to their extraction site . Examples of this are metal smelters and lumber mills . processes are a little more complicated . You need to the least cost point between your source materials ( which may be numerous ) and your market . Remember that the goal is overall lowest cost , so that involves many calculations to determine which is the cheapest location , meaning your location might be in between several your inputs or market . A general rule of this is that these sorts of businesses tend to be fairly close to their markets . There were two last considerations that Weber discussed , agglomeration and . Weber called them secondary factors , because they were less important than the previously mentioned characteristics . Agglomeration is related to the idea of economy of scale . Sometimes there are advantages to having similar industries near one another . Consider the manufacture of computers . Computer manufacturers don make their own components , they buy them , and they use similar tools to put them together , and they use similar labor , and so forth . When industries concentrate in a place they can share some resources and split the cost . This is not to say that this is a conscious process , in many instances it just develops on its own . factors produce of scale and are responsible for redistribution of industry . Figure Mills and Mines Examples Of could be This is a photo of a lead mine in South Dakota in the Century . escalating prices for land or Notice the large piles of waste material left behind . Author John labor which drive production Sauna I Library away from an area . License Public Domain Page 225

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY Reducing Transportation Costs has greatly changed the nature and cost of transportation . In the past , transporting goods required large numbers of people to move goods around . People loaded and unloaded goods at points . bulk points were places like railroad terminals , where goods were loaded onto trains , or ports , where goods were loaded into ships . points had large numbers of people loading and unloading items . changed that process tremendously . Goods are now packed into large metal boxes , then the are moved from point to point . Cranes move the boxes from trucks to trains to ships , then reverse the process the process at the shipping destination . transportation assumes that a container will seamlessly be transported by any number of different shipping methods . The number of people necessary to ship goods plummeted . The speed at which goods moved increased tremendously , since the bottlenecks were removed from the system . is a good example of an innovation that did not require a large technological shift , it simply required rationalizing a system that was labor intensive . Logistics , the commercial activity of transporting goods , is the glue that holds the global production network together . Without relatively inexpensive shipping , many industries would not be able to make goods in distant factories , ship them to other places , and still make a . Figure Shipping Containers Uniform size and shape allow for rapid transport and sorting at minimal cost . Author Frank Source License Page 226

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY Reducing Capital Costs Operating an industry has more costs than materials , labor , and shipping . Other factors such as taxes , regulatory compliance , and incentive packages can either attract of repel manufacturing . These factors increased tremendously in importance . It has become possible for many industries to ignite a bidding war in order to secure increasingly advantageous incentives to locate in a particular place . Tax breaks , construction allowances and other will be paid by the places that desperately struggle to attract industries . This has triggered what has been described as a race for the bottom as places promise more than they can afford in the hopes of securing outside investment . Another consideration is access to capital . Businesses often need investment funds , or credit . Being unable to secure capital prevents many businesses in developing countries from starting or continuing . Countries without banking infrastructure it nearly impossible to raise money to develop their own industries . Companies in countries like this are forced to hunt for backing in other countries . Risk Industries have large sunk costs . Corruption can take advantage of this to demand bribes , protection money , or other expenses that siphon off . High levels of corruption inhibit investment . Industries are risk averse . Places that are politically unstable will also have , since companies will be reluctant to build in places where any investment could be lost in a revolution or other political violence . This doesn mean that industry requires representative government . Many places have experienced tremendous economic development without democracy . It just means that companies have to feel that any money that they invest in a place is safe . Accessing a Market One of the interesting examples of this concept is the number of foreign companies that establish themselves in the United States . Companies such as ( Korea ) and ( Germany ) build products in the United States . A good question to ask yourself would be Why do they do that ?

It turns out that locating in the United States is advantageous for them . First , they can reduce shipping costs , we have already addressed that . Second , although labor in the United States is relatively expensive , it not appreciably different than in their home markets . Third , they may be able to avoid tariffs on imports . Finally , being in the United States places these products near a large market . The North American market is very large , being embedded in it can be advantageous for some companies . Page 227

