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Economic Geography

Economic Geography. Spatial organization and distribution of economic activity Outcome of decisions Highly uneven at all scales Technology shifts advantages. Uneven globally. U.N. Human Development Index ( life expectancy, education, income).

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Economic Geography

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  1. Economic Geography Spatial organization and distribution of economic activity • Outcome of decisions • Highly uneven at all scales • Technology shifts advantages

  2. Uneven globally U.N. Human Development Index ( life expectancy, education, income)

  3. Uneven globally Per capita GNP (Gross National Product) ( Total value spread evenly in population)

  4. Uneven nationally U.S. poverty (red dots)

  5. Uneven regionally

  6. Uneven locally(Poverty in Milwaukee, Chicago)

  7. Economic agents STATES/ GLOBAL INSTITUTIONS PRIVATE SECTOR TECHNOLOGY LABOR

  8. Global financial institutions WORLD BANK -makes loans INTERNATIONAL MONETARY FUND (IMF) -increases money flow WORLD TRADE ORGANIZATION (WTO) -sets rules of trade

  9. Structural adjustments 1. Privatize state industries 2. Limited government social spending 3. Increase imports from Core (product dumping) 4. Devalue currency to increase exports

  10. Debt as % of GNP

  11. Results of“austerity measures” 1. Government workers laid off 2. Price rises for privatized goods (fuel, water, medicine) 3. Domestic goods overwhelmed by imports (subsidies eliminated for domestic producers) 4. Less ability to purchase goods

  12. South Korea “Debt riots” Bolivia Argentina Jamaica

  13. Free Trade Agreements Industrialization in Europe • North American Free Trade Agreement (NAFTA) • US + Canada + Mexico, 1994 • Free Trade Area of the Americas (FTAA) • Expanded NAFTA

  14. Zapatista revolt in Mexico Industrialization in Europe • Began in Chiapas, January 1994

  15. Economic activities Industrialization in Europe • Primary • Secondary • Tertiary • Quaternary

  16. 1. Primary activities Extracting raw materials

  17. Primary activities

  18. 2. Secondary activities Processing and manufacturing materials

  19. Secondary activities

  20. 3. Tertiary activities Sales, exchange, trading goods and services U.S. stock exchange Call Center in India

  21. Off-shore financial centers

  22. 4. Quaternary activities Processing knowledge and information

  23. Silicon Valley Silicon Valley, California Bay Area Silicon Valley, California

  24. Place in Economic Geography • Where firms come from is important. • As firms expand … • they stitch together places • they create global interdependency

  25. Principles of location • Raw materials • Labor supply and cost • Processing costs • Markets • Transport costs • Government policies • Human behavior

  26. PRIMARY: Natural resources Industrialization in Europe

  27. U.S. U.K. Geography of the Steel Industry

  28. East Asia: Contemporary Industrial Hot Spot

  29. Eastern Europe and Russia

  30. Resource dependency(“Banana Republic,” “Oil state,” etc.) Industrialization in Europe

  31. Silicon Valley in the Southern San Francisco Bay Area Resource cartel(One strategy to leave the Periphery)

  32. SECONDARY: Industry Manufacturing Regions of of Western Europe

  33. Global economic processes • Spread and deepening of investment, trade and production flows • Agglomeration of trade and production sites • (e.g., free trade zones, global cities)

  34. Agglomeration (clustering of an industry) • Availability of ancillary (service) industries • Infrastructure (fixed social capital) • “Forward linkages” to markets

  35. Agglomeration diseconomies • Traffic, pollution, full waste dumps • High rent and taxes • Labor shortages and turmoil

  36. AUTO INDUSTRY 1. General Motors 2. Ford 3. DaimlerChrysler 4. Toyota 5. Volkswagen 6. Honda 7. Nissan 8. Fiat 9. Peugeot 10. Renault

  37. “American” cars? Japanese Nissan plant In Tennessee Geo Metro made in Japan, marketed by GM Jaguar made in UK by Ford

  38. U.S. and Japanese Owned Motor Vehicle Parts Plants

  39. New International Division of Labor • Specialization in particular kinds of economic activities … • of different people • of different regions • Geographic division of labor • “Spatial justice”

  40. Foreign direct investment by businesses

  41. Deindustrialization in the Core • Relative decline in industrial employment • Automation and “runaway shops” • Reinvestment in higher profit areas • Sunbelt states (non-union) • Semi-periphery and Periphery

  42. Foreign Competition While U.S. companies continued to make these through the 1970s….. Economic StructureUS economy by industry (x1000) The Japanese were Selling us these!

  43. Major Manufacturing Region and its Sub-Parts Collapse of Rust Belt Replaced in Boston, Pittsburgh by high-tech industries

  44. Different types of industry have different site and situation needs The Sunbelt

  45. New High Technology Landscape in France

  46. New High Technology Landscape in France

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