What are the locational factors of the IT industry?

1. What are the locational factors of the IT industry?

2. What is the information technology (IT) industry? It is a type of _______-____________ industry. high technology Information technology (IT) industry Manufacturing of hardware and equipment Development of software and related services (Any examples?) (Any examples?)

3. Inputs Processes Raw materials Powersupply Skilled and unskilled labour IT equipment products Technology and R&D Outputs Capital Global markets What are the characteristics of the IT industry? 1 Research and development-intensive Design Manufacturing Assembly Packaging Which two inputs do you think are the most important ones for the IT industry? Cash

4. What are the characteristics of the IT industry? 1 Research and development-intensive Therefore, the IT industry is widely known as a… __________-intensiveindustry ____________-intensiveindustry capital technology _________________________-intensive industry research and development

5. What are the characteristics of the IT industry? 2 Short life cycle of IT products Stage of production Development Growth Maturity Decline Market grows rapidly Market levels off Market drops rapidly How often do you change your IT products such as mobile phones, PCs, etc.? Much work on R&D Only in a few years

6. Stage of production Growth Decline Development Maturity What are the characteristics of the IT industry? 3 Multinational and multi-point production (Using an IT firm in the USA as an example) Production requirement Scientists and engineers for ______ Skilled workers ___________ workers for standardized mass production Unskilled R&D Location of production - Headquarters: in US big city Mass production bases: location with ________ labour overseas (in ______ developed countries) - R&D centres: location with _____________ and _______ labour in home country ( ______ developed countries) professionals skilled cheap less more Multinational ____________ and ___________ production multi-point

7. What are the characteristics of the IT industry? 4 Concentration in clusters In development / R&D stage What are the advantages for IT firms to form clusters? For example, technology information can flow among firms; and… attract more professionals to go to the area. Silicon Valley in California is one of the most famous IT industrial clusters in the USA

8. What are the characteristics of the IT industry? What are the advantages for IT manufacturing plants to form clusters? 4 Concentration in clusters In maturity / production stage For example, reduce the investment on infrastructure; and… efficient use of raw materials and fuels. This cluster pattern is called____________ _____________. industrial agglomeration

9. What are the characteristics of the IT industry? 5 Importance of global markets A lot of money for R&D A lot of money for R&D A lot of money for R&D A lot of money for R&D A lot of money for R&D A lot of money for R&D In order to cover the huge amounts of money spent on R&D…

10. What are the characteristics of the IT industry? 5 Importance of global markets ________ markets are needed to maximize the profits. Global Markets of the mobile phone

11. University What are the characteristics of the IT industry? universities Near to ___________ or research institutes City centre 6 An IT industrial landscape This new kind of industrial landscape is called a ________ ________ ________. Located in __________ area suburban A large pool of scientific and technically skilled labour Venture capital is available green field site Low, modern, dispersed office-plant-laboratory buildings

12. What are the locational factors of the IT industry? Capital In development stage Large amount of __________ capital venture Technology Governmentpolicy ______ level High ‧Provide financial support for _____ Site R&D ‧In ( MDCs / LDCs ) ‧Encourage innovative culture ‧( City centre / suburb ) Market ‧Near universities or research institutes __________ markets Global Labour Researchers, scientists and technicians Others Any examples?

13. What are the locational factors of the IT industry? Capital In development stage In maturity stage Large amount of __________ capital Large amount of capital to set up factories overseas venture Technology Governmentpolicy No need to be of high level ______ level High ‧Provide a good infrastructure ‧Provide financial support for _____ Site R&D ‧In ( MDCs / LDCs ) ‧In ( MDCs / LDCs ) ‧Provide good communal services ‧Encourage innovative culture ‧( City centre / suburb ) ‧_______ land site Cheap Market ‧Good infrastructure ‧Near universities or research institutes __________ markets Global Labour Researchers, scientists and technicians Abundant _______ semi-skilled labour Others cheap Any examples?

