5 Determinants for Economic processes in a geograp
D1: Resources distrubtion: from population to natural and productive resources
D2: Technical and technological development: the changing nature of innovation over time
D3: Imperfect competition. Transport costs and resulting economies of scale
D4: Current norms institutions and policies
D5: History starting and end conditions - path dependency and expectations
These determinants will help us explain both the determinants of location choices and the resulting trade flows at local, national and international levels.
Shaped the world as we see it today.
- Overthrew previous hierarchy of cities
- Cities went from shelter to the idle, sterile class to main source of growth and increase in living standards
- GDP growth at the time, although low by 20th C standards, lifted most boats spectacularly
- Life expectancy gains, living standards, broader geographical horizons (first paid hols 20th C)
- People want economic growth, try to harness fore of economic process (MDG)
- Explains preponderance of economics in politics today
First Wave of Industrialisation
First wave linked to D1 (Resource distribution - from population to natural and produtive resources)
- Economic development linked linked to amount of land a country could own and number of people on that land.
- Sweden 18th C though it had both - didn't.
- Beginning of the energy and agriculture revolution in Netherlands and England from end of 17th C to mid 19th C.
In middle 18th Century in UK, a 'perfect storm' of:
- Available capital
- Investment opportunities
- Manpower storage
- Agricultural boom
With end Napoleonic Wars, UK comfortably leading in mining and early industries.
Basic Rules for Industrialisation
- SMITH (1776) described what he saw
- Individualist ethic coupled with social responsibility
- A hedonist society: the greater benefit for the greater number.
- A new work organisation to benefit from the incoming innovations
Social dimension of the reorganisation of work tends to be underestimated.
The steam engine became altar around which whole factory revolved.
Spatial Diffusion of Industrialisation
- Process moved to the continent; Belgium and France, the Germany, Italy and Spain...
- Clear geographical progression, but quite slow diffusion
- Bernhofen and Brown (2005) study the goods traded when Japan opened up to trafe (1850s) and find them to be same compared to 18th C.
- Before WW1, living standards were similar in Vienna and London
Innovation and Second Industrial Revolution
- 2nd wave started in 1870s..
- Century of innovation (fridge, combustion engine, steel, cars, planes, radio, phones...)
- Technological innovation turned into more disruptive social innovation
- US starts won industrialisation in 1830s and truly catches up post civil war
Key social innovation: conveyer belt, mass market and mass production: Taylorism and Model T. After WW2, model spreads to Europe. UK started in 1930s.
Democratised for the emerging middle class. Welfare state develops early laws.
Success of industrialisation based on:
- Available resources: started in region with strong access to natural resources and labour
- Market for these resources
- Innovation, to develop new products, new social models, and process
- Ethos. Social model for the production side "work ethic" and thrift, and consumption side: materialism, hedonism: formal and informal institutions.
- 1970s it all stops.
- A secular trend? Temporary trend? New rules for economic proceses and spatial organisation?
Manufacturing Belt to Rust Belt
Manufacturing Belt to Rust Belt.
- Concentrated in UK mid-West North, US Rust Belt and German Ruhr Valley.
- UK had greatest absolute manufacturing employment decline worldwide
- 1966: 11.6 million manufacturing jobs
- 1994: 6.5 million manufacturing jobs
US Rust Belt
- Detroit 1978: 270k jobs in transport equipment industry
- Detroit, 2013: Bankrupcy.
End of Fordist Regulation
Growth model of the first half of the 20th century could be seen as a consistent model of economic regulation, a comprehensive social, cultural and econoimc process.
Failure of model can be attributed to the gripping of its regulatory mechanisms:
- Diminishing productivity gains
- Deadlock between governments and unoins "stagflation"
- Fall of Bretton-Woods monetary system
- High taxation? Sweden didn't suffer as much with high taxation.
Japan, then the 4 dragons (HK, Taiwan, Sigapore, South Korea) and baby tigers (Indonesia, Thailand, Vietnam) boomed as industrialised world was deindustrialising.
Cheap labour with sufficient skills
Then came turn of China and India, talks of the BRICS (plus Chile, Turkey, Mexico etc.)
Triggers here are economic, political and cultural.
Emergence of human capital
1962 France has working pop of 19 million, with 66% men.
2007, of the 26 million working, only 53% male. (Feminisation)
Employed people with university degree went from 8.5% to 51% of population.
Change is more striking in UK than US. New European middle class had to be employed differently. Generated shift in consumer needs and tastes.
Most material needs met, so a rising demand for services.
Where nature of 3rd industrial revolution is still debated: did it happen?
As 'Glorious Thirty' were unfolding, some innovations helped and underctu the tidal wave industrial development.
One of most dramatic and less spectacular one was invention of the container.
The high speed train, computer, Nuclear Power stations, the mall, motorways, tankers etc.
Management and financial innovation also played a role, although the first basic network existed from the Portugese, Dutch and mostly British since end of 17th C.
Regarded as a nation wide phenomenon, but is mostly an infra-national issue in terms of visisble impact.
Cities are crucial for understanding contemporary economic and social processes.
Observe urban decline as a result of deindustrialisation across many countries in the global north. UK cities hardest hit by deindustrialisation.
Still, cities are main centres of economic power and activity. Greatest labout demand and supply in concentrated areas.
Notion for urban resilience.
Reindustrialisation in Cities
Why did some withstand the shock of deindustrialisation better than others?
- "Rust Belt Revival"
- The automotive industry in the old US South
- Detroit and Chicago, London and Birmingham, Edinburgh and Glasgow, ...
- What decides who bounces back?
- Is there a need to 'regroup and reform'?