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY THE EXPANSION ( AND EVENTUAL DECLINE ) OF INDUSTRY . Transnational Corporations Modern industry has become dominated by Transnational Corporations . Transnational Corporations ( have the ability to coordinate and control various processes and transactions within production networks , both within and between different countries . They also have the ability to take advantage of geographical differences of factors of production and state policies . Potential geographical for sales is a . Foreign Direct Investment ( is exactly what is sounds like . Companies invest in other countries . The usual narrative of this in the United States is simply for cheaper labor . The reality is more complicated . Just consider the examples above of the manufacturers who build facilities in the United States . They aren seeking cheap labor . America companies moving production may be seeking to tap into a large pool of labor , but that labor is not as cheap as it was 20 years ago . Another reason for investing in China is the same reason that other companies invest here in North America , to gain entry into a large market . Companies and individuals investing in other countries have numerous motivations . Some of these motivations are altruistic . There is no shortage of entities that seek to use as a mechanism to alleviate poverty . The earlier critique of incentives applies Figure And Manufacturing Value Added Share In Total Manufacturing Author The World Bank Source The World Bank License BY Page 228

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY directly of foreign direct investment , for obvious reasons . Poor and desperate places will sometimes make economic decisions that make little economic sense . has an established history . Initially companies in wealthy countries were mostly interested in extracting raw materials from other , usually poorer , countries . This continues to this day . Countries like , The Democratic Republic of Congo , and Venezuela function almost solely as a source of inputs for other companies based in other countries . Other places have seen investment in factories . Sometimes this is due to very labor , but in many instances , it is due to the fact that their wages are relatively low and they are relatively close to their market . An example of this was seen in Eastern Europe when many of these countries entered the European Union . The next graph is slightly different . It shows the different trajectories of manufacturing in general as part of a countries economy . As you can see , manufacturing as a share of in the United States has been quite low for some time . Manufacturing in China and Korea is much more important , but in both these places , the relative value of manufacturing is falling . In Germany , Japan and Singapore , the value of manufacturing is rising , although at very moderate levels . Note that neither of these graphs account for wages produced from manufacturing employment . Figure Manufacturing Value Added Share In Author The World Bank Source The World Bank License BY Page 229

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY GLOBAL PRODUCTION Hegemony and Economic Ascendency At times industrialization has propelled countries to great economic heights . Britain , The United States and Japan all rode an industrial wave to international prominence . In those countries and others , a ( largely mythical ) golden age centers around a time when workers could earn a wage to secure economic security . This is what the American Dream was . Deindustrialization has changed the economic trajectories of these countries and the people living in these countries . However , it must be noted that countries that have not seen rapid increases in poverty . Wages have been largely stagnant for decades , but they have not generally gone down . The largest difference has to do with relative prosperity for industrial and countries . Countries such as Japan , the UK or the US are no longer far wealthier than their neighbors . In the same way that a market with a particular product reduces the value of that product , the world with industrial capacity lowers the relative value of that activity . Developing countries function as appendages to the larger economies in the world . The poor serve the needs of the wealthy . Unindustrialized countries buy goods from developed countries , or they license or copy technology and make the products themselves . Space and Production In the context of a globalized market , a factory built in one market may not built in another . This is not to say that producing goods is a game , but there are limits to the amount of any good that can be sold . It a valid question to ask why transnational corporations ( have bought into China at rates far greater than in Cuba , Russia , or other Communist or formerly Communist ( to varying degrees ) countries ?

There is only so much spare capacity for production in the world . If one giant country ( China ) is taking all the extra capacity , then there will be none left for others . is simply easier in China , since there is more bang for the buck . This is largely a function of population . The population of China is roughly two times the population of Sub Africa . And China has a single running class , as opposed to 55 different sets of often fractious political classes . If the industrialization of Africa happens at all , it will occur after China and its immediate neighbors who have been drawn into its larger economic functioning have largely their own . An example of this proximate effect is seen in the shift of some industries from China to Vietnam and Indonesia . China industrialization had to do with promoting itself as a huge cheap labor pool , and as a gigantic market for goods . It successfully leveraged both of these characteristics to attract foreign investment , and to gain foreign technology from the companies that have invested in producing goods there . Industrialization overall seems to have slowed . The speed at which China industrialized has not been matched by other countries following China . One current idea is that the world is Page 230

