NOTES: UNIT 6: “ECONOMIC GEOGRAPHY”Goals:

to understand how people earn their living that livelihood systems vary spatially how economic activities are interrelated and linked the how and why of variations in the spatial patterns of economic

activityEconomic Systemspatterns of production and consumption and the location of economic activities within each system• subsistance economic systems• commercial/market economic systems• planned/command economic systemsDistribution?most countries show combinations of each system* dual economies -- rural versus urban

Technology Systems affect geography of economic development and systems

Characteristics of Each System1. Subsistanceagricultural, rural, technologically underdeveloped regions; intensive ag vs. extensive ag (pastoralism); one crop plantation economies--specialization based on colonial relationships

2. Marketcomplex, advanced economies, hierarchically & spatially linked in patterns of consumption, production, exchange of goods & services

profit specialization even in ag. interdependence

Economic location decisions based on… accessibility to material inputs (raw materials) labor with particular skills processing costs (land, taxes, energy) relative pull of market transfer costs at other locations (transportation) local government policies

weight gaining versus weight losing(weight, bulk, perishability, fragility)

Goal: Maximize profit comparative advantage (skill labor, environment, resources) specialization and complementarity trade -->networks -->interdependence (agglomeration effects--cluster

advantages) intervening opportunity? distance decay and accessibility?

Location of agricultural activities in a market economy: von Thunen

Agriculture in the Global Economic Systemrevolutionary phases: subsistance-->market oriented

Four Kinds of Economic Activities: primary, e.g., secondary, e.g.,tertiary, e.g., quaternary, e.g.,

Primary economic activities are those that use natural resources directly.Secondary economic activities use raw materials to produce or manufacture something new and more valuable. Examples of secondary economic activities include manufacturing steel, processing wheat into flour, milling lumber into plywood, iron smelting, chemical industries, power production, and construction.Tertiary economic activities are those activities which provide services, personal and professional services such as doctors, teachers, dry cleaners, and secretaries as well as retail and wholesale services such as store clerks, truck drivers, and fast-food providers.Quaternary. In modern economies some individuals process, administer, and disseminate information. Such activities are termed quaternary which is used to describe "white collar" professionals working in education, government, management, information processing, and research.

Location of Economic Activities? Geographers are concerned with the spatial organization and location of economic, transportation, and communication systems which produce and exchange the great variety of commodities (raw materials, manufactured goods, capital, and services) which constitute the world economy.

Primary economic activities are located at the site of the natural resource being exploited, for example, iron mining at the site of the iron deposit.

Secondary economic activities locate either at the site of the resource or close to the market for the manufactured/processed good depending upon whether which affect the location of economic activities (labor costs, energy costs,availability of capital, land, resources, and expertise). In the case of lumbering, the finished product is cheaper to ship than the raw materials so lumber mills are located close to forests to minimize costs (and maximize profit). In the case of flour and bread, it is cheaper (and easier) to ship wheat than the finished product,bread. Consequently, bakeries are located close to consumers in cities, again, to minimize costs.

Tertiary economic activities locate where services are required, that is,where people are.

Quaternary economic activities are not tied to resources, the environment, or access to a market. With improvements in telecommunications, these economic activities can be located anywhere. Factors which do tend to affect the location of "high-tech" economic activities include access to universities and research centers and to a pool of highly trained and skilled workers, availability of

venture capital, proximity to places with high quality of life attributes (scenery, recreation, climate, quality education system) and access to excellent transportation and communication networks.

Patterns of Economic Development  Development can be defined as the extent to which the resources of an area have been brought into full, productive use. Carefully look at the patterns of economic development shown on maps. Note that most less developed nations are located in the "southern" part of the world and that most developed nations are in the "northern" half of the world. People talk about this in terms of the North/South split. Other people (the authors of the text) see this in terms of core/periphery relations.This pattern may be explained by a number of different factors including

resource poverty overpopulation former colonial status location in relation to the core vs the periphery

but there is no single reason to explain the level of economic development in most countries. 3. Planned Economiescentral planning to achieve government-determined objectives; gov't agencies control supply/price; decide where to locate industries and crops to grow on social (not profit) criteria Economic Developmentprocesses of change:

changes in structure of region's economy changes in forms of ec. organization changes in availability/use of technology

Economic development uneven core-periphery patterns resources uneven imperialism/colonialism result: world system

Characteristics of “Slow World” Periphery | LDCs...VS Characteristics of Developed Versus Less Developed Countries

Less Developed DevelopedPer capita incomes are low, and capital is scarce.

Per capita incomes are high and capital is readily available.

Wealth is unevenly distributed within individual countries, e.g., Colombia, 2.6% of population owns 40% of the national wealth.

Wealth is comparatively evenly distributed, e.g., Canada, 10% of population owns 24% of national wealth.

Primary industries dominate national economies.

Manufacturing and service industries dominate national economies.

High proportion of population engaged in subsistance agriculture.

Farming is commercial, efficient, and mechanized.

Populations are rural; but cities are growing rapidly.

Populations urban, cities growing slowly.

Birth and death rates are high and life expectancy is low. There tends to be a high proportion of children.

Birth and death rates are low and life expectancy is high. High proportion of people over 60 years old.

Inadequate or unbalanced diets resulting from a low consumption of protein; hunger and malnutrition common.

Adequate supplies of food and balanced diets; overeating sometimes a problem.

Diseases, especially infectious and parasitic diseases, common. Health care poor.

Low incidence of disease; good medical services available.

Overcrowding, poor housing, few public services, bad sanitation--poor social conditions.

Social conditions generally good.

Poor educational facilities, high levels of illiteracy--low levels of scientific and technological development.

Education opportunities excellent, high literacy, advanced science and technology.

Women may be held in an inferior position in society.

Women are increasingly treated on equal terms with men.

Geography of Global Economic Changepostindustrialismchanges in percent of pop. engaged in certain occupationsinternationalization of financetechnologygrowth of consumer markets

Developing A World System: Global Economic InterdependenceChange from from industrial to post-industrial. Change in scale: New International Division of Labor (NIDL)Consequences?

many manufacturing and processesing jobs have moved from the US overseas to cheaper wage regions.

more people in our nation are employed in service (tertiary and quaternary) jobs. linked economically with all regions of the world (think of profit, specialization, complementarity, trade, networks, intervening opportunity and interdependence).

This has caused major geo-economic restructuring. End result has been a global world economy.

Most powerful economic entities in the world are transnational corporations (TNC's), also known as multinational corporations. Exxon, Shell, Hitachi, GM, Nestle's and Nissan are all TNCs.

The TNCs are highly concentrated geographically in advanced economies, e.g., Japan, US, Canada, and Western European nations like Germany and France. Together they produce 70% of global foreign investment.

This money flows into the developing world, especially into NICs--newly industrialized countries like Taiwan, Singapore, and China. The investment has caused these nations to industrialize very rapidly.

At the same time, command economic systems have collapsed in many nations, e.g., Russia, Poland, and Hungary, while others have undergone liberalization and privatization, e.g., China. These countries are in the process of creating market economies.

New trade agreements and liberal trade policies e.g., European Union, NAFTA, GATT.

The world economy is therefore becoming even more transnational.

Two sectors of the economy have been especially affected by globalization--financial services and agriculture. What happens on the stock exchange in Tokyo affects the economies of the US and Germany, and visa versa. Banking is a 24 hour, world-wide operation. With an ATM card you can get money in almost any nation in the world instantly. And think about where your food comes from--an integrated global agrifood system.

The result of this global economic change is an uneven pattern of world development.

Be sure to put this information into a spatial context!