Economic Geography

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Economic Geography
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Economic Geography

• The study of the flow of goods and services
  through space, as well as how people provide for
  themselves in different places.

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Commodity Chain

• Linking producers to consumers

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Classification

• Underdeveloped, Developed, and Developing
  Nations
• To say a country is underdeveloped would be
  politically incorrect, in light of the fact that
  the word underdeveloped had a negative
  connotations geographers developed a new way to
  groups nations in the core-periphery model.
• This model characterized nations into either
  core, semi-periphery, and periphery nations.

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Measures of Development

• GNP-the measure of all the goods and services
  produced by a country in a year.
• Provides a very vague vision of productivity. For
  it fails to account for the lost through the
  exploitation of natural resources.
• GDP- similar to GNP but it omits any investments
  abroad.
• Example Japan has a huge amount of investments
  abroad there for the GNP would be significantly
  larger than the GDP.

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Classification

• Characteristics of a Core Nation
• Have achieved high levels of socioeconomic
  prosperity and high standards of living
• Contain world cities such as London, Tokyo, and
  New York which serve as global centers of
  economic activity.
• These nations include the U.S., Germany, Great
  Britain.
• Technology, Education, Research

• Characteristics of a Semi-Periphery Nation
• Newly industrialized countries with diverse
  economic opportunities but have extreme gaps
  between rich and poor.
• These nations are usual in a transition stage to
  becoming a core nation.
• Examples Chile, brazil, India, China, and
  Indonesia

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Classification

• Characteristics of a Periphery Nations
• Usually poor regions that are very dependent upon
  core nations.
• Low levels of economic productivity and lack
  infrastructure and have rapidly growing
  populations.
• These place have benefited little from
  globalization.

• Keep in mind that the core-periphery model focus
  on the economic relationships among places.
• The slow word of the periphery is often
  compared to the fast world of the core because
  of the lack of technology and communication in
  periphery nations.

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Advantages of Production in Periphery Nations

• Cheap Labor
• Loose Labor Laws
• Loose Environmental Regulations
• Low Taxes
• The distribution of natural resources by locating
  different aspects of production in different
  countries.
• Note Most MNCs are conglomerate corporations
  composed of many smaller firms that serve
  different functions. (i.e. distance to natural
  resources)

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World-System Theory

• Immanuel Wallerstein said the world was and
  interdependent system of countries inked by
  political and economic competition.
• When political and economic relations
  strengthened the areas connected (core nations)
  begin to thrive but the nation not connected
  (periphery nations) did not get these new
  technological advancements and innovations. This
  was Wallersteins theory as to why there are
  core, periphery, and semi-periphery nations.

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Impact of Industrialization/Development

• Neocolonialism the entrenchment of the old
  colonial system under a more economic than
  political society.
• Tourism usually places a negative affect on
  periphery nations because eventhough it may
  support an economy it may take away from the
  local culture. It also takes away from the local
  entrepreneurs.
• Tourism may promote awareness about a particular
  culture and intercultural contact it takes a
  harsh turn on the cultural landscape.

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Models of Development

• Liberal Model
• Assume that all counties are at the same stage
• All countries are capable of development

• Structural Model
• general term for models of economic development
• A result of historically derived power relations
  within the global economic system
• Only certain countries can become developed
• The structure is already in place (maquiladoras)

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Modernization Model-Rostow (1960)

• This model states that all countries follow a
  similar path through 5 stages of development.
• Traditional subsistent farming, rigid social
  structure, little technological change.
• Preconditions progressive leadership,
  diversification, more flexibility
• Introduction to technology such as the steal plow
• Ability to mass produce food
• Infrastructure is built
• Development of political organization
• Charismatic leader

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Modernization (continued)

• Take-off Manufacturing, some type of industrial
  revolution, sustained grown occurs. Urbanization
  increases, industrialization continues, mass
  production.
• Drive to Maturity technology diffuses,
  specialization, international trade,
  modernization, population growth.

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Modernization (continued)

• High mass consumption High incomes, Widespread
  productions, mainly service sector jobs.
• International trade

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Dependency Theory

• The structuralist view to Rostows model.
  Relationship between countries control and limit
  economic development
• Development does not happen everywhere due to
  dependence on a core nation for money

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Industrialization (Regions)

• Soviet Union 90 of coal mined.
• Largest manufacturing complexes.
• After WWII, industrialization continued. Dames
  were created.
• Lack of coal with poor quality.
• Four Tigers South Korea, Taiwan, Hong Kong, and
  Singapore.
• Tied to a shift in labor intensive industries.
• Created mainly automobiles, grand pianos to
  calculators and computers.
• Europe Began to expand after WWI
• Began in Italy, Spain and Scandinavia
• Successful in the Ruhr
• Industry rebounded through much of the continent
  while maintaining its position in the globe

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Industrialization (continued)

• North America
• U.S. was the industrial power
• Canada was a big part as well
• American manufacturing Belt was formed and
  extended

• Russia/Ukraine
• St. Petersburg
• Ukraine was threatened by the German army WWII
• Reassembled in Samera

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Changing World

• The Fall of the Soviet Union
• Led to the establishment of international
  boundaries. For example Ukraine became
  independent and Russia lost one of it key
  industrial heartlands, which took a toll on the
  supranationalism that was established.
• Major Political and Economic Changes in
• Mexico, Brazil, Thailand, and Malaysia
• Until the end of the 1980s there were three
  major political-economic blocs
• First World The Capitalist
• Second World The Communist
• Third World Mainly mixed economies
• Due to the collapse of the Soviet Union, and the
  new polcies implemented by Tanzania, and Ethiopia
  the 3rd World party was no more.

