Globalization: Globalization: InterdependenceInterdependence

Primary, Secondary, and Tertiary Primary, Secondary, and Tertiary IndustriesIndustries

InterdependenceInterdependence

What did you have for What did you have for breakfast this breakfast this

morning?morning?

InterdependenceInterdependence

To enjoy breakfast, you must rely on trade with To enjoy breakfast, you must rely on trade with foreign businessesforeign businesses

Without trade, you’d probably just be eating Without trade, you’d probably just be eating toasttoast

Other nations are equally dependant on trade Other nations are equally dependant on trade for things they needfor things they need

For example, the U.S. relies on Canada’s For example, the U.S. relies on Canada’s energy (gas, oil, hydroelectric power), many energy (gas, oil, hydroelectric power), many nations rely on our wheat for their flour, our nations rely on our wheat for their flour, our trees for paper, and our fish for dinnertrees for paper, and our fish for dinner

InterdependenceInterdependence

All nations in today’s world must depend upon All nations in today’s world must depend upon each other for products or services that their each other for products or services that their industries either cannot make or cannot grow, industries either cannot make or cannot grow, or that other nations grow better.or that other nations grow better.

The reliance of two or more nations on each The reliance of two or more nations on each other for products or services is called other for products or services is called interdependenceinterdependence

There are 3 main areas of interdependence in There are 3 main areas of interdependence in trade: primary, secondary and tertiary trade: primary, secondary and tertiary industriesindustries

Primary IndustriesPrimary Industries

Canada’s export strength is still in the primary Canada’s export strength is still in the primary industry sector; the sector consists of industry sector; the sector consists of extraction and initial processing of all raw extraction and initial processing of all raw materialsmaterials

There are There are 5 major primary industries5 major primary industries: : agriculture, fishing, hunting and trapping, agriculture, fishing, hunting and trapping, forestry and logging, and energy and miningforestry and logging, and energy and mining

A 6A 6thth primary industry is often added to the list; primary industry is often added to the list; waterwater

Primary IndustriesPrimary Industries

Primary Industries are situated mainly in Primary Industries are situated mainly in eastern and western Canadaeastern and western Canada

West producesWest produces: oil, gas, metals, : oil, gas, metals, chemicals, and agricultural products chemicals, and agricultural products (beef and wheat)(beef and wheat)

Atlantic provinces Atlantic provinces capitalize upon their capitalize upon their offshore oil reserves, fisheries, and offshore oil reserves, fisheries, and minesmines

Primary IndustriesPrimary Industries

Primary industries add value to products by Primary industries add value to products by extracting them from the earth or sea and extracting them from the earth or sea and processing themprocessing them

Our greatest number of exports, both to U.S. Our greatest number of exports, both to U.S. and other trading partners, come from and other trading partners, come from businesses in the primary sectorsbusinesses in the primary sectors

For example, we sell more oil to the U.S. than For example, we sell more oil to the U.S. than the Middle East (about two million barrels per the Middle East (about two million barrels per day)day)

Issue: Canada’s Dirty OilIssue: Canada’s Dirty Oil

Quick FactsQuick Facts http://dirtyoilsands.org/visualshttp://dirtyoilsands.org/visuals http://dirtyoilsands.org/visuals/dvd/10minhttp://dirtyoilsands.org/visuals/dvd/10min

Secondary IndustriesSecondary Industries

Secondary Industries are made up of primary Secondary Industries are made up of primary manufacturing (processing) and secondary manufacturing (processing) and secondary manufacturing.manufacturing.

Secondary manufacturing produces both Secondary manufacturing produces both capital goods (products used by businesses capital goods (products used by businesses i.e., trucks, machinery) and consumer goods i.e., trucks, machinery) and consumer goods (clothing, packaged food, tv’s)(clothing, packaged food, tv’s)

Canada has a weak manufacturing sectorCanada has a weak manufacturing sector

Secondary IndustriesSecondary Industries

Canada relies on foreign investors to invest in Canada relies on foreign investors to invest in businesses in Canada, provide jobs for businesses in Canada, provide jobs for Canadians, and make the products we useCanadians, and make the products we use

Over 50% of all the processing and Over 50% of all the processing and manufacturing businesses in Canada are manufacturing businesses in Canada are owned by foreign companies i.e., Kelloggs, owned by foreign companies i.e., Kelloggs, Proctor and Gamble, Kraft FoodsProctor and Gamble, Kraft Foods

An economy such as Canada’s who relies An economy such as Canada’s who relies heavily on businesses owned by foreign heavily on businesses owned by foreign companies, is called a branch-plant economycompanies, is called a branch-plant economy

