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World Geography 3202 Secondary and Tertiary Activities
Unit 5 • Gives us insight into selected secondary activities in which humans engage as they transform raw materials, provided by primary activities, to more finished forms. • Manufacturing utilizes capital and labour inputs to move materials through a series of processes until a higher-value added product is obtained. • Services involve the “manufacturing” of intangible goods or services for human use. • You will examine the importance of the secondary and tertiary sectors and factors that help to account for their location
Three Sectors of the Economy • Primary economic activity involves the collection of raw materials from the earth. Farming, fishing, mining, forestry are the classic parts of the primary economy. • The farmer takes plants from the land, the forester takes trees from the forest, the fisher takes fish from the ocean and the miner takes ore from the ground. • All involve collecting natural resources.
Three Sectors of the Economy • Secondary economic activity involves processing or manufacturing raw materials into products for people to buy. • It is often referred to as the manufacturing or processing sector. The cows are butchered in to roasts, T-bone steaks and ground beef and packaged for sale at the grocery store; the trees are milled into lumber or pulped into paper; the fish are gutted, filleted, and frozen for market; while the ore is refined into steel ribbons or copper wire or gold ingots. • You can see that there would be a multitude of examples for secondary processing but all the activities start with a raw material and convert it to a product for sale. • This is sometimes referred to as Value adding. • The tree would be much less expensive to buy than the lumber. The lumber has value added. Ship building, as depicted above, is an example of the manufacturing sector.
Three Sectors of the Economy • Tertiary economic activity does not involve raw materials rather it involves providing service to people. • Hence it is often referred to as the service industry. • Nurses, doctors, lawyers, teachers, waitresses, hairdressers, sales people all provide services for other people. • Tourism is an important part of the tertiary sector and golf has become a thrust for investment in Newfoundland & Labrador.
The Language of Manufacturing • Inputs: materials & factors that go into making a product. Example; raw material, power, buildings, land, labor, decisions, capital, machinery • Manufacturing processes: those processes that change a raw material to a usable form. Three types: – Conditioning: minimal change to a resource. Example; logs into lumber; fish into fillets – Analytical: resource converted to a number of different products. Example; cow into leather, milk & cheese – Synthetic: several resources are combined to make one resource. Example; light bulb has glass, tungsten, Nitrogen & aluminum. • Outputs: finished product from a manufacturing process. For example the output from the fish plant is fish sticks or frozen fish fillets.
Labour Intensive vs. Capital Intensive • Industry can be classified in many different ways: – We shall look at two ways of classifying industry. • Manufacturing businesses can be classified based on the process. • All manufacturing businesses can be classified as either requiring large quantities of labour or of machinery to do the processing.
Labour Intensive vs. Capital Intensive • Machinery now does much of the work formerly done by humans. • Some manufacturing businesses might be more difficult to classify because they require large quantities of both capital labour. • Labor intensive: requires a lot of person hours to produce the product. Ex. Jewelry making • Capital intensive: requires a lot of expensive equipment to make the product. Ex. Automotive industry
Heavy vs. Light Industry • Manufacturing businesses can be classified based on the output. • All manufacturing businesses can be classified as either producing large, expensive items for other business to use in manufacturing or transportation or as producing small items for consumers to purchase directly.
Heavy vs. Light Industry • Some manufacturing businesses might be more difficult to classify because they produce items that might be used by business or by private people. • Heavy industry: produces big expensive products for other industry. Ex. Ship yard, tractor production • Light Industry: produces products for consumers. Ex. Pop industry.
factors that influence the location of an industry • Site/Physical Cost Factors • Three major factors of site (physical location) • Proximity to raw material. Heavier & bulkier the raw material the closer the industry will be located to reduce transportation costs. – resource oriented industry • industries that are located close to the resource because it is to heavy/bulky to transport; • communities frequently spring up around resource industries. Labrador City, Churchill Falls, Grand Falls-Windsor and Bonavista are good examples. Can you think of other examples? • Land: price, level, good drainages, dense well-settled soil • Energy: not as important a factor today due to our ability to transport power long distances.
Human-based Cost Factors • Market Oriented Industry • Industries that are located close to the market because the product is expensive to transport. The resources are not bulky or expensive to transport. The Soft drink industry is a good example. • Market vs. Resource Oriented Industries: • As we examine the influence of “weight gain” & “weight loss” on the location of industry we see that if the product weight is greater (weight gain) than the input resources it is located near market. Conversely if product weight is less (weight loss) than the input resources it is located near resource.
