Contemporary Patterns of Industrialization & Development - AP Human Geography

Economic restructuring is a phenomenon that has accelerated in the last part of the twentieth century and into the twenty-first century. Economic restructuring is the process in which economies move from a blue-collar industrial base, especially around heavy industry and factories, into more of a white-collar service sector. This process is typical in most major American cities, which has produced a thinner middle class and more menial jobs.

“E-commerce” refers to the use of the internet to sell goods and services that would traditionally have required going to an actual store. It began in the 1990s as the internet exploded into existence all around the developed world. Many prognosticators at the time predicted that E-commerce would completely replace actual stores in a very short space of time, however that has not been the case. Instead we have seen an integration of E-commerce into the existing economy - where some things are bought online and some things are bought in person.

In the second half of the twentieth century most of the major corporations of the world transitioned their manufacturing centers from the developed world (countries like the United Kingdom, Germany, and the United States of America) to the developing world (countries like India, Mexico, and Brazil). The primary reason behind this is because it is extremely cost effective for the companies- they have access to much cheaper labor and, often, lower tax rates and other benefits. The consequences of this movement are still being felt and understood, but it has involved the transition of the national economies of much of the world.

A “conglomerate corporation” is a company that is comprised of many smaller firms who all specialize in various aspects of the company’s product development and sale. So a large corporation might have different firms responsible for harvesting raw materials, manufacturing products for sale, transporting products to different markets, advertising and marketing, and so on. In the twenty-first century almost all major corporations are “conglomerate corporations.”

It has become common in recent years for companies to transfer service-based jobs, particular call centers, to other countries. This is called “outsourcing.” This is generally done because the company knows it can save money by paying the outsourced workers a lower wage to do the same job.

All of the American regions are correctly matched with their regional economic specialties except Hartford. Hartford is a city in Connecticut and has an extremely high concentration of insurance industries. It is not known for tourism.

E-commerce was the name given to any sales-related business conducted over the internet. When it first exploded in the 1990s, many economists expected E-commerce to completely eliminate and replace the business generated by actual in-person shops. These in-person shops are referred to as “brick and mortar businesses.” Instead, E-commerce has become an option available to consumers but not a replacement of traditional brick and mortar businesses.

Tertiary economic activities are activities in the service sector. Agriculture is a primary economic activity, focusing on use of natural resources.

Since the inputs weigh more than the final products, and transportation is generally more expensive for heavier things, the bulk-reducing industries locate themselves near their inputs in order to pay less for the transportation of heavier items.

The cost of labor for loading and unloading goods from vehicles is considered a fixed cost, and this fixed cost doesn't change regardless of the distance traveled. Therefore, the longer the distance traveled, the cheaper the cost of transportation per kilometer traveled.

A closed shop place of employment is a place of employment that will only hire members of a labor union. It is "closed" because it is restricted to only union members.

Vertical integration happens when one company controls all aspects of its production process.

In the 1970s and 1980s most of the developed world transitioned from a primarily industrial economy to a service-based economy. This had many benefits for the people of the developed world, such as higher wages and safer working conditions, but also brought with it many difficulties. The demand for unspecialized and factory-based labor declined rapidly and dramatically, as those jobs were transitioned overseas. Many workers were too old, or too deprived of any higher education, to transition smoothly into a new working environment, and unemployment and social unrest were rife throughout the developed world as a result.

During the past half-century much of the developed world has experienced a process known as deindustrialization -factories and manufacturing centers have closed down in the United States of America, Western Europe, and Japan and those jobs have been outsourced to the developing world. This has led to the rise of “service-based economies” in the developed world. A “service-based economy” is an economy in which most of the workers are involved in providing services such as research, marketing, telecommunications, innovation, teaching, and so on.

During the late nineteenth and first half of the twentieth century the industrial center of the United States was the Midwest. Factories in Michigan, Ohio, Illinois, and Pennsylvania accounted for a disproportionate share of American industrial power. When, in the 1970s, American companies began to move their manufacturing centers abroad, the economy of the Midwest suffered dramatically. Unemployment rose very quickly and people began to migrate away from the region in search of work and a sustainable living situation. This has led the region to be called the “Rust Belt,” based on the rusting heavy machinery lying around throughout the Midwest. Cities like Detroit, Flint, Akron, and Toledo have felt this transition particularly extremely.

While India is the second most populous nation in the world, the rate of economic development is much lower compared to nations like the United States (third most populous nation), Japan (tenth most populous nation), and Australia. Nations with high population density tend to be poverty-stricken as well, due to too many people in a given area competing for resources (agricultural, financial, etc).

The Core-Periphery Model is used by geographers to describe the division of the world into three segments. The “core,” places like most of Europe and North America, where standards of living are high and most of the world’s products are consumed; the “semi-periphery,” where most manufacturing centers are and where standards of living are extremely variable; and the “periphery,” where most raw resources are harvested and people are extremely poor.

In the poorest parts of the world the vast majority of the population is engaged in primary economic activities like farming, fishing, hunting, and mining. Although there might be some elements of secondary and tertiary economic activities in these countries, the bulk of secondary economic activities are undertaken by countries in the semi-developed world - like Mexico, China, Brazil, and regions of India.

The “back-wash effect” refers to a phenomenon that has been observed on numerous occasions during the process of deindustrialization. It states that as one region of a state flourishes economically it does not necessarily improve the economy of another region, but instead, conversely, diminishes the significance and strength of another region. A classic example of this that is mentioned often is the “Rust Belt” experience of the Midwest.

Countries in the “semi-periphery” are countries that have a standard of living lower than those in the “core,” but much higher than those in the “periphery.” They are almost exclusively centers of manufacturing and exporting. Of these countries, only Vietnam does not qualify as a country in the “semi-periphery.” It is considered to be in the “periphery” due to its low standard of living.