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY in a race between industrial expansion and rapid over capacity of production . In other words , the reason that industrialization isn expanding as rapidly as before is that we are already making enough goods to satisfy demand . Remember that goods require demand . Unsold goods don produce any income . If the factories in the world are already producing enough , or even too much , then new factories are much less likely to be built . Technological advances and the massive industrialization of China might have ended the expansion of industry . It also appears that the highest levels of manufacturing income are well in the past . According to economist Dani , the highest per capita incomes from manufacturing occurred between 1965 and 1975 , and has fallen dramatically since then . This is even considering . Many countries now only see modest improvements in income . This is related to supply and demand . When there are fewer factories , they make comparatively more money . When factories are everywhere , they are competing with everyone . Trade Even more than expansion of industrial production , the world has seen an expansion of trade . Global trade has produced an intricate web of exchanges as products are now designed in one country , parts are produced in 10 others , assembled in yet another country , and then marketed to the world . Consider something as complex as an automobile . The parts of a car can be sourced from any of dozens of countries , but they all have to be brought to one spot for assembly . Such coordination would have been impossible in the past . Individuals can buy directly from another country on the internet , but most international trade is . are able to conduct an internal form of international trade in goods that can be moved and produced in a way that is most advantageous for the company . Tax breaks , easy credit and banking privacy laws exist to siphon investment from one place to another . Because of global trade , improvements in communication and transportation have enabled some companies to enact just in time delivery , in which the parts need for a product only arrive right before they are needed . The advantage of this is that a company has less money trapped in components in a storage facility , and it becomes easier to adjust production . Once again , such coordination at a global scale was not possible even in the relatively recent past . Deindustrialization Historically industrialized countries were the wealthy countries of the world . Industrialization , however , is now two centuries old . In the last decades of the twentieth century , deindustrialization began in earnest in the United Kingdom , the United States , and many other places . Factories left and the old jobs left with them . Classical economics holds that such jobs had become less valuable , and that moving them offshore was a good deal for everyone . goods were cheaper Page 231

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY for consumers , and the lost jobs were replaced by better jobs . The problem with this idea is that it separates the condition of being a consumer from the condition of being a worker . Most people in any economy are workers . They can only consume as long as they have an income , and that is tied to their ability to work . Many workers whose jobs went elsewhere found that their new jobs paid less than their old jobs . What Happens After Deindustrialization ?

The simple answer to the above question is this . The service economy happens ! As manufacturing provides fewer jobs , service industries tend to create new jobs . This is a very delicate balance , however . If you are a old coal miner whose job has been eliminated by automation , it is very for you to simply change jobs and enter the service sector . This transition is very damaging to those without the right skills , training , education , or geographic location . Many parts of the American Midwest , for example , have become known as the rust belt as industrial facilities closed , decayed , and literally rusted to the horror of those residents who once had good jobs there . The city of Detroit , for example , lost nearly half of its urban population from . Meanwhile the state of Illinois loses one resident every 15 minutes as job growth has weakened in the age . However , job growth and productivity in the service economy have strengthened and provide more job opportunities today than the industrial era ever did in the . There are sectors to every economy . Primary ( agriculture , and mining ) Secondary ( manufacturing and construction ) Tertiary ( service related jobs ) The vast majority of economic growth in the world comes in the tertiary sector . This doesn mean that all tertiary jobs pay well . Just ask any worker if the service sector is making them rich ! However , service sector jobs are very dynamic and offer tangible opportunities to millions of people around the world to earn a living providing services to somebody else . We can further break down the service sector into ) public ( the post , public utilities , working for the government ) business ( businesses providing services to other businesses ) consumer ( anything that provides a service to a private consumer . hotels , restaurants , barber shops , mechanics , services ) Traditionally , service sector jobs worked very much like manufacturing jobs in that employees worked regular hours , earned from the employer , gained raises through increased performance , and went to work somewhere outside of their home . Many service jobs in the 21 century , however , have been categorized as the gig economy , in which workers serve as contractors ( rather than employees ) have no regular work schedules , don earn , and often work in isolation from other workers Page 232

