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Information Technology (IT) Industries in the S4-5 Geography Curriculum

Explore what information technology is, its industries, and localization at different scales. Case study of Silicon Valley's evolution and localized knowledge creation. Discover reasons behind locational opportunities and barriers to diffusion.

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Information Technology (IT) Industries in the S4-5 Geography Curriculum

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  1. Information Technology (IT) Industries in the S4-5 Geography Curriculum Dr. Becky P.Y. Loo Associate Professor Department of Geography, HKU

  2. Information Technology (IT) Industries in the S4-5 Geography Curriculum • What? • Where? • Why? • How? • Conclusion

  3. What? What is information technology? • Desktop computer? • MP3? • Mobile phone? • Telephone line? • Electronic dairy? • E-mail account? • Radio? • Generate, processandexchangeinformation

  4. Old IT • Oral face-to-face contact • Simple pictorial presentation • Written language • Printing: e.g. paper, ink, printing press New IT • Late 19thC and early 20thC • Mechanical, electromechanical • Earlyelectronic technologies • e.g. typewriter, camera, telephone, telegraph • After the 1950s • Microelectronic technologies • e.g. computers, robots, fibre optics • Computer + Telecommunications Convergent IT generate & process exchange

  5. What are information technology industries? • Standard Industrial Classification (SIC) (1972) (Varga, 1999) Information technology 357 Office computing and accounting machines 361, 3825 Electrical transmission and distribution equipment 365 Radio and television receiving equipment, except communication types 366, 367 Electronic components and accessories, communication equipment • Information technology sector (Norton, 1999) • Large computers • Personal computers • Software • Semiconductors • Semiconductor equipment • Communications • Medical technology (biotechnology & instruments)

  6. Where? Global level National level Sub-national level N. America? Africa? Europe? Asia?    USA? Mexico? Germany? Yugoslavia?Japan? Burma?    Silicon Valley? Hollywood? Munich? Berlin? Tokyo? Sendai?    IT industries are highly localized at different spatial scales.

  7. Case study: The silicon valley • San Francisco Bay • 3,400 square km • Flanked by the Coastal Range • Valley: 1/3 of the total area • Spanish colonizers in the • late 1700s • Agrarian economy • Santa Clara county

  8. 1930s • Prof.Frederick Terman, Electrical Engineering, Stanford University • Setting up commercial enterpriseswith professional knowledge 1940s • No. 15 most productive agricultural counties in US • 1/3 of California’s annual crop of plums, cherries, pears & apricots • Stanford Research Institute 1950s • WWII and the outbreak of Korean War • Federal fundsfor electronics research and development • Military prime contracts to California $13 billion • 1950-1954: • 14% of US total • War-related aerospace and electronics enterprises • Stanford Industrial Park, Stanford Research Park

  9. 1960s • Throughout the entire Cold War period • Department of Defense’s electronics-based programs Distinguishing characteristics at early stages: • Large supply of scientific and engineering manpower • Federal defense and aerospace contracts as huge markets • Easy access to venture capital in San Francisco 1970s • “Right place to be” • Over 40,000 new jobs a year • 1 new jobs • 2-3 new jobs in other sectors • Multiplier effect 1980s • Population: 1.25 million • World’s most intensive complex of high-tech activity

  10. Electronics Employment Hi-tech in total employment of the Silicon Valley: 9.7% • 1959 • 1965 • 1970 • 1975 • 1980 • 1985 20.9% 39.5% 55.7% 69.8% 78.9% • Computers, other office machines, communications, semiconductors, other electronic components, missiles/parts, instruments, drugs, software/data processing, IC labs, electronic wholesale, computer wholesale

  11. Why? Open Windows of Locational Opportunities • Discontinuitynature Away from old centres • Innovative milieu … ability to create favourable production environment. Lack of favourable factors not important • Chance … importance of generic, as opposed to specific factors of production Widely range of suitable areas

  12. Innovative milieu Three reasons for localized knowledge creation and accumulation 1. Nature of the innovation process • Formal and informal networks for knowledge exchange • Incremental reduction of technical and economic uncertainty • Technical feasibility • Market acceptability • Trial and error approach

  13. Continual interaction betweenrelatedfirms • Joint development work • Sensitive information • Face-to-face contacts in the exchange and creation ofnew knowledge • Informal channels • Tacit knowledge • Direct observation of products and production process Material elements Immaterial elements Web of relationship Institutional elements

  14. 2. Barriers to spatial diffusion • Limited mobility of physical, human & social capital • Geographical inertia Speed Costs Led time

  15. 3. Tapping • Outside resources • People Firms Capital Ideas Technology Patents • By outsiders • “Right place to be” • By incumbents • Role of TNCs

  16. 1. Nature of the innovation process Case study: Silicon Valley 1930s-1940s • Not particularly strong • Stanford University • Other Universities: e.g.MIT in engineering • Other commercial clusters: e.g. laboratories of IBM, Bell … 1960s • Stanford University • PhD degree • Part-timehonours programmes • Industry-universityresearch sharing and seminars • Local laboratoriesrecruiting nationally • SRI, NASA’s Ames Research Center, IBM, ITT, … • Important tosmall firmsandyoungsemiconductor industry • Unusually high degree ofinteractions

  17. 2. Barriers to spatial diffusion • Physical capital • Supplies of specialized inputs and services • Photomasks, testing jigs, chemicals, silicon and special production equipment • Human & social capital • Highly desirablelifestyle(creation of social & cultural milieu) • Social status • Recreational opportunities • Suburb lifestyle • Horse owners • Switch jobswithout relocating

  18. 3. Tapping • Outsidepeople Young scientistsfrom all over the country • To landjobs • To start their ownfirms

  19. Outsidetechnology • Newfirms • Inflow ofcapital • Local industry liberally financed withventure capital • Success ofFairchild

  20. Financial supportfromSan Francisco • A large pool of wealthy individuals and families with discretionary incomes • Managementconsulting house

  21. How? Flexible production “ Post-Fordism” • Specialized production • Flexibly deployed (increasingly non-union) labour • Flexible machines • External economies of scale • Agglomeration economies • Spatial division of labour • Vertical disintegration within each product group

  22. Less-developed countries Developed countries Less-developed countries Developed countries • Transformation within the capitalist economy Labour-intensive industries Capital-intensive industries Low-technology components/process High-technology components/process

  23. Stages 1 – 3 Stages 4 – 6 1.Different stages donot need to be ingeographical proximity • High-level scientific, technical & engineering personnel • Pure production environment • Suitable utilities • Pure water supply • Waste disposal facilities • Low-skill labour, female • Clean environment

  24. 2. Low weight-high-value characteristics Which stage is the most mobile? • Stage 5 -- Assembly & packaging • Low-labour cost areas 3. Differential impacts of technological change on different stages Which stage is the most profoundly affected? • Stage 3 – Wafer fabrication • New lithographic techniques • Automation • Increasingly capital- & research- intensive How much money is required?

  25. 1960s Early 1970s Early 1980s Late 1980s 1996 • Roughly 2 millions • 15 – 20 millions • 50 – 75 millions • 150 millions • 1 billion to 2 billions • Rise of the “fabless” semiconductor firms • USA in 1980s • Design house, product design and development 1 In-house • Quality assurance, marketing, sales, customer support, testing 4 6 • Raw wafer manufacturing • And wafer fabrication subcontracted to outside firms Contract out 2 3 5 • Chip assembly

  26. Conclusion • One of the many approaches • Industrial geography is always changing • Some major trends and characteristics • Information sharing vs teaching kit guides

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