14. What is the world distribution of the IT industry? Europe USA The IT industry here mainly concentrates on _____. Where is most IT industrial centres found? They are ( MDCs / LDCs ). Why is the IT industry set up there? There are more _____________ and professionals ________ capital. venture R&D

15. What is the world distribution of the IT industry? China Malaysia Mexico India Brazil The IT industry here mainly concentrates on the manufacturing of the ___________. Are there any IT industrial centres in LDCs? Why is the IT industry set up there? There are cheap ______ price and ________ costs. land labour hardware

16. Where is the IT industry in the USA? Silicon Valley Can you name a famous IT industrial cluster in the USA? Where are these IT clusters mainly found in? They are mainly found in the suburbs of _______ cities. Why? large

17. Where is the IT industry in the USA? Why is the IT industry there? Favourable locational conditions The suburbs of the large cities in the USA have… a ______standard of living _____- developedinfrastructure a __________living and working environment high well pleasant attracts attracts attracts __________capital from the big cities skilled labourand professionals venture

18. Where is the IT industry in the USA? Why is the IT industry there? Helpful government policies The policies carried out by the state governments also help attract the IT firms to come to their states. These policies include: Good infrastructure and communalservices Favourableeconomic plans Favourablebusinessclimate Innovativeculture

19. Case study: How did the hard disk drive (HDD) manufacturing industry develop in the USA? Stage 1: 1956-80 It was the beginning of the industry, it needed: HDDs were bulky, assembly plants needed to be located near __________ to save transport costs. ＿＿＿＿＿＿＿＿＿＿＿＿＿＿ for R&D; professionals / scientists markets Why? In ＿＿＿＿＿＿ and ＿＿＿＿＿＿. In ＿＿＿＿＿＿＿. Where was technological development carried out? Where were the assembly plants? the USA the USA Europe  places with ＿＿＿＿＿＿＿ technology; and advanced Distribution pattern of the HDD industry of the USA (1956-80)

20. Case study: How did the hard disk drive (HDD) manufacturing industry develop in the USA? Stage 1: 1956-80 Stage 2: 1980 to present Where is technological development carried out? In ＿＿＿＿＿＿＿. Why? ＿＿＿＿＿＿＿＿＿＿＿＿＿＿＿ are needed for R&D. Where are the assembly plants? In ＿＿＿＿＿＿. Why? Professionals / Scientists the USA Asia Distribution pattern of the HDD industry of the USA (1956-80) Distribution pattern of the HDD industry of the USA (1980 onwards)

21. Pressure from consumers Keen competi-tion Stage 2: 1980 to present Advancements in technology Market situation Attractions of LDCs ________ labour Cheap Smaller size of HDDs + + ________ land Cheap + Better transport results in lower ___________ costs Favourable government policies transport $8,000 $20,000 $15,000 Lower the locational importance of __________ market ___________ the locational pull of LDCs Increase Better communications production plants can be set up away from the HQs

22. What is the relationship between globalization and the IT industry? What is globalization? It has many meanings. But we can look at it in two major aspects. The development of the IT industry is very much in line with the development of globalization. There is a growing number of multinational firms. Countries all over the world have become more inter-related.

23. Foreign market Home country Home country Home country Foreign market Foreign market What is the relationship between globalization and the IT industry? Globalization in marketing IT products target at _________ markets. global Sell here 1 Export Export products directly Producehere 2 License Grant a license overseas Produce and sell here 3 Foreign direct investment (FDI) Set up a plant overseas Produce and sell here

24. Overseas Home country What is the relationship between globalization and the IT industry? Globalization in production HQs and R&D in… Production bases in… (usually in ________ developed countries) less _____________ production Multinational

25. The end

26. Examples of IT hardware and equipment Mobilephone Laptop PSP iPod

27. Examples of IT software and related services SMS Online games Onlineticketing e-shopping