Economic development Flashcards
Case study: Location of a secondary industry case study: Foxconn Factory Complex Shenzhen, China
Foxconn City is on the outskirts of Shenzhen on flat land. This is because it is a large factory complex and so there needed to be enough space for the factory buildings.
Government incentives: To encourage new markets “special economic zones” (SEZ) these areas were designed to attract foreign business. Within these zones firms are; taxed lower, allowed to import duty-free raw materials, and pay no export taxes.
Transport Links: Foxconn City is well connected via roads and railway links which is important for moving components into the factory and finished goods out and it is the third busiest container port in the world.
Supply Network: To ensure the smooth production of products it helps being close to suppliers. Many of the components needed to make an iPhone can be sourced from within a 50-mile radius of Foxconn City.
Low-cost labour is available in Shenzhen as there is a large supply of young migrants moving from poor rural areas, looking for work in the city.
This has allowed more than 450,000 people to be employed at Foxconn city in Shenzhen.
Case Study of a TNC: Apple Inc
Research and development:
* Takes place in the Silicon Valley, California.
* This is Apple’s global headquarters.
Raw materials e.g. coltan:
* Sourced from mines in countries such as Democratic Republic of the Congo (DRC).
* Coltan is a highly conductive metallic ore.
Impacts of coltan mining:
* Mining is unregulated leading environmental damage e.g. land eroded by mining pollutes lakes and rivers.
* Many of the mines are also located in gorilla habitats which is threatening this already critically endangered species.
* Many of the mines are owned by rebel groups who use profits to purchase weapons.
* Because of some of these issues Apple has altered its sourcing relationships and now only uses ‘conflict- free tantalum’.
Component parts:
* One of Apple’s largest component suppliers is Samsung (one of its largest competitors) who supply silicon chips.
* Other suppliers include Sony (cameras) and Sharp and LG (touchscreen displays).
* Apple has around 200 vendor suppliers around the world.
Apple assembly and distrubution China
Assembly:
* China where skilled workers can be employed for wages that are relatively cheap by world standards.
* A large proportion of Apple iPhones are assembled at Foxconn, a Taiwanese TNC electronics company.
* Foxconn has 12 factories in mainland China, with the largest being in Shenzhen.
* The Shenzhen factory is often referred to as Foxconn city.
* Foxconn city employs more than 350,000 people.
* It is estimated that about 40% of all electronic products are assembled in Foxconn factories.
Distribution:
* When phones have been assembled and packaged, they are air-freighted to distribution centers in several parts of the world, including Australia, China, Singapore, The UK and the USA.
Positive Impacts of Apple’s Operations at the local and national level
Local
* Foxconn have no shortage of applicants for
jobs in their factories; with wages being
higher than most other Chinese factory
jobs.
* More people and money in the area leads
people to setting up their own businesses,
for example, many have opened restaurants to serve the workers. This is known as a positive multiplier effect.
* Foxconn provides housing for workers. In
the area that surrounds Foxconn city,
services have sprung up to serve the
workers e.g. movie theatres, restaurants,
sports and leisure facilities, night clubs etc.
* Many young people have migrated to
Shenzhen from rural areas. Their quality of
life in Shenzhen is better than in the
countryside and they are able to send
money home to help lift their families out
of poverty.
National
* With 1.3 million employees in mainland
China, Foxconn is by far the country’s largest
employer
* It is not just factory jobs that bring benefits from Apple to China. Over 380 suppliers to cover almost every section of Apple’s smartphone
manufacturing industry: from expensive
components, such as display panels, to cheaper
elements such as printed circuit boards.
Negative Impacts of Apple’s Operations at the local and national level
Local
* High suicide
Work past legal overtime limits and harsh
Penalties for those who make mistakes.
* Rooms sharing with 10-12
people.
* Young children working
National
* Moved to Vietnam to be less reliant
Tourism in an LEDC – case study Kenya
Serengeti (a National Park in Kenya).
Positive impacts of tourism
* Conservation - national parks and conservation areas which protect wildlife.
- Employment
- Infrastructure - roads, airports and other facilities have been built.
- Investment profits from tourism have been invested in education and other programmes for local communities.
Negative impacts of tourism
* Environmental damage - roads and tracks for safari jeeps can erode grass cover, damaging plants and animals and disturbing local habitats. The removal of trees and other vegetation for the construction of roads can lead to soil erosion.
- Inequality - often the profits of tourism are reaped by wealthy landowners or the hotel and travel companies in MEDCs.
- Loss of traditional cultures - the Maasai’s way of life and traditional farming methods have been disrupted by the setting up of National Parks.
- Water cycle damage - diverting water for tourists can exploit local water reserves, leaving local people, plants and animals short of water. Tourist hotels sometimes dump waste into rivers.
Basecamp Explorer: An example of sustainable eco-tourism in the Maasai Mara, Kenya
Of the 43 staff, 95% are local, including 10 women – promotes gender equality.
Extensive use of local material, including deadwood, and labour for construction. Buildings can be dismantled and taken away safely – no permanent damage.
Extensive use of solar energy. The cooker, water heaters and communication systems are powered by solar energy.
Have planted an estimated 25,000 trees since 2000, as part of restoring vegetation along the river near Basecamp. Done jointly with the local community.
