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Chapter 7 Manufacturing
Fundamental nature of manufacturingprocesses
Major manufacturing regions in the world
Deindustrialization in the developed worldand the rise of manufacturing in thedeveloping world
Sector specific dynamics
The rise of flexible production systems,business process outsourcing & downsizing
(The product life cycle model is not in thischapter again)
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The Nature of Manufacturing
Elements of the manufacturing process:
(a) product design, (b) assembling inputs,
(c) transforming the inputs, (d) marketing
the product
Location decision Weber model again
Value added in each stage of production
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Porters Value Chain
Firm InfrastructureHuman Resource Management
Technology DevelopmentProcurement
Support
Activities
Inbound
LogisticsPrimaryActivities Operations OutboundLogistics Marketingand Sales ServiceUpstream value activi ties Downstream value activities
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Concentration of World Manufacturing
80% of Global Output in Three Regions
How current are these data?
Current role of China?
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Global Distribution Manufacturing
Value Added
North
America
26%
Europe
33%
Japan
14%
China
11%
Other Asia
8%
Rest of World
8%
Source: Calculated from NationMaster.com
U.S. 22.4%
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Shares of Manufacturing Value Added
Source: World Bank World Development Indicators, 2011
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U.S. & Canadian
Manufacturing
Belt: Accounts
For about
Two-thirds ofTotal
Manufacturing
Employment in
The U.S. and
CanadaRise of
MaquiladorasBorder & interior
Mexico
A goodOverview
Of specialized
Versus market
Oriented
manufacturing
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Specialization in the Regional
Distribution of Manufacturing
Some cartograms where area isproportional to employment (using theBEA Economic Area classifications)
The first map shows the actual geometryof the BEA Economic Areas
The following maps depict industries
distributed broadly across the U.S., andindustries that are highly concentrated
These are old maps, but for many lines ofmanufacturing the data are probably
relevant
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BEA Economic Areas As of 1985
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Other Manufacturing Regions
Europe Figure 7.5, Japan - Figure 7.9
Globalization of manufacturing
movement of capacity from U.S. &
Canada, Europe, and Japan to less
developed countries
The new international division of labor
Anatomies of Job Loss
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U.S. Manufacturing Employment
Trend
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Change in U.S. Mfg.
Employment 1960-2000
Post-2000 Trends?
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Deindustrialization in
industrialized countries
The Share of Mfg. may have fallen, but real mfg.output is probably up in all these countries see next slide for WA state
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$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
1967 1972 1982 1987 1997 2002 2007
Output($1972inmillions)
Natural Resources
Food Products
Forest Products
Aerospace
Other Manufacturing
Construction
Transport,
Communications &Utilities
Trade
FIRE
Services
Real Output by Industry WA State
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Anatomies of Job-Loss:
disinvestmentBroadStructural
Trends CorporateAgency The outfallof restructuring SpatialoutcomesMacroscale
causal forces
in the global
economy
Corporate responses
to global trends
Corporate competitive
strategies
Plant openings
Plant closings
In-situ changesEvents
on the
groundBluestone & Harrison - Deindustrialization of America:
The core of B&Hs argument followed a restructuring approach
with the need to restore the drive to accumulate, producing,through spatially distributed effects, a major reworking of the
role of U.S. cities and regions in the geographic distribution
of production.
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Impacts on Manufacturing Jobs in
U.S., Europe and Japan
Job losses in manufacturing in all of theseregions
Replacement has primarily been in
services Occupations created in the services are
frequently very different than occupations
lost in manufacturing, leading to highunemployment rates and incomedeterioration
Assets of Centers of Control
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Assets of Centers of Control
versus Peripheral Regions
Centers of Control Key role in circulation;realizing wealth
Focal point for investment,profits, interest
Focus on forms of capital:FIRE
Occupational dominanceby professionals
Virtuous multiplier
relationships driven byabove points
Support networks of alarge cadre of serviceworkers in lower
occupational categories
Peripheral Regions Key role in creating valuethrough labor pools &resource endowment
Compete with centers for
capital Capital transfers to core;
possible scarcity in periphery
Multipliers chancy: impacts
only if investment comes tothem
Employment fortunesconditioned by waves of
investment and restructuring
No direct transference
Current Spatial Outcomes in the
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Current Spatial Outcomes in the
U.S.
Old centers are having their power erode New centers are rising, based on redistribution
Charlotte NC - banking
or the rise of new industrial spaces
- Orlando-Melbourne (retirement)
- Las Vegas (entertainment)
- Seattle & Atlanta - technology based
manufacturing & information services
The rural renaissance - retirement, footloose
entrepreneurs, recreation, rich people, niche mfg.,