Secondary Industries & Secondary Industries & Branch PlantsBranch Plants

A A branch plantbranch plant is a factory operated from a is a factory operated from a country outside of it’s host countrycountry outside of it’s host country

Kellogg’s for example, is based in Michigan, Kellogg’s for example, is based in Michigan, but it’s head office is in Mississauga and it’s but it’s head office is in Mississauga and it’s main manufacturing plant is in London, ONmain manufacturing plant is in London, ON

The Canadian Govn’t initiated this in 1879 The Canadian Govn’t initiated this in 1879 through the National Policy, which stated that through the National Policy, which stated that businesses wanting to reach Canadian markets businesses wanting to reach Canadian markets needed to build factories in Canadaneeded to build factories in Canada

This resulted in direct investment but also This resulted in direct investment but also resulted in the branch-plant economy resulted in the branch-plant economy

Advantages/Disadvantages Advantages/Disadvantages of Branch-Plant Economyof Branch-Plant Economy

Branch plants employ Canadian workers, pay Canadian Branch plants employ Canadian workers, pay Canadian taxes, and provide provides on which Canada dependstaxes, and provide provides on which Canada depends

Disadvantages to relying on foreign ownership are:Disadvantages to relying on foreign ownership are: 1.Business Functions: operations reduced from functions 1.Business Functions: operations reduced from functions

performed at head office such as research and performed at head office such as research and development, and upper managementdevelopment, and upper management

2. Innovation: little in the way of innovation at the branch 2. Innovation: little in the way of innovation at the branch plant; it follows the lead of parent companyplant; it follows the lead of parent company

3. Use of non-Canadian Materials: satellite factories rely on 3. Use of non-Canadian Materials: satellite factories rely on imports from country where parent company is locatedimports from country where parent company is located

4. Exports: branch plants rarely export; they serve the 4. Exports: branch plants rarely export; they serve the Canadian marketCanadian market

Tertiary IndustriesTertiary Industries

Tertiary industriesTertiary industries do not make do not make anything or extract anything from the anything or extract anything from the earth, but provide necessary services to earth, but provide necessary services to other businesses and consumersother businesses and consumers

Ex: Banking, construction, Ex: Banking, construction, communications, transportation, etccommunications, transportation, etc

Tertiary industries make up what is Tertiary industries make up what is known as the known as the service sectorservice sector

Tertiary Industries Cont’dTertiary Industries Cont’d

The largest service industry is retail salesThe largest service industry is retail sales Retailers traditionally buy merchandise from a Retailers traditionally buy merchandise from a

manufacturer or a distributor and sell it to the manufacturer or a distributor and sell it to the final userfinal user

Ex: Diamond companies create gems out of Ex: Diamond companies create gems out of raw diamonds and sell their products to retail raw diamonds and sell their products to retail jewellers who add the final value to the product jewellers who add the final value to the product by making it available to the consumerby making it available to the consumer

Tertiary Industries – Tertiary Industries – Cont’dCont’d

Canadian retailers are major importers, Canadian retailers are major importers, either directly or indirectly of foreign either directly or indirectly of foreign products – just look at the shelves in products – just look at the shelves in shoes and clothing storesshoes and clothing stores

Foreign retailers dominate the Canadian Foreign retailers dominate the Canadian retail service sector – few major chain retail service sector – few major chain stores not owned by corporations with stores not owned by corporations with head offices in another countryhead offices in another country

Popular Canadian Retailers Popular Canadian Retailers that are Foreign Ownedthat are Foreign Owned

Wal martWal mart Future ShopFuture Shop H & MH & M ZellersZellers Foot LockersFoot Lockers CostcoCostco SearsSears IkeaIkea Home DepotHome Depot HMVHMV The Body ShopThe Body Shop

Recent Foreign Takeovers Recent Foreign Takeovers of Canadian Businessesof Canadian Businesses

Molson – Owned by Coors (U.S)Molson – Owned by Coors (U.S) Bauer – Owned by Nike (U.S)Bauer – Owned by Nike (U.S) CCM – Owned by Reebok (Germany)CCM – Owned by Reebok (Germany) Corel – owned by Vector Capital (U.S)Corel – owned by Vector Capital (U.S)

How International Business How International Business Helps CanadiansHelps Canadians

-Organize yourselves into 8 groups; 3 -Organize yourselves into 8 groups; 3 people per grouppeople per group

-When you are in your groups have a -When you are in your groups have a representative from your grouprepresentative from your group pick up pick up the group challenge from Mrs. Forbesthe group challenge from Mrs. Forbes

-When you finish the 1st activity, pick up -When you finish the 1st activity, pick up the 2the 2ndnd one, there are 4 in total one, there are 4 in total