Human-based Cost Factors • Agglomerating Tendency • Agglomerating tendency refers to the tendency for factories producing related products to locate close to each other for mutual benefit. Ex. Car factory & tire factory. How does each benefit by being located close to each other? • Industrial Parks • Industrial parks provide many advantages for a business. Existing infrastructure of roads, on ramps and off ramps to highways, large lots, sewer, ample electricity, and close location to related industries make industrial parks attractive for manufacturing businesses.
Human-based Cost Factors • Labor force characteristics that attract business • Wages expected: lower wages in some developing countries like Mexico, and the Philippines attract manufacturers • Training: highly skilled labourers can attract businesses that require welders, mechanics, carpenters etc. • Benefits (EI, Pensions etc); lower costs of employment insurance, pensions , etc. can attract business just as easily as low wages. • Availability; a high unemployment rate might attract business, especially if large numbers of workers are required
Government Influence • Transportation subsidies affect the location of industry. • Subsidies allow businesses to locate farther from the resourse. • Subsidies allow governments to encourage industry in rural areas. Examples: – – ice breakers in Botwood; roads in Labrador; cost of coastal transportation in Labrador; cost of crossing the Gulf.
Government Influence • Tax breaks affect the location of Industry. • Provinces like Newfoundland have attempted to attract business by offering tax breaks. The company obtains a financial break while the province gets the advantage of putting people to work.
Industry Location; The Global Picture • The highly industrialized areas on the earth's surface are concentrated in 4 definite regions: • North America • Western Europe • Japan • Australia
Industry and the environment • Industry has waste out put as well as product output. Three of the many types of waste are outlined below. • Green house gasses; ex. Carbon dioxide, Chlorofluorocarbons & methane. Causes global warming & associated problems.
Industry and the environment • Acid Rain; ex. Sulphur & nitrogen. Decreases soil fertility, kills fish, corrodes buildings • CFC’s (chlorofluorocarbons); ex. Refrigerants & sprays. Breaks down ozone which filters harmful cancer causing UV rays. • Industrial wastes are obviously mostly related to areas of heavy industry. However, when we look at the maps on p. 238 and realize prevailing winds play a role we can see that pollution does not recognize political or economic boundaries.
The Role of GOVERNMENT and INTEREST GROUPS in the face of environmental threats posed by industry. • Remember: “It is the extreme views that define the middle”. • Interest groups often play the extremist. They raise valid points of concern and argue them vehemently. • Government has the role of balancing environmental concerns & encouraging economic development.
Averting an environmental threat posed by an industry • prevailing winds are transporting acid rain from industrialized areas and depositing it in locations down wind from the industrialized area. It is important to note that industrialized areas as well as those areas down wind from industrialized areas are affected.
Averting an environmental threat posed by an industry • Any solution to industry related problems will have to be dealt with by cooperation and consultation between different nations. The major environmental summits that have been held in recent years are examples of that. The recent Kyoto summit and the summit held in Rio de Janeiro several years ago attempted to get countries to reduce their carbon dioxide emissions.
Solutions to solving the acid rain problem include: • government regulation to reduce sulphur & nitrogen emission; • development of sulphur filtering equipment; • tax breaks for companies if they reduce pollution output; • meetings and consultation between business, environmentalists and government to decide on a plan of action
selected social/moral issues associated with manufacturing operations • There are many social/moral issues associated with manufacturing operations. Examples include child labour, safety of workers and a Company’s responsibility to be environmentally friendly. • Business drives the economy and provides us with our high standard of living here in the western world. The question we have to keep asking ourselves is "are industries acting within the moral parameters of our society? ". • In Canada and most well developed nations there are strict regulations about safety, waste emissions, age of workers, and corporate responsibility. In some developing nations the regulations might not be in place or they might be relaxed in the hope of stimulating business instead of inhibiting it.
types of tertiary activities • • Tertiary Activity Service industry. Providing services for people Ex. Doctor, lawyer, waitress, tourism industry, mechanic, teacher • Public vs. Private Tertiary activity. • Private service industry is run by private business and requires that a profit be made from the service. Ex. Mechanics, Lawyers, Tourism.
