Industrial Change

1. Industrial Change • Innovations in production = manufacturing boom • Henry Ford = mass-production assembly line • Allowed for the production of consumer goods at a single site on a previously unknown scale. • Fordist system seen as including a set of social structures (corporations and countries supporting each other) and financial orders that supported mass production by corporations.

2. Built Ford Tough • World economy = post-Fordist system – a more flexible set of production practices in which goods are not mass produced. • Production has been accelerated and dispersed around the globe by multinational companies that shift production. • Time-space Compression – some places in the world are more connected through communication and transportation technologies than ever before.

3. Time-Space Compression • Altered the division of labor. • Less interconnected = goods produced close to the point of consumption. • In the US, major industrial belt was in NE because of the readily available coal and other raw materials and also because that’s where everyone lived. • With just-in-time delivery (rather than keeping a large inventory of components or products, companies keep just what they need for short-term production and new parts are shipped quickly when needed), corporations can draw from labor around the globe for different components of production.

4. Global Economic Players • General Motors, Philips, Exxon – take advantage of low transportation costs, favorable governmental regulations, and expanding information technology around the world to construct vast economic networks in which different facets of production are carried out in different places in order to benefit from the advantages of specific locations. • Publicly traded companies are pressured by shareholders to grow their profits annually.

5. Profit or Loss • Profit = cut costs and labor. • Most multinational companies have moved the labor-intensive manufacturing to peripheral countries. • Jobs that remain in the core = highly mechanized, high cost of production for finished products, and rely on regional consumption.

6. Profit or Loss • Research and development activities tend to be concentrated in the core, where high levels of education and access to technology are the norm. • Mechanized agriculture and move of manufacturing jobs to semi-periphery/periphery = labor force in tertiary sector in core countries.

7. Made in China • Trade = tertiary economic activity • Regardless of where goods are produced, most of the consumption still takes place in the core. • Newly industrialized countries of the semi-periphery send manufactured goods to the core (hence the “Made in China” labels found on goods throughout the US). • Trade flows among countries in the periphery are typically low because for peripheral countries the dominant flow of goods is exports to the core.