Human Geography: Places and Regions in Global Context Sixth Edition. Geographies of Economic Development. Chapter 7 Lecture

Transcription

1 Chapter 7 Lecture Human Geography: Places and Regions in Global Context Sixth Edition Geographies of Economic Development Wendy A. Mitteager State University of New York, Oneonta

2 Key Concepts Economic development Carrying capacity Sustainable development Division of labor Fair trade Deindustrialization Economic globalization Flexible production systems Figure: Chapter 7 Opener Migrant workers in China boarding a train home.

3 Patterns of Economic Development Three types of changes Structure of region s economy Forms of economic organization Availability & use of technology Unevenness Gross domestic product (GDP) Gross national income (GNI) Purchasing power parity (PPP) Apply your knowledge: What kind of statistics besides GNI provide an indication of international disparities in economic development?

4 Patterns of Economic Development, (cont d) Figure 7.1 GNI is one of the best single measures of economic development. Use this map to compare the core countries with the peripheral and semiperipheral countries.

5 Resources and Development Cultivable land Carrying capacity Industrial resources Figure 7.3 Deforestation of rainforest in Cameroon. Figure 7.2 Major sources of energy are unevenly distributed.

6 Resources and Development Cultivable land Slash and Burn farming Why: Easy to replenish the Earth with nutrients Usually done where land is poor for cultivation Where: Anywhere there is a lot of trees Grasslands not good because of a limited sources for the nutrients Usually not sustainable UNLESS the land is not over-cultivated; Good only for a short period of time

7 Resources and Development Cultivable land Subsistence Farming

8 Resources and Development Carrying capacity the maximum population size of a species the environment can sustain indefinitely, given the food, habitat, water, and other necessities available in the environment.

9 Resources and Development, (cont d) Figure 7.4 Some countries are fortunate in having a broad range of cultivable land. Others must rely on exploitation of one major resource for economic development.

10 Resources and Development, (cont d) Sustainable development Ecological footprint Obstacles Reliance on fossil fuels Rate of growth in periphery Institutional framework Figure 7.6 Promoting local economies Apply your knowledge: Provide examples of renewable energy projects in the U.S. How can they change the ecological footprint? How might their growth be impeded?

11 Resources and Development, (cont d Sustainable development Progress that meets the needs of the present without compromising the ability of future generations to meet their own needs.

12 Resources and Development, (cont d Ecological footprint a measure of human demand on the Earth's ecosystems, the amount of natural capital used each year. The footprint of a region can be contrasted with the natural resources it generates. Green Revolution of 1960 s and 1970 s Goal: Feed as many people as possible Norman Borlaug: Father of Green Revolution

13 Resources and Development, (cont d Green Revolution of 1960 s and 1970 s High yielding cereal grains Expansion of irrigation Hybridized seeds Synthetic fertilizers/pesticides

14 Economic Structure Primary, secondary, tertiary, and quaternary activities Division of labor Manufacturing value added (MVA) Newly industrializing countries (NIC s) Foreign direct investment Transnational corporations (TNCs) Apply your knowledge: Consider a product you own and map out the product s development through the primary, secondary, and tertiary activities.

15 Economic Structure Primary, secondary, tertiary, and quaternary activities Primary Activities: extractive activities: fishing, farming, forestry, mining, etc. Secondary Activities: transformative activities: processing, manufacturing Tertiary Activities: service activities: transportation, retailing (e.g. cashier), maintenance, etc. Quaternary Activities: services involving complex processing and handling of information: education and research, engineering, 2013 Peaon Education, Inc.

16 Economic Structure Where would you find these activities (What kind of country/area): Primary Activities: Secondary Activities: Tertiary Activities: Quaternary Activities:

17 Economic Structure Deindustrialization a process of social and economic change caused by the removal or reduction of industrial capacity or activity in a country or region, especially heavy industry or manufacturing industry. Dependency Theory the notion that resources flow from a "periphery" of poor and underdeveloped states to a "core" of wealthy states, enriching the latter at the expense of the former

18 Economic Structure More Developed Countries (MDC) vs. Least Developed Countries (LDC) Conditions in the labor force for: Men Women Recent College Graduates

19 Primary Economic Activities, 2002 Figure 7.7 The geography of primary economic activities

20 China s Economic Development Figure 7.B The city of Shenzhen Figure 7.C New affluence Figure 7.D Real estate boom

21 Economic Structure, (cont d) Trading blocs Autarky Neoliberal polices Figure 7.8 Manufacturing in South Korea Figure 7.9 World economic forum in Switzerland, 2011

22 Economic Structure Trading blocs a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade, (tariffs and non-tariff barriers) are reduced or eliminated among the participating states.

