Unit 7: Industrialization And Economic Development Patterns And Processes Chapter 18: Topic 7.2 Flashcards
Extracting natural resources from the earth. EX: farming, mining, fishing and forestry. Economic characteristics: dominated economy until late 1800s, high-risk jobs, small part of today’s economy, few high-paying jobs, require physical skill
Primary Economic Sector
Making products from natural resources. EX: manufacturing, building. Economic characteristics: Significant growth from 1840s to the 1960s, wages vary greatly.
Secondary Economic Sector
Providing information and services to people. EX: retail sales, medicine, housekeeping. Economic characteristics: small part of the economy until the mid 1900s, most people in US labor force today, wages vary widely.
Tertiary Economic Sector
Managing and processing information. EX: financial analysis, software development, data science. Economic characteristics: small percentage of employees, most jobs require advanced education or technical skills, high wages, considered part of the tertiary sector until recently.
Quaternary Economic Sector
Creating information and making high-level decisions, EX: research, top managers in corporations or government. Economic characteristics: Very small percentage of employees, very high income, decisions can affect millions of people, considered part of the tertiary sector until recently.
Quinary Economic Sector
Divisions of labor varies by level of economic development. 1800s, nearly everyone worked in primary however, industrialization made the agricultural sector more mechanized and efficient, demand in secondary increased (primary decreased = less than 5% today). Secondary reached its peak in 1950s, then it declined. Economy has been postindustrial, most job growth has been in the tertiary sector.
Structural Changes in Economies (chart)
US = Very small percentage of primary sector, larger secondary percentage, tertiary takes up most of economy. China = Pretty much equal between all sectors, tertiary is slightly dominant. Ethiopia = Mostly primary, some tertiary, very small secondary.
Labor Force by Sectors (Chart)
The potential for a job to produce additional jobs. EX: Auto manufacturer expands a plant and adds 100 new jobs in a community, workers will have more money to spend on various goods and services. This leads to the expansion of other businesses and jobs.
Multiplier Effect
1909, secondary sector grew rapidly in Europe and US. This explains the key decisions made by businesses about where to locate factories. Factory owners would locate their businesses where they could minimize their total costs by balancing 3 factors: minimizing transportation costs, minimizing labor costs and maximizing agglomeration economies.
Weber’s Least Cost Model
Spatial grouping of several businesses to share costs, such as access road to a public highway or development of a workforce with special skills.
Agglomeration
The three points of a triangle are the market for a good and two resources needed to make that good.
Locational Triangle
Known as weight-losing, raw material oriented, or raw material dependent. EX: copper production, mining, lumber and agricultural industries. Transporting extracted material is more expensive than transporting the finished product. A company can save money by moving production close to sources of that raw material.
Bulk-Reducing Industry
Products become bulkier as processing occurs. Factories usually locate close to the market
Bulk-Gaining Industry
Uniformity of area, he considered the area as an isotropic plain. However, isotropic plains rarely exist and things like mountains and highly concentrated areas can alter transportation costs. Labor, he assumed there was enough labor and that it was immobile. However, automation reduces the need for labor. Labor is relatively mobile. Raw materials, assumed raw materials are found only in certain fixed locations. However, raw materials are found in many locations. Number of products and markets, assumed there was only 1 good produced and it is for a single market in a fixed location. However, goods are sold in more than one location and numerous markets exist. Transportation costs, assumed they are directly related to the distance of travel and the weight of items. However, cost per mile may decrease as time increases. space-time compression can reduce overall cost of transportation. Influences on location, assumes economic factors dominate the decision about where to locate a factory. However, emotional factors can influence where a factory is opened. Significance of costs, assumes owners want to minimize costs. However, owners maximize revenue and establish predictable future costs to generate profit.
Comparing Weber’s Theory to Reality
Highly dependent on a workforce and will want to be near a source of those workers. These companies will try to locate near a community with an available potential workforce. Those that require workers with experience or a college degree will tend to surround colleges.
Labor-oriented Industry
