Industries and Services

1. Industries and Services Chapters 11 & 12

2. Industrial Revolution: dramatic innovations in manufacturing, mining, transportation and communication that results in rapid changes in society and commerce 1730s to 1860s First Phase of the Industrial Revolution. Textiles, Iron Production, Steam Power 1860s to 1914 Second Phase of the Industrial Revolution Steel, Chemicals, Railroads, Gasoline Engine, and mass production. Post WWII Third Phase of the Industrial Revolution high technology-computerization, miniaturization and automation

3. Why England? • Geographic Advantages: • Island-not invaded • Resources-coal, iron ore, water power, rivers • Political Advantages: • Stable government-encouraged business • Cultural Advantages: • Entrepreneurs willing to take a risk & inventors. A monopoly of skilled workers

4. Economic Advantages: • Banking system and available capital • The Agricultural Revolution and Enclosure Movement -supply of cheap and abundant labor. • A large merchant fleet was protected by an efficient navy. • Mercantilism-colonies provided sources of raw materials and markets.

5. James Watt’s improved steam engine made steam power a versatile form of energy for mining, iron production, transportation and even, the milling of flour and brewing of beer.

6. Abraham Darby ‘s coking process, which baked the impurities from coal, gradually replaced scarce charcoal as the fuel for iron production. • Pictured at right are some of the original coking ovens in Northumberland, England.

7. Early 1800s innovations diffused to mainland Europe-Low Countries & Germany Location criteria-proximity to coal fields Connection to a water port Latter Diffusion in late 1800s innovations Location criteria-access to railroads strengthened Paris and London as manufacturing centers Diffusion to Mainland Europe

8. Diffusion to Mainland Europe • A belt of coal fields stretch along southern edge of North European Plain-northern France, Netherlands, German Ruhr, western Bohemia & Silesia • Rotterdam, Netherlands-located on the Rhine-connects Ruhr Valley to the sea-most important port of Europe • Paris-luxury items-jewelry, perfume, fashions plus metallurgy and chemicals-LeHavre major port connects Paris with the sea

9. Location Theory – predicting where a business will or should be located. Location of an industry is dependent on economic, political, cultural features as well as whim. Location Theory Considers: Variable costs-energy, transportation costs & labor costs Friction of distance-increasing distance =increased time & cost Location Theory

10. Location Models Weber’s Model-The Least Cost Theory Alfred Weber, (1868-1958) a German economists, published Theory of the Location of Industries in 1909. His theory was the industrial equivalent of the Von Thünen Model. Manufacturing plants will locate where costs are the least. Three Categories of Costs: Transportation-the most important cost-usually the best site is where cost to transport raw material and finished product is the lowest Labor-high labor costs reduce profit-location where there is a supply of cheap, non-union labor may offset transportation costs Agglomeration-when a group of industries cluster for mutual benefit-shared services, facilities, etc.-costs can be lower Deglomeration-when excessive agglomeration offsets advantage-eastern crowded cities

11. Hotelling’s Model-Harold Hotelling (1895-1973) this economist modified Weber’s theory by saying the location of an industry cannot be understood with out reference to other similar industries-called Locational Interdependence Lösch’s Model-August Losch said that manufacturing plants choose locations where they can maximize profit. Theory: Zone of Profitability Location Models

12. Lösch’s Model-Zone of Profitability

13. Major Industrial Regions of the World before 1950 • First manufacturing belts were close to raw materials & good transportation • In addition to raw materials other factors: relative location, political situation, economic leadership, labor costs & education and training. • Four primary industrial regions were Western & Central Europe, Eastern North America, Russia & Ukraine and Eastern Asia

14. Western and Central Europe • Europe’s coal deposits stretch across northern France, north central Germany, northwestern Czech Rep. & southern Poland. • Colonial Empires gave France, Britain, Belgium, Netherlands & later Germany capital for industrial development. • Germany-The Ruhr & the Westphalian coal field, Saxony near Czech Rep. Silesia, now part of Poland. • Germany is still the leading producer of coal & steel and is Europe’s major industrial power. • European Coal and Steel Community was the predecessor of the European Union.

15. Manufacturing Centers in Western Europe • The manufacturing centers in Western Europe extend in a north-south band from Britain to Italy. • The are centered on coal fields and iron ore deposits and cross roads of transportation.

16. Western and Central Europe • The Ruhr, a small tributary to the Rhine, became the leading industrial region of Europe • Saxony and its cities of Leipzig & Dresden became known for cameras, textiles and ceramics. • Destruction of WW II-German factories were rebuilt-competitive edge over older factories of North America

17. The American Manufacturing Belt • America’s manufacturing belt extends from the Northeast coast to Iowa and from the St. Lawrence Valley to the Ohio & Mississippi Rivers. • New England & New York-light manufacturing New York with its large market has a huge skilled & semi-skilled labor force. • Philadelphia & Baltimore with heavy industry-iron ore was smelted in tidewater steel mills

18. The American Manufacturing Belt • NYC Port is a break-of-bulk (cargo shifted from one mode of transport to another) center. • Buffalo on Lake Erie grew after the Erie Canal was finished-early 19th cent. • Interior nodes-Pittsburgh, Cleveland, Detroit, Chicago-Gary, Milwaukee, St. Louis & Cincinnati-Appalachian coal & Mesabi iron ore-autos, bulldozers, harvesters, & appliances Caterpillar manufacturing plant in Aurora, Illinois

19. The Former Soviet Union • Moscow developed light industry in the last days of the Tsars and St. Petersburg focused on machinery, optics, medical equipment, shipbuilding, chemicals & textiles • Soviets emphasized heavy industry-established Nizhni Novgorod (southeast of Moscow) as the “Detroit of the Soviet Union” • WW II Soviets shifted industries east to protect them from the German advance-Volga area & Urals • Ural Mountains provided metallic ores:copper, iron, nickel, chromite, bauxite, etc. • Siberia coal and iron remained important • Kuzbas, Krasnoyarsk and Lake Baykal region served by Trans-Siberian Railroad-impressive coal, timber & water resources

20. Major Manufacturing Regions of East Asia Shanghai Steel Mill

21. Eastern Asia-China • Japan built steel mills in Dongbei (Manchuria) during its occupation in WW II • From 1949 until 1969 Soviet planners helped the China industrialize • Tonghua Iron & Steel is subsidized and operated by the Communist Party. • Built in 1958, it employs 29,000 workers-China produces 30% of the world’s steel