Chapter 27: Deindustrialization & Rise of the Service Sector

•Global Patterns•New International Division of Labor

•Foreign Investment•Deindustrialization

•Specialized Economic Zones

Global Patterns

• Fordist- assembly line; dominant form of large-scale manufacturing• Post WWII- mass consumption, labor activism, decline in costs of

transportation challenged old order – Fordist order• Postindustrialization: modern production; producers can move sites

more freely due to technology and communication improvements• Readjustment of industry directed to more service and information

industries • Some transnational companies (TNCs) and multinational companies

(MNCs) produce more than some countries; Ford, Exxon, General Motors,…

Postindustrial Industries

• Service industries (tertiary) don’t generate a tangible product

• They produce a myriad of services we use

• Specialization broken into two designations:– Quaternary services– Quinary services

• Quaternary Services:– Collection & processing of

information– Finance, administration,

accounting, insurance, computer services

• Quinary Services:– Complex decision making

and advancement of human capacities

– Scientific research, higher-education, high-level management

New International Division of Labor

•Periphery regions are dependent on core for manufacturing jobs

•Core TNCs are dependent on periphery for cheap labor, fewer environmental regulations, and

Foreign Investment

• Foreign direct investment: capital invested by a country or corporation in a foreign country- usually in the periphery; U.S., Japan, Germany, U.K., China

• Foreign debt: for many countries- cost of servicing debts (repayment + interest) exceeds revenues (i.e. Argentina)

Deindustrialization

• Regions with high labor costs & old technology may experience deindustrializatoin. (core countries, “Rustbelt”) as new tech. can be more appropriated elsewhere

• US Sunbelt drew investment away from NE b/c of lower rates of unionization, higher amenity values (i.e. place), lower cost of land, cheaper tax breaks on land- gov’t contracts

World Cities

• John Friedman (1980s): control centers of world economy- not largest per se, but centers of financial and corporate institutions

• Most ‘World Cities’ are located in developed core

• Cities also illustrate changing patterns of human geography- populations in core cities sometimes feel greater relationship or affinity with other core cites (Londoners and New Yorkers and Tokyans)

Economic Concentration

• Specialized Economic Zone: area w/in a country in which tax incentives & fewer environmental regulations attract foreign business/investment

• Manufacturing export zone: periphery; favorable tax, regulatory & trade arrangements

• High technology corridors :core; network of research, development & tech. enterprises

Time-Space Compression

• Coined by geographer David Harvey- developments have drastically changed the way we think about space and time

• Refers to the social and psychological effects of living in a technologically advanced world – offshoot of Time-space convergence

• Time-space convergence – refers to the greatly accelerated movement of goods, ideas, and information during the 20th cen. made possible by tech. innovations in transportation & communication

• Transition from Fordist ind. system to a faster, more flexible system that has opened new markets & brought places “closer together”

• World Wide Web - no accurate estimates of its economic impact, but it is growing