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY rather than as a part of a team . Examples of jobs in the gig economy include private tutor , driver , host , blogger , and . Work , in this economy , is not necessarily bound by particular places and spaces in the way that it did in manufacturing . Imagine a steel worker calling in to tell boss that they re just going to work from home today ! Even public schools have adapted to this model in the following manner . As schools cancel class due to weather , the new norm is to hold class online , whereby students do independent work submitted to the teacher even though nobody is at school . As such , some workers are freed up from the traditional constraints of time and place and can choose to live anywhere as long as they maintain access to a computer and the Internet . Services like . corn facilitate a marketplace for freelance writers compose essays for others or for graphic artists to sell their design ideas directly to customers without every meeting one another . The global marketplace continues to be as a place where the traditional relationships between employer and employee are changing dramatically . A word of caution is necessary here , however . As many choose to celebrate the freedom that accompanies work schedules , there is also a darker side in that the traditional contract and social cohesive element between workers and owners is very much at risk . One factor of the century was the development of civil society that fought for and won a host of protective measures for workers , who otherwise could face abusive work conditions . Child labor laws , minimum wage , environmental safety measures , overtime pay , and guards against discrimination were all based upon an relationship that seems increasingly threatened by the gig economy . Uber drivers can work themselves to exhaustion since they are not employees . hosts can skirt environmental safety precautions since they do not face the same safety inspections required at hotels . These are just a few examples , but they are very worth consideration . Regardless of the positives and negatives , the new service economy is having a transformative effect upon all facets of society . Although , the authors of this textbook are all geography professors with from a variety of universities , perhaps the next version of this textbook will simply draw upon the gig economy to seek the lowest cost authors who are willing to write about all things geographical . Will you be able to tell the difference ?

We hope so ! SUMMARY Industrial production changed the relationship of people to their environments . Folk ( cultures used local resources and knowledge to goods . Now the productions of goods and the provisioning of services can be split into innumerable spatially discrete pieces . Competition drives the costs of goods and services downward providing relentless pressure to cut costs . This process has pushed industrialization into most corners of the world as companies have looked further and further to cheaper labor and materials and to more Page 233

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY customers . Industrialization has fueled a change in lifestyle , as goods have become cheaper , they have become more accessible to more people . Our lives have changed . We now live according to a schedule dictated by international production . KEY TERMS DEFINED Back office services services involving personnel who do not interact directly with clients . point point of transfer from one form of transport to another . Bulk reducing industrial activity that produces a product that weighs less than the inputs . The process of transforming a cultural activity into a saleable product . transport system using standardized shipping containers . Deindustrialization process of shifting from a manufacturing based economy to one based on other economic activities . Economies of scale efficiencies in production gained from operating at a larger scale . Footloose capitalism spatial of production . rational form of mass production for and simplifying production . Gig economy a labor market characterized by freelance work . Globalization the state in which economic and cultural systems have become global in scale . transportation system using more than one of transport . Just in time delivery manufacturing system in which components are delivered just before they are need in order to reduce inventory and storage costs . Locational criteria factors determining whether an economic activity will occur in a place . Logistics the coordination of complex operations . Outsourcing shifting the production of a good or the provision of a service from within a company to an externals source . shifting the production of a good or the provision of a service to another country . Supply chain all products and process involved in the production of goods . the management of production . WORKS CONSULTED AND FURTHER READING , 2016 . Tax Battles The Dangerous Global Race to the Bottom on Corporate Tax , 46 . Peter . 2014 . Global Shift Mapping the Changing Contours of the World Economy . SAGE . Page 234

INTRODUCTION TO HUMAN GEOGRAPHY INDUSTRY , David . 2018 . Using International Content in an Introductory Human Geography In Curriculum Internationalization and the Future of Education . Goodwin , Michael , David Bach , and Joel . 2012 . How and Why Our Economy Works ( and Doesn Work ) in Words and Pictures . New York Harry . John 1889 . Mills and Part of the Great Works , Lead City , Still image . 1889 . Gregory , Derek , ed . 2009 . The Dictionary of Human Geography . ed . MA . Daniel . Globalization Isn Killing Factory Jobs . Trade Is Actually Why Manufacturing Is up 40 . Accessed April 21 , Howe , Jeff . 2006 . The Rise of WIRED . Doreen . 1995 . Spatial Divisions of Labor Social Structures and the Geography of Production . Psychology Press . Matthew . 2016 . Industrial Robots Will Replace Manufacturing Jobs and That a Good ( blog ) October , Dani . 2015 . Premature Working Paper 20935 . National Bureau of Economic Research . Sherman , Len . 2017 . Why Can Uber Make Money ?

December 14 , Sumner , Andrew . 2005 . Is Foreign Direct Investment Good for the Poor ?

A Review and Development in Practice 15 ( Zhou , May , and Zhang Yuan . 2017 . Textile Companies Go High Tech in Arkansas USA July 25 , 20 line . Data source World Bank . Page 235