CHAPTER INTRODUCTION
Ever since the Industrial Revolution, the growing demand for resources, the expansion of manufacturing and trade, and the technological innovation have worked to produce an increasingly interconnected global economy. Almost all places are in some way part of the web of production, exchange, and consumption that make up that economy—and their position in that web has significant social consequences Those in the developed core tend to be in the drivers seat, whereas those in the periphery have far less control. Tracing the historical geography of industrialization can tell us much about why some areas are in a more advantageous position that others, but that is not the entire story.
Changing Patterns
The declining cost of transportation and communication along with changes in the production process, have led to an enormous expansion of the service sector (activities such as transportation banking retailing, administration and decision making are some examples). Activities do not generate an actual tangible product. This transition has primarily occurred in the industrialized core. The service sector is sometimes broken down into three categories: tertiary, quaternary, and quinary industries. Over the past 30 years this growth in service-related activities has been accompanied by significant deindustrialization in the core industrial economies This shift had its roots in dramatic decreases in the cost of transporting goods, the increasing mechaniz4tion of production the growth of the public sector, and the rise of new information and communication technologies.
The changes of the past three decades have not fundamentally altered global patterns of economic well-being, but they have produced significant new spatial orders. They have caused shifts in the locus of production, altered patterns of regional specialization and fostered new centers of economic growth. Deindustrialization in the core has also led to the growth of labor-intensive manufacturing in the periphery where labor costs are dramatically lower and profits thus higher. Such manufacturing ranges from shoes and apparel to computers, automobiles, and television sets. The next time you purchase such items, check and see where they were manufactured or assembled.
Global Dimensions of Economic Activity
To understand the economic shifts that have occurred over the past few decades we must look beyond individual places to the global scale, for both the core and periphery have been significantly changed. The phrase new international division of labor refers to the set of relationships that define the contemporary world economy. Whereas earlier in the twentieth century economic relationships were defined by an industrialized core and a resource-exporting periphery, today the geography of the global economy is far more complex. The countries and regions outside the core that have increased their manufacturing output most rapidly in recent decades are shown in text Figure 27-1. Lying behind the patterns shown is a set of developments that give meaning to the phrase ‘new international division of labor.” In the traditional core, the shift away from heavy industry and toward the service sector has been accompanied by the rise of labor-intensive manufacturing in new locations More labor-intensive manufacturing particularly assembly activities, is likely to be located in peripheral countries where labor is not only cheap, but regulations (including environmental controls) are few, and tax rates low. Elaborate trading networks and financial relations support the economic web at the heart of the new international division of labor. This new pattern has linked the worlds economies more closely together, but it carries with it patterns of interaction that favors some areas over others.
Specialized Patterns
Developments discussed so far—the growing connections between the developed core and the newly industrialized countries, the decline of the older industrial areas, and the emergence of assembly-style manufacturing in the periphery—are not the only significant changes that have shaped the new global economic picture. One change that is altering the economic landscape of the contemporary world is the development of a set of links between world cities—major urban centers of multinational business and finance; the control centers of the world economy. These cities are not necessarily the largest in terms of population, nor are they the greatest centers of manufacturing. Instead, they are the places where the world’s most important financial and corporate institutions are located and where decisions are made that divide the world economy. The basic pattern is shown in text Figure 24-3, which shows that most of the major world cities are located in the developed core. Thus a global economic geography dominated by nation-states is giving way to one in which world cities and multinational corporations play an increasingly significant role.
Time-Space Compression
A key theme of the last few decades is captured by the phrase time-space compression—a set of developments that have dramatically changed the way we think about time and space in the global economic arena. The rise of the World Wide Web plays into the time-space compression. It is too early to know what the full impact of the Web might be, but its role in reducing the importance of distance is self evident. It also clearly plays a role in the decentralization of economic activity.
CHAPTER QUIZ
MULTIPLE-CHOICE QUESTIONS
1. The mass-production assembly line was pioneered by:
a. J.P. Morgan
b. Henry Ford
c. Andrew Carnegie
d. Henry Kaiser
2. Service industries are commonly referred to as:
a. secondary industries
b. tangible industries
c. primary industries
d. tertiary industries
3. One of the fastest-growing segments of the tourist industry is:
a. golfing
b. fishing
c. cruising
d. birding
4. In the late l990s, five regions accounted for well over 75 percent of the worlds total output of manufactured goods. Which of the following is one of these?
a. western Russia and Ukraine
b. southeastern Australia
c. Eastern Europe
d. South Asia
5. A number of so-called newly industrialized countries now have emerged as contributors to the global manufacturing base. Two are in the Americas and these are:
a. Chile and Brazil
b. Brazil and Mexico
c. Argentina and Chile
d. Mexico and Venezuela
6. Commercial production of television sets began after:
a. the Korean War
b. World War I
c. World War II
d. the Vietnam War
7. The American ideal of the university town originated in:
a. Italy
b. England
c. France
d. Germany
8. Maquiladora plants are an example of special economic zone development; these particular ones are located along the border between:
a. the United States and Canada
b. Mexico and the United States
c. Spain and Portugal
d. Italy and France
9. For many decades the Rühr Valley was associated with what kind of industry.
a. iron and steel
b. textiles
c. footwear
d. computers
10. Which continent has none of the World Cities that are becoming dominant in the global economy.
a. South America
b. Asia
c. Africa
d. Australia
TRUE/FALSE QUESTIONS
1. The mass-production assembly line, pioneered by Henry Ford, did not affect any other industries except the making of cars. (TF)
2. Service industries belong in the tertiary industry category. (TF)
3. One factor causing older industrial districts to decline is newer factories building elsewhere. (TF)
4. The rise of new core industrial regions has not shifted the relative importance of older regions. (TF)
5. Research and development activities tend to be concentrated in the periphery. (TF)
6. Singapore ’s industrial growth can largely be traced to its geographical location. (TF)
7. Many service industries do not need raw materials nor use large amounts of energy. (TF)
8. World cities are the largest in terms of population, and are the places where decisions are made that drive the world economy. (TF)
9. California ’s Silicon Valley ” is an example of a high-technology corridor. (TF)
10. The World Wide Web is playing a role in the decentralization of economic activity. (TF)
STUDY QUESTIONS
1. Discuss the global shift in industrial production including the tertiary sector—where and why. How and why has location changed in these industries? Discuss foreign investment and its role in location.
2. What event of the 1970s changed the role of core industrial regions? Discuss the service sector and its three categories, also discuss the largest service industry and its impact on countries.
3. How do world cities fit into the picture of today’s global economy? Where are they located (Figure 27-3)?
4. List and define the different kinds of specialized economic zones. Where are they located? Why have they been created?
5. What is meant by time-space compression? How has it affected the world? What is the World Wide Web and how has it already affected the world?