23 Economic Structure Autarky economic independence or self-sufficiency. a country, state, or society that is economically independent.

24 Economic Structure, (cont d) Figure 7.10 One reflection of dependency: the index of commodity concentration of exports, 2002

25 Economic Structure, (cont d) International debt Elasticity of demand Terms of trade Ratio of prices Import substitution Figure 7.12 Cocoa production, Ghana Apply your knowledge: Determine the current debt of three countries. What main factors have contributed to each countries debt?

26 Economic Structure, (cont d) International debt the total amount a country owes to foreign creditors. The debtors can be the government, corporations or citizens of that country. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.

27 Economic Structure, (cont d) Elasticity of demand is a measure used in economics to show the responsiveness of the quantity desired of a good or service to a change in its price it gives the percentage change in quantity demanded in response to a one percent change in price All other factors have to be constant (ex: income)

28 Economic Structure, (cont d) Terms of trade refers to the relative price of exports in relation to imports and is defined as the ratio of export prices to import prices. It can be interpreted as the amount of import goods an economy can purchase per unit of export goods Ratio of prices

29 Economic Structure, (cont d) Import substitution a trade and economic policy which advocates replacing foreign goods with domestic production. based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products. Problem: Globalization

30 Economic Structure, (cont d) Figure 7.11 The 2008 debt crisis

31 Fair Trade Figure 7.13 Fair trade coffee in Uganda Figure 7.14 A fair trade shop in Canterbury, England

32 Stages of Economic Development Figure 7.15 A model based on the idea of successive stages of economic development, now regarded as overly simplistic.

33 Regional Economic Development Regional inequalities: One area of a country is richer than another. This inequality may be due to differences in natural resource, level of production, and location of industries Apply your knowledge: Identify an example of localized economics functioning in your own community. What industries are clustering together and how can this result in cost savings?

34 Regional Economic Development Geographical path dependence: explains how the set of decisions one faces for any given circumstance is limited by the decisions one has made in the past, even though past circumstances may no longer be relevant

35 Regional Economic Development External economies: The lowering of a firm's costs due to factors outside the control of a company. External economies of scale will increase the productivity of an entire industry, geographical area or economy. The external factors encompass positive externalities that reduce the firm's costs as well as negative factors that may hurt a company s profits.

36 Regional Economic Development Initial advantage: the critical importance of an early start in economic development; a special case of external economies Localization economies: Firms that benefit by being close to each other

37 Regional Economic Development, (cont d) Webs of functional interdependence Agglomeration effects Backward and forward linkages Ancillary industries Cumulative causation Backwash effects Apply your knowledge: Identify and research three cities that have experienced a backwash effect and the reasons for the backwash effect in each locale.

38 Regional Economic Development, (cont d) Webs of functional interdependence Three Types Pooled Interdependece is perhaps the loosest form of the three. In this type of interdependence, each organizational department or business unit performs completely separate functions. While departments may not directly interact and do not directly depend on each other in the pooled interdependence model, each does contribute individual pieces to the same overall puzzle Sequential Interdependence occurs when one unit in the overall process produces an output necessary for the performance by the next unit. Perhaps the most obvious example of sequential interdependence is an assembly line. Reciprocal Interdependence is similar to sequential interdependence in that the output of one department becomes the input of another, with the addition of being cyclical. Reciprocal models are the most complex and difficult to manage--the Business Intelligence website notes that "one unit can change the rules and affect everyone else at any time."

39 Regional Economic Development, (cont d) Agglomeration effects benefits that firms obtain by locating near each other ('agglomerating').

40 Regional Economic Development, (cont d) Backward and forward linkages Backward Linkages: Channels through which information, material, and money flow between a company and its suppliers and create a network of economic interdependence. Forward Linkages: Distribution chain connecting a producer or supplier with the customers.

