Information Technology (IT) Industries in the S4-5 Geography Curriculum

1
Information Technology (IT) Industries in the
S4-5 Geography Curriculum

• Dr. Becky P.Y. Loo
• Associate Professor
• Department of Geography, HKU

2
Information Technology (IT) Industries in the
S4-5 Geography Curriculum

• What?
• Where?
• Why?
• How?
• Conclusion

3
What?
What is information technology?

• Desktop computer?

• MP3?

• Mobile phone?

• Telephone line?

• Electronic dairy?

• E-mail account?

• Radio?

• Generate, process and exchange information

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• Oral face-to-face contact
• Simple pictorial presentation

Old IT

• Written language

• Printing

e.g. paper, ink, printing press

• Late 19thC and early 20thC
• Mechanical, electromechanical
• Early electronic technologies

New IT

• e.g. typewriter, camera, telephone, telegraph

• After the 1950s
• Microelectronic technologies

• e.g. computers, robots, fibre optics

• Computer

Telecommunications
Convergent IT
generate process
exchange

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What are information technology industries?

• Standard Industrial Classification (SIC) (1972)
  (Varga, 1999)

Information technology
357 Office computing and accounting machines
361, 3825 Electrical transmission and
distribution equipment
365 Radio and television receiving equipment,
except communication types
366, 367 Electronic components and accessories,
communication equipment

• Information technology sector (Norton, 1999)

• Large computers

• Personal computers

• Software

• Semiconductors

• Semiconductor equipment

• Communications

• Medical technology (biotechnology instruments)

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Where?
Global level National level Sub-national
level
N. America? Africa? Europe? Asia?
?
?
?
USA? Mexico? Germany? Yugoslavia?
Japan? Burma?
?
?
?
Silicon Valley? Hollywood? Munich? Berlin?
Tokyo? Sendai?
?
?
?
IT industries are highly localized at different
spatial scales.
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Case study The silicon valley

• San Francisco Bay

• 3,400 square km

• Flanked by the Coastal Range

• Valley 1/3 of the total area

• Spanish colonizers in the
• late 1700s

• Agrarian economy

• Santa Clara county

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1930s

• Prof. Frederick Terman, Electrical Engineering,
  Stanford University

• Setting up commercial enterprises with
  professional knowledge

1940s

• No. 15 most productive agricultural counties in US

• 1/3 of Californias annual crop of plums,
  cherries, pears apricots
• Stanford Research Institute

1950s

• WWII and the outbreak of Korean War

• Federal funds for electronics research and
  development

• 1950-1954

• Military prime contracts to California 13 billion

• 14 of US total

• War-related aerospace and electronics enterprises
• Stanford Industrial Park, Stanford Research Park

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1960s

• Throughout the entire Cold War period

• Department of Defenses electronics-based programs

Distinguishing characteristics at early stages

• Large supply of scientific and engineering
  manpower

• Federal defense and aerospace contracts as huge
  markets

• Easy access to venture capital in San Francisco

1970s

• Right place to be

• Over 40,000 new jobs a year

• 1 new jobs

• 2-3 new jobs in other sectors

• Multiplier effect

1980s

• Population 1.25 million

• Worlds most intensive complex of high-tech
  activity

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Electronics Employment
Hi-tech in total employment of the Silicon Valley
9.7
1959 1965 1970 1975 1980 1985
20.9
39.5
55.7
69.8
78.9

• Computers, other office machines, communications,
  semiconductors, other electronic components,
  missiles/parts, instruments, drugs, software/data
  processing, IC labs, electronic wholesale,
  computer wholesale

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Why?
Open Windows of Locational Opportunities

1. Discontinuity nature

Away from old centres

1. Innovative milieu ability to create favourable
   production environment.

Lack of favourable factors not important

1. Chance importance of generic, as opposed to
   specific factors of production

Widely range of suitable areas
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Innovative milieu
Three reasons for localized knowledge
creation and accumulation
1. Nature of the innovation process

• Formal and informal networks for knowledge
  exchange

1. Incremental reduction of technical and economic
   uncertainty

• Technical feasibility

• Market acceptability

• Trial and error approach

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1. Continual interaction between related firms

• Joint development work

• Sensitive information

1. Face-to-face contacts in the exchange and
   creation of new knowledge

• Informal channels

• Tacit knowledge

• Direct observation of products and production
  process

Material elements
Web of relationship
Immaterial elements
Institutional elements
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2. Barriers to spatial diffusion

• Limited mobility of physical, human social
  capital

• Geographical inertia

Speed
Costs
Led time
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3. Tapping

• Outside resources

• People

Firms
Capital
Ideas
Technology
Patents

• By outsiders
• Right place to be

• By incumbents
• Role of TNCs

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Case study Silicon Valley
1930s-1940s

• Not particularly strong

• Stanford University

• Other Universities e.g. MIT in engineering

• Other commercial clusters e.g. laboratories of
  IBM, Bell

1960s

• Stanford University

• PhD degree

• Part-time honours programmes

• Industry-university research sharing and seminars

• Local laboratories recruiting nationally

• SRI, NASAs Ames Research Center, IBM, ITT,

• Important to small firms and young semiconductor
  industry

• Unusually high degree of interactions

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• Physical capital

• Supplies of specialized inputs and services

• Photomasks, testing jigs, chemicals, silicon and
  special production equipment

• Human social capital

• Highly desirable lifestyle (creation of social
  cultural milieu)

• Social status

• Recreational opportunities
• Suburb lifestyle
• Horse owners

• Switch jobs without relocating

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• Outside people

Young scientists from all over the country

• To land jobs

• To start their own firms

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• Outside technology

• New firms

• Inflow of capital

• Local industry liberally financed with venture
  capital

• Success of Fairchild

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• Financial support from San Francisco
• A large pool of wealthy individuals and families
  with discretionary incomes

• Management consulting house

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How?
Flexible production
Post-Fordism

• Specialized production

• Flexibly deployed (increasingly non-union) labour

• Flexible machines

• External economies of scale

• Agglomeration economies

• Spatial division of labour

• Vertical disintegration within each product group

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• Transformation within the capitalist economy

Labour-intensive industries
Capital-intensive industries
Low-technology components/process
High-technology components/process
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1. Different stages do not need to be in
geographical proximity

• High-level scientific, technical engineering
  personnel

• Pure production environment

• Suitable utilities

• Pure water supply
• Waste disposal facilities

• Low-skill labour, female

• Clean environment

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2. Low weight-high-value characteristics
Which stage is the most mobile?

• Stage 5 -- Assembly packaging

• Low-labour cost areas

3. Differential impacts of technological change
on different stages
Which stage is the most profoundly affected?

• Stage 3 Wafer fabrication

• New lithographic techniques
• Automation

• Increasingly capital- research- intensive

How much money is required?
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1960s Early 1970s Early 1980s Late 1980s
1996

• Roughly 2 millions

• 15 20 millions

• 50 75 millions

• 150 millions

• 1 billion to 2 billions

• Rise of the fabless semiconductor firms

• USA in 1980s

• Design house, product design and development

1
In-house

• Quality assurance, marketing, sales, customer
  support, testing

4
6

• Raw wafer manufacturing

• And wafer fabrication subcontracted to outside
  firms

Contract out
2
3
5

• Chip assembly

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Conclusion

• One of the many approaches

• Industrial geography is always changing

• Some major trends and characteristics

• Information sharing vs teaching kit guides