The four types of tertiary activity are: • Distributive activities: involves the transportation and sale of all products from manufacturer to consumer. ex. truck driver, warehouse manager, sales person • Financial Activity: involves banks, insurance companies, financial advising companies, and trust companies. • Personal Service: involves a wide range of services from legal services, to food services, to entertainment and counselling services. • Government service: Public service industry is operated by Government and is not for profit. On the contrary it cost tax payers money. Ex. Education, health care, mail, water, sewer, roads. Hence the term “ public servant”
The four types of tertiary activity are: – It is important to note that many careers in the tertiary sector can not be classified as public or private. A teacher can work in the public school system which is public service or s/he can work for a private college which is private service. – Why does the government provide some tertiary services?
factors that determine the location of service industries • Proximity & price are two key factors that determine the location of service industries. – Location: services must be located close to a large enough market to produce DEMAND. – Viability: services are only viable as businesses if the demand is high enough & the price is reasonable. • Service Availability vs. Population Size. – Larger populations support a wider range of services. – Consider: Health services, Education, recreation facilities, shopping facilities, hotels, restaurants and you will see that the range of services available is directly related to community size.
factors that account for patterns in world trade for a selected commodity • Tourism is one of the fastest growing sectors of the economy. • It is also one of the most profitable. • If your country happens to be located in a sunny area or to have good ski slopes or to have cultural attractions then people will flock there and spend money. • Furthermore from a country's perspective international tourism is new money coming to the country.
Tourism • International tourism has increased dramatically for 6 reasons: • people have increased leisure time due to available technologies; • retired people have secure incomes and are able to travel; • people have increased discretionary spending money; • travel has become easier and less expensive; • travel agencies have packaged attractive "all expenses paid" trips; • advertising has been effective using attractive & exotic pictures.
Tourism • Travel agents see that people are usually looking for one of three different kinds of vacations: • Climate oriented (skiing & sun bathing are at opposite extremes but both rely on climate) • Landscape oriented (some people like to view the sites) • Culture oriented (cultural land marks are of interest to people ex. Athens)
factors that affect the location of a quaternary activity • The quaternary sector of the economy is a specialized part of the Tertiary Sector. • QUATERNARY activity refers to activities which involve the collection, recoding, arranging, storage, retrieval, exchange, and dissemination of information. • Computers, Cell Phones, E-mail, and the WWW are some of the examples of new information technology which drives the quaternary sector.
Factors Affecting Location of Quaternary Activity • People & Infrastructure: • Populations of people concentrated in an area makes the information sector viable. • Think about the areas that can avail of digital cell phone service, high speed Internet connection. • Historically, information technology like cable TV, telephones, and Radio flourished in areas where there was a population large enough to support them.
Factors Affecting Location of Quaternary Activity • Infrastructure is required for the communication of information. • The infrastructure has been closely linked to populated areas. Interestingly enough the development of infrastructure is changing so much and decreasing in price to the point it may change the patterns of infrastructure. • Lesser developed nations currently do not have much access. • However, Lesser developed nations are not tied to the old and outdated infrastructure. • This might be the time for lesser developed nations to build infrastructure and increase their share of the information technology market.
Factors Affecting Mass Communications Patterns. • In the telesphere of global communications there are islands and continents of activity and there are deserts or areas where there is no activity because there is no connectivity. • The areas of connectivity are closely associated with development and you will see that in your readings and activity.
Mass Communication Affects Workplace Location. • As more and more people work in the information sector we may see a trend towards reducing urbanization. • People would not be tied to an office building if they could work at home. • Maybe they could work at home on the country farm and submit work electronically.
Mass Communication Affects Workplace Location • Businesses need not be located physically near other businesses as we saw with the agglomerating tendency of the manufacturing sector. • If Infrastructure improves to the point it overcomes distances information technology will be a new source of employment and economic activity in rural depressed regions.
the economic importance of the tertiary sector • Economists recognize that the tertiary industry has expanded significantly in the last 100 years. • In Canada the tertiary sector of the economy has grown from 36% of GNP - 73% of GNP over the last 100 years. • A quick survey of any high school class will reveal that students are expressing a preference for a career choice in Tertiary activity
the economic importance of the tertiary sector • The entire tertiary sector is growing and is becoming a much larger part of the economy of developed nations. • The multiplier effect is in part responsible for this phenomenon. • As the secondary sector of the economy grew there were more people working in urban areas as manufacturers.
the economic importance of the tertiary sector • The concentration of people meant there was more need for services. • Service industries grow in turn. • The people working in the tertiary industry need services too so the growth of the service industry continues. • While the entire service industry is growing we will look at two tertiary growth sectors in particular, International tourism and information technology.
International Tourism • In the last quarter of the twentieth century International tourism increased 12. 5%. There are several reasons for this which are outlined below. • More leisure time since WWII: – More retired people because of aging population – Younger retirement age. It did average 65 now it is closer to 55. – The average holiday time has increased from 2 weeks to 4 weeks
International Tourism • More money for leisure & recreation since WWII. – Wages have increased giving people more disposable income • Travel time and travel costs have decreased • Travel agencies are offering all inclusive packages which attract people • Appealing advertising campaigns by travel agencies
Tourist Destinations • Travel agencies and related tourism industries have both been a cause and a result of the increased interest in tourism. • Tourists tend to be looking for any one or combination of three destination sites.
