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Industrial Growth in the LEDW and Multinationals

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Know how and why some LEDCs experience more industrialisation than others. ... The greatest industrialisation has occurred in the NICs that have passed the ... – PowerPoint PPT presentation

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Title: Industrial Growth in the LEDW and Multinationals


1
Industrial Growth in the LEDW and Multinationals
  • Learning Objective
  • 1. To understand how the manufacturing industry
    has developed in some LEDCs.
  • 2. To understand the importance of
    multinationals.

2
What you need to know
  • You need to
  • Be aware of the reasons for industrial growth in
    LEDCs.
  • Recognise the importance of multinationals to
    this growth.
  • Be aware of the role of multinationals in LEDCs.
  • Be aware of the possible economic, social,
    political and environmental consequences of
    industrial growth in LEDCs.
  • Know how and why some LEDCs experience more
    industrialisation than others.
  • Understand the term interdependence
  • Be aware of the consequences of interdependence
    for LEDCs and MEDCs

3
Industrial Growth in the LEDW
  • Industrial growth has occurred in many countries
    in the LEDW.
  • It is estimated that about 40 of the working
    population is in the formal sector, employed by
    the state or by multinationals (transnational)
    corporations.
  • The remainder is in the informal sector.
  • Large-scale, capital-intensive manufacturing
    industry is seen as important by governments, and
    incentives are provided to attract it.

4
Variable industrial growth
  • The greatest industrialisation has occurred in
    the NICs that have passed the take off stage
    and are approaching high mass consumption. The
    reasons for this include
  • A well-educated, flexible and cheap labour force.
  • Clear government support for industry.
  • Free movement of imports and exports.
  • Good accessibility and communication links.
  • Ease of capital formation.
  • Lack of restrictions on multinationals.
  • At the other extreme, some LEDCs (particularly in
    Africa) have experienced very little
    industrialisation. Reasons include
  • War, drought and famine (all of which destroy the
    agricultural base).
  • Lack of natural resources.
  • Political instability.
  • Corruption.
  • Poor infrastructure.
  • Dependency on the former colonial power.

5
Questions
  • Look at pages 250/1 of the AS textbook.
  • Display the information in figure 1 on a graph.
  • Describe what figure 1 shows about manufacturing
    industry in the LEDW.
  • Explain why some LEDCs have industrialized more
    than others.

6
Newly Industrialised Countries
  • The term NIC is generally applied to nations that
    have undergone rapid and successful
    industrialisation since the 1960s.
  • These countries have experienced rapid growth in
    their manufacturing output and exports over
    recent decades.
  • Examples include Brazil, Taiwan, Singapore and
    South Korea.

7
Case Studies
  • China
  • Malaysia

8
Questions
  • Examine the reasons for economic growth in a NIC
    you have studied.
  • Examine the impact of industrial growth on a
    country in the LEDW you have studied.

9
Multinational (transnational) Companies
  • Companies with business interest in many
    different countries, such as BP, Nestle and Ford.
  • This makes them global companies operating in
    both MEDCs and LEDCs, although the majority of
    the headquarters of these companies are in the
    USA, Europe and Japan.
  • Multinational are believed to employ over 30
    million people worldwide.
  • The largest 100 multinationals, led by oil
    companies and car manufacturers, controlled
    nearly half of the worlds manufacturing in 1990.

10
Multinational (transnational) Companies
  • Multinationals, with their capital and
    technology, have the power to choose what they
    consider to be the ideal locations for their
    factories.
  • The benefits of a move to the LEDW are
  • Cheaper labour, particularly in developing
    countries.
  • Circumventing trade barriers.
  • Tapping market potential in other world regions
  • Avoidance of strict domestic environmental
    regulations.
  • Exchange rate advantages.

11
Case Study
  • The Car Industry

12
Past Exam Questions
  • Why are multinational companies described as
    global companies?
  • The map shows the country of origin of the
    worlds 500 largest companies
  • Describe what the map shows about the
    distribution of the headquarters of the worlds
    500 largest companies.

13
The impact of the changes
  • There have been important economic, social,
    political and environmental impacts resulting
    from industrial growth involving multinationals
    in LEDCs.

14
Past Exam Question
  • Identify and comment on the economic and
    environmental impacts of multinationals on a
    Newly Industrialised Country (NIC) you have
    studied.

15
  • Globalization - The increasingly international
    manner in which both manufacturing and service
    companies are operating.
  • Interdependence Describes the relationship
    between MEDCs and LEDCs through trade, foreign
    investment, aid and migration. The relationship
    tends to favour the MEDCs, placing the LEDCs in a
    position of dependency.

16
Questions
  • Look at page 254 of your AS textbook.
  • 1. What is meant by i) globalization ii)
    interdependence?
  • 2. How does globalization i) help and ii) hinder
    the economic development of LEDCs?
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