41 Regional Economic Development, (cont d) Ancillary industries Businesses which manufacture parts and components to be used by larger industries.

42 Regional Economic Development, (cont d) Cumulative causation refers to a self-reinforcing process during which an impulse to a system triggers further changes in the same direction as the original impulse, thus taking the system further away from its initial position in virtuous or vicious circles of change that may result in a continuing increase in...

43 Regional Economic Development, (cont d) Backwash effects Economic growth provides benefits and costs in the region in which it occurs Jobs, more spending, more homes, business growth Alternatively, it has adverse effects on the nearby localities if growth in the core region attracts people and economic activity away from these peripheral areas. Began in trade theory in a book by Gunner Myrdal (1957).

44 Regional Economic Development, (cont d) Modification of regional core-periphery patterns Spread effects Import substitution Agglomeration diseconomies Deindustrialization Creative destruction Figure 7.18 An abandoned Packard automobile plant in Detroit, Michigan.

45 Regional Economic Development, (cont d) Modification of regional core-periphery patterns

46 Regional Economic Development, (cont d) Spread effects (syn: trickle-down effect) the diffusion outward of the benefits of economic growth and prosperity from the power center or core area to poorer districts and people

47 Regional Economic Development, (cont d) Agglomeration diseconomies The inefficiency and loss that results from businesses being located near each other. A typical cause of this loss is the unfamiliarity of the holding company management with the activities and the management requirements of subsidiaries in unrelated fields.

48 Regional Economic Development, (cont d) Creative destruction the incessant product and process innovation mechanism by which new production units replace outdated ones. It was coined by Joseph Schumpeter (1942), who considered it 'the essential fact about capitalism'.

49 Regional Economic Development, (cont d) Government intervention Growth poles Figure 7.19 The London congestion charge was introduced in Apply your knowledge: Identify two regions that have experienced deindustrialization. What industries were lost? Did they experience creative destruction? Has government intervention played a role?

50 Government intervention Types of Intervention in U.S.A. Taxes, Tariffs & Tax Credits Minimum Wage Quotas Other Countries Total Control (Communist)

51 Growth poles economic development is not uniform over an entire region, but instead takes place around a specific cluster. often characterized by core (key) industries around which linked industries develop, mainly through direct and indirect effects. Core industry examples: automotive, aeronautical, agribusiness, electronics, steel, petrochemical,

52 Globalization and Economic Development Figure 7.20 The impact of containerization on world trade Figure hour trading between major financial markets

53 Globalization and Economic Development, (cont d) Figure 7.22 Banks in trouble: customers in line in Santa Monica, Figure 7.23 U.S. President George W. Bush addresses the nation about the financial crisis on October 10, 2008.

54 Economic Globalization Global assembly lines and supply chains Conglomerate corporations TNCs and globalization Flexible production systems Fordism: System of Mass production created by Henry Ford Neo-Fordism: stressing the continuity of current systems of work organization Figure 7.26 Nestle is the main food company for Disneyland Paris

55 Economic Globalization Just-in-time production Vertical disintegration Strategic alliances Export-processing zones Homogenization of consumption Experience economy Figure 7.27 Principal maquiladora centers on the United States Mexico border

56 Wal-Mart s Economic Landscape Apply your knowledge: Consider the eateries you dine at most often. Are they locally owned or chains owned by large corporations? If they are chains, research what business they replaced in that location. Figure 7.E Wal-Mart locations in the Atlanta metropolitan region

57 Geographies of Office Employment Decentralization Back-office functions Outsourcing Clusters of specialized offices Offshore financial centers Figure 7.30 Workers at a call center in India.

58 The Pleasure Periphery Tourism Alternative tourism: a process which promotes a just form of travel between members of different communities. It seeks to achieve mutual understanding, solidarity and equality amongst participants. Figure 7.32 Ecotourism: birdwatchers in Panama Apply your knowledge: Choose a popular tourist location and list costs and benefits of tourism for this place and its inhabitants.

59 Future Geographies Availability of resources Expansion of world economy Globalization of industry Transportation technologies High-speed rail systems Smart roads Smart cars Figure 7.34 Energy-consuming goods: in an Apple Store in Beijing, China

60 End of Chapter 7