Tourist Destinations • Climate-oriented Sites: • warm climates, sunbathing and swimming attract some tourists from colder regions. • Abundant snow and good skiing conditions attract those avid skiers and snowmobilers • Landscape-oriented Sites: • some tourists are attracted by site seeing opportunities. • Culture-oriented Sites • Some tourists are attracted by historic sites like Athens and Jerusalem.
Quaternary Sector of the Economy • The quaternary sector of the economy is a specialized part of the Tertiary Sector. • QUATERNARY activity refers to activities which involve the collection, recoding, arranging, storage, retrieval, exchange, and dissemination of information. Computers, Cell Phones, E-mail, and the WWW are some of the examples of new information technology which drives the quaternary sector.
Economic Indicators • Development is a difficult thing to define. • Economists, sociologists, cultural geographers and all social scientists use "indicators" to give some degree of measure to the concept of development.
Economic Indicators • There seems to be two aspects to development, economic (financial) and social (human). • Social scientists have developed economic indicators and social indicators. • There is some debate over which indicators are a better measure of development. • It is very likely that a variety of indicators is the best way to determine the level of economic development. • This lesson deals exclusively with 2 economic indicators.
Employment Structure • Economists have recognized that those countries that have become "developed" have been able to move their economy beyond the primary sector to the secondary sector which in turn grows the tertiary sector. • In other words developed countries have a much larger percentage of their work force employed in the secondary and tertiary sectors, while lesser developed countries have most of their work force employed in the primary economic sector.
Employment Structure • When economists calculate the percentage of people working in each economic sector the statistic created is known as the employment structure. • By way of example we will look at country "X" and country "Y" which have very different employment structures. By using fictional countries you have no other preconceived notions of the countries or their level of development. We will see how economists would classify each countries development based soley on the employment structure.
Employment Structure • • Employment Structure for Country "X" Primary sector Secondary sector Tertiary sector 60% 15% 25%
Employment Structure • Economists would look at country X and realize that it is not a developed country. It might be developing but a developed country would have a great majority of its workers in the secondary and tertiary sectors of the economy.
Employment Structure • • Employment Structure for Country Y Primary sector Secondary sector Tertiary sector 5% 25% 70%
Employment Structure • Economists would classify country Y as a developed country. It has a great majority of its workers in the secondary and tertiary sectors of the economy.
GNP per Capita • GNP per capita is a measure based on the Gross National Product (GNP) of a country. GNP refers to the total value of the production of goods and services in a nation measured over a year, together with any money earned from investment abroad, less the income earned with in the nation by non-nationals. • The GNP per capita takes that dollar value and divides it by the population of the country.
GNP per Capita • For example if the GNP for Country X was $5, 000 and there were 1, 000 people in the country then the GNP per capita would be $5, 000 ¸ 1, 000 people = $5, 000 person or a GNP per capita of $5, 000. • It is very likely that country X would have a much higher GNP per Capita.
GNP per Capita • Economists do recognize there is a major flaw in this measure as a measure of "Standard of Living. " • This measure is an average which assumes that the wealth in the country is evenly spread. • This is often not the case. If one or two families in the country are very rich and control most of the money then many of the people could be living in poverty even though the GNP per capita is high.
The level of development in a country refers to two type of development, economic development and social development. • GNP and GNP per capita are usually expressed in U. S. Dollars. • Economic development refers to how well the economy is doing and how much money people have at their disposal. • Social development is often closely tied to economic development but refers to more human indicators of well being such as life expectancy, infant mortality rate, literacy rate, availability of communications.
• Generally speaking, people in more developed countries are better off and have an easier life than people in lesser developed nations. • Economists and sociologists use the term "standard of Living" to describe how well off people are. Standard of living equates to quality of life.
• The level of development among nations is far from equal. • Some countries have a very high standard of living with long life expectancy, equal rights, high average wages, strong economies, great health care and high literacy rates • while other countries have a short life expectancy, fierce discrimination against woman, very low wages, faltering economies, little health care and very low literacy rates.
The United Nations recognizes the disparity and has set forth eight "millennium goals" to reduce the disparity among nations. • • Eradicate extreme poverty and hunger Achieve universal primary education Promote gender equality and empower women Reduce child mortality Improve maternal health Combat HIV/AIDS, malaria and other diseases Ensure environmental sustainability Develop a global partnership for development By the year 2015 all 189 United Nations Member States have pledged to meet the above goals