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Industrialization (continued)

• Eastern Asia
• Japan and China
• Where large-scale industrialization 1st took
  place
• China
• Industrial expansion took place during communism
  time
• Included manufacturing districs

• Japan
• Limited resources
• Main manufacturing made from raw materials
  imported from the whole world
• Established colonies
• Four Japanese districts

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Secondary Regions

• Special Economic Zones (SEZ)
• Open Cities and open coastal areas to
  encourage foreign investment

• Secondary areas
• Thailand, Malaysia, Indonesia, and Vietnam
  (possibly the Philippines
• Most of the pacific rim

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Categories of Economic Activities

• Primary Economic Sector
• These are the countries that harvest and extract
  raw materials.
• Activities include fishing, agriculture,
  ranching, and mining.
• Nations who do these kinds of activities are
  usually undeveloped nations trying to grow their
  economy.
• Examples Vietnam, Laos

• Secondary Economic Sector
• These are the countries that are associated with
  the assembly of raw materials in to goods for
  consumption.
• Activities include Manufacturing, production of
  metal, and textile production.
• This type of activity is characteristic to
  undeveloped and developing nations.
• Example Japan

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Categories of Economic Activities continued

• Tertiary Economic Sector
• Involved with the exchange of goods produced,
  from the manufacturer to consumer in the
  secondary service sector.
• Activities include offices, banks, hospitals,
  and other basic service jobs.
• These Nations are usually developing and
  sometimes developed nations.

• Quaternary Economic Sector
• Research and development, teaching, tourism, and
  other activities that have to do with generating
  or exchanging knowledge.
• These jobs usually require a higher level of
  education and are characteristic to developed
  nations.
• Examples U.S., Great Britain, Germany

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Deindustrialization

• Deindustrialization is when industrial facilities
  leave an area, taking the economic base with
  them.
• This occurred in places like the Midwest, Central
  Britain, the Great Lakes, and Flint, Michigan.
• Example Flints economic base was in General
  Motors automobile industry. It moved to Mexico
  for 1)Cheaper Labor, 2) Flexible environmental
  regulations, 3)Inexpensive Land, and 4) Enticing
  tax breaks. Because of this the economy went
  into a slump. This par of the Midwest is now
  known as the Rust Belt.

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Deindustrialization Continued

• When one regions economic gain translate into
  anothers economic loss it called the backwash
  affect also know deglomeration when a firm leaves
  a region for to start up in a distant place.
• One of the main reason firms began to move is
  because of the time-space convergence which is
  when the absolute distance between to places
  decreases because of the increase in technology
  and communication.
• While deindustrialization was hurting some
  regions other were experiencing a different kind
  of economic rev or high tech boom.
• With the rise of this new economy, nations became
  transnational or MNCs (Multi National
  Corporations).
• The rise of these new transnational nations was
  attributed to the advantages of production in
  periphery nations.

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Deindustrialization Continued

• Export-processing zones were also created through
  deindustrialization. These zones wer designated
  for manufacturing, and were often accessible for
  distribution, and worked well with the 5
  advantages to production in periphery nations.
• In North America NAFTA was created in 1994 as a
  result of deindustrialization. This agreement
  allowed for free trade between the U.S., Canada,
  and Mexico. This brought economic growth and
  rising standards of living, which also
  strengthened the rules and procedures governing
  trade and investment.

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Shifts in Manufacturing

• Heavy industries were limited to N. Europe, E.
  Asia, N. America, Britain, France, Russia,
  Germany and Japan. These countries were known as
  industrial countries.
• The geography of industrial production has
  shifted from core nations to periphery nations.
• Many firms have relocated their factories to
  less-developed nations where it is cheaper to
  produce goods. For example when Multinational
  Corporations moved their factories to Mexico
  called maquiladoras.

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Pre-industrial World

• Industrial development did not being with the
  Industrial Revolution. It began during that
  period and diffused from certain areas of
  innovation to other parts of the world.

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Industrial Revolution

• During the 18th century, European markets were
  growing and there was not enough labor to keep
  pace with local or overseas trade.
• Better machines were needed
• the steam-driven engine was invented called the
  power loom, which revolutionized the weaving
  industry
• Affected transportation and communication
• . The 1st railroad was opened in 1819.
• The Industrial revolution diffused eastward.

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Webers Least Cost Theory

• Transportaion The site chosen must entail the
  lowest possible cost of moving raw materials to
  the factory and finished products to the market.
• Labor the availability of cheap semiskilled
  labor.
• Low price goods
• and low-wage workers.
• Agglomeration happens when a substantial number
  of enterprises cluster in the same are in a large
  industrial city that can provide assistance to
  each other through shared talents, services and
  facilities.

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Shifts in Manufacturing Continued

• Wealthier nations were shifting to information
  and service-based economies.
• Their focus was on research and development,
  marketing, tourism, sales and telecommunications.
  
• These jobs generally provided better pay, safer
  working conditions, less pollution, and higher
  standard of living. Yet, they required more
  education.
• Newly industrialized countries include Mexico.
  China, and Malaysia.

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Impact of other Variables on Economics

• Infrastructure
• Energy
• Government