Unit 3.4(industry)what Are The Location Factor Of IT Industry”

Question 1

What is IT industry ?

Answer 1

• manufacturing of computers,related electronic products and communication equipment (hardware and equipment)
• development of computer software and networks and various services

Question 2

Describe the distribution pattern of the IT industry in USA

Answer 2

In USA, IT industry usually group together to form a industrial cluster in a dispersed pattern. They located in the suburbs of large cities

Question 3

What is the famous IT industrial cluster in the world ?

Answer 3

Silicon Valley in USA

Question 4

Give examples of inputs of manufacturing systems of the IT industry

Answer 4

• raw materials
• capital
• technology
• power supply
• skilled labour

Question 5

Which 2 inputs are the most important to IT industry ?why?

Answer 5

• Technology and capital
• the IT industry adopts the latest technology to produce high-value products
• to design products, IT firms have to invest a large amount of capital in research and development
• therefore, IT industry depends heavily on technology and capital.

Question 6

Name types of the IT industry

Answer 6

• capital-intensive industry
• technology-intensive industry /high-tech Industry
• research and development-intensive industry

Question 7

Which mode of production does the IT firms adopt ?

Answer 7

Multi-point production

Question 8

How is the location of production of IT industry closely related to its production requirements at stages 1&2?

Answer 8

In stage 1(development) and stage 2(growth):
-production requirement:
•research and development-intensive
•a large number of scientists and engineers are required to carry out R&D
• a large number of skilled labor are required of the manufacture the products
•efficient management and shared infrastructure
-location:
•in headquarters located in high-wage, more developed regions/countries

Question 9

How is the location of production of IT industry closely related to its production requirements at stages 3& stage 4 ?

Answer 9

-production requirements:
•labour-intensive
•abundant cheap and semi-skilled labor are required to carry our standardized production processes
-location
•in manufacturing plants located in low-wage, less developed regions/countries

Question 10

Describe the distribution pattern of the IT industry in R&D stages and the benefits of it

Answer 10

-Pattern:
•concentrated in industrial cluster, forming industrial agglomeration
-benefits:
•induce innovation
•facilitates exchange of market and technical information
•provide technical, financial and networking services
•create a distinct innovative culture and business climate
•further attracts other IT firms to agglomerate

Question 11

Describe the distribution pattern of the IT industry in standardized production stages and the benefits of it

Answer 11

-Pattern:
•concentrated in industrial cluster, forming industrial agglomeration
-benefits:
•share basic infrastructure such as transport facilities
~ help to cut cost and increase the competitiveness
~attract labors
~benefits from low rents offered by the local government

Question 12

What do we call the IT industrial landscape ?

Answer 12

Greenfield site

Question 13

Briefly describe the industrial landscape in the following aspects.
Building and location characteristics

Answer 13

-Buildings:
•Type: Modern office-plant-laboratory buildings
•Height: Low
•Density: Low .

-Location characteristics:
•Availability of venture capital
•Near major universities and research institutes
•Abundant supply of scientists and researchers
•In the Suburbs of large cities
•Large green areas
•Nice working environment with less serious pollution

Question 14

What are the local factors affecting the location of the IT industry at development stage?

Answer 14

-Socio-economic factors:
•government policies:
~provide financial support for R&D
~maintain a favorable climate and an innovative culture within the community
•capital:
~availability of venture capital
•technology and innovation:
~access to high levels of technology and research institutions
•agglomeration:
~ share basic infrastructure and social facilities enable economies of scale
-operation factors:
•labour:
~good access to researchers, scientists and technicians
•market & clients :
~access to global market, suppliers and costumer
-site factors:
•land attributes:
~in suburbs areas of large cities with good amenities
•communication:
~ good transport networks and well-established telecommunications infrastructure

Question 15

What are the local factors affecting the location of the IT industry at maturity stage?

Answer 15

-Socio-economic factors:
•government policies:
~provide infrastructure and amenities
•capital:
~availability of capital in form of foreign direct investment (FDI)
•technology and innovation:
~readily to receive transferred technology from high-technology regions
•agglomeration:
~ share basic infrastructure and social facilities enable economies of scale
-operation factors:
•labour:
~abundant supply of cheap and semi-skilled labour
•market & clients :
~access to global market, suppliers and costumer
-site factors:
•land attributes:
~cheap land site in industrial cluster with good infrastructure
•communication:
~ good transport networks and well-established telecommunications infrastructure

Question 16

What do we call the process of contracting out of other countries ?

Answer 16

Outsourcing / offshoring

Question 17

In which type of regions/countries, the less developed or the more developed ones, have the US IT firms contracted out?

Answer 17

The less developed regions/countries.

Question 18

Factors that cause the US IT firms moving the US IT firms into India
About government policies and labour

Answer 18

-government policies:
•Indian government offers tax incentives for the foreign direct investment (FDI) in the country

-access the labour
•India has a large pool of well-developed labour specializing in the field of engineering and technology.
•the salary of a software developer in India is lower than that of the USA.the labour cost is more competitive than those of USA
•the Indian worker are proficient in English

Question 19

Factors that cause the US IT firms moving the US IT firms into India
About land attributes and communication systems

Answer 19

-land attributes:
•there is time difference between India and USA, that means that the staff in USA can stop working in the evening, staff in India start working. This can make full use of 24 hours operation

-communication systems
•the telecommunication in India is well-developed.
•this facilitates long-distance communication between the headquarters in USA and branches offices in India

Question 20

What is the factors that cause the IT firms have been moving back their production operations from China to their home country ?

About the push factors of China

Answer 20

-increasing labour cost of China
•the wages are increasing rapidly . This narrows the differences in wages between China and the USA
-increasing the transport costs
•the price of crude oil keeps rising. The savings gained in labour costs are being offset by higher transport cost
-higher price of land and natural gas in China
•the price of land and natural gases are higher than certain states in the USA

Question 21

How does the IT industry carry out globalization in production?

Answer 21

• Headquarters is kept in the home country

* Standardized production is outsourced •Production plants are moved to areas with low production costs

Question 22

What are the advantages of having globalization in sourcing inputs?

Answer 22

If an IT firm adopts the strategy of global sourcing inputs, it can obtain better/higher quality components at lower costs elsewhere. This can help increase profits.

Question 23

how industrial development brings benefits to a region?

Answer 23

When industries are set up in a region, jobs are created and people’s income will increase With a higher income, more money can be spent in local shops and services. The local economy starts to grow and this will increase the tax revenue of the local government. Then, the local government will have more money to improve the infrastructure. This ill attract more people to come and more new industries will be set up in the region