🌍 Manufacturing and Related Service Industry: Study Notes (9696 Advanced Human Geography)

Hello Geographers! This chapter is all about where things are made and services are provided, and why those locations matter. It links directly to jobs, technology, and global trade. Don't worry if locational theories seem abstract—we’ll break them down using easy, real-world examples!

Key Takeaway: Manufacturing and services aren't just random. They locate where costs are minimised and profits are maximised. Understanding the *factors* is central to answering exam questions.

1. Factors Affecting the Location of Manufacturing and Services (Syllabus 11.3)

The location of an industry is rarely determined by a single factor. It’s usually a combination of forces. Think of this as a checklist businesses use before setting up a factory or office.

1.1 Core Locational Factors

a) Materials (Resources)
  • Key Concept: Industries that process bulky or heavy raw materials often locate close to the source to save on transport costs.
  • Weight-Losing Industries (Bulk-Reducing): If the final product weighs significantly less than the raw materials, locate near the resource.
    Example: Iron and steel production (iron ore, coal) or timber processing.
  • Weight-Gaining Industries (Bulk-Increasing): If the final product is heavier, bulkier, or more fragile than the materials, locate near the market.
    Example: Soft drinks bottling (water is added at the end) or car assembly (parts are assembled into a large vehicle).
b) Markets
  • Proximity to the consumer is crucial for:
    • Products that are perishable (like fresh bread or dairy).
    • Products that are bulky and expensive to ship long distances (like furniture).
    • Services that require immediate interaction (like banks, restaurants, or car repairs).
  • Access to a large, wealthy market is essential for high-tech or luxury goods.
c) Labour (Workforce)
  • Skilled Labour: Required for high-tech manufacturing, R&D, and advanced services (e.g., IT specialists, engineers). This often draws industries to university towns.
  • Cheap Labour: Required for labour-intensive manufacturing (e.g., textile assembly). This often drives industries to developing countries (LICs/MICs).
d) Transport
  • This is the cost of moving inputs (raw materials) and outputs (finished goods).
  • Firms seek locations with excellent infrastructure: highways, rail lines, ports, and airports.
  • Advances in containerisation have made many goods easier and cheaper to move globally, reducing the reliance on nearby materials (known as Friction of Distance reduction).

Memory Aid: Think of the classic geographical model: Alfred Weber's Industrial Location Theory focused heavily on minimising the combined costs of Materials, Markets, and Transport (M-M-T).

1.2 Supporting Locational Factors

e) Capital (Money)
  • Factories need investment. Firms prefer locations where banks are stable and willing to lend.
  • For high-tech firms, access to venture capital (funding for new, risky ideas) is important, often found in major financial hubs.
f) Technology
  • High-tech industries require specific infrastructure, such as reliable high-speed internet and research facilities.
  • The location of new technology often creates a cluster of related industries (see Agglomeration below).
g) Economies and Diseconomies of Scale
  • Economies of Scale: Cost advantages gained by increasing the size of production. If a factory is huge, it can buy materials in bulk, lowering the cost per unit. This encourages large-scale production in one place.
  • Diseconomies of Scale: Cost disadvantages from being too big or too centralised.
    Example: Congestion, high land prices, or difficulty managing a massive workforce. This encourages decentralisation (moving production away from the core).
h) Inertia
  • Sometimes, an industry stays in its original location even after the original reasons for choosing that spot have disappeared. This is called Inertia.
  • Why? The cost of moving (e.g., scrapping old buildings, training new staff) is too high.
    Example: Old steel mills remaining in areas like the Rust Belt (USA) long after local coal/ore supplies were exhausted.
i) Government Policies
  • Governments can override economic logic by offering incentives:
    • Tax breaks or subsidies to locate in specific areas (often disadvantaged regions).
    • Regulations (e.g., planning permission or environmental laws) that prohibit certain activities in certain areas.

Quick Review: Locational factors shift over time. Historically, materials and transport were most vital. Today, for high-value services, capital, technology, and skilled labour are often more critical.

2. Industrial Clustering and Special Zones (Syllabus 11.3)

Industries rarely exist in isolation. They often benefit from being close to other similar or related businesses. This is where clustering comes in.

2.1 Industrial Agglomeration

Agglomeration is the concentration of industries in one area, creating mutual benefits.

  • Benefits: Shared infrastructure (roads, power), shared labour pool (specialists are easy to hire), and access to functional linkages.
  • Functional Linkages: The connections and interdependencies between firms.
    Example: A major car manufacturer locates, and instantly, suppliers of seats, engine parts, and electronics locate nearby to feed into the main plant (just-in-time delivery).
  • Did you know? Agglomeration often leads to the growth of major industrial districts, like the concentration of finance firms in the City of London.

2.2 Industrial Estates and Export Processing Zones (EPZs)

These are planned industrial spaces designed by governments or private developers to attract investment.

Industrial Estate (IE)
  • A designated area specifically zoned for industrial use.
  • Offers ready-built infrastructure, reliable utilities, and transport links.
  • Goal: To promote manufacturing activity and employment locally.
Export Processing Zone (EPZ)
  • A special type of industrial estate, usually found in MICs or LICs.
  • Purpose: To attract Foreign Direct Investment (FDI) for goods destined for export.
  • Characteristics:
    • Exemption from tariffs (taxes on imports/exports).
    • Relaxed environmental and labour laws (sometimes controversially).
    • High-quality infrastructure (power, water, usually near a major port or airport).
  • Impact: Creates jobs but often involves low-wage, repetitive work (sweatshop labour). Goods assembled here contribute significantly to global supply chains.

3. The Informal Sector (Syllabus 11.3)

The formal economy includes all regulated, taxed, and officially recorded economic activities. The informal sector is the opposite—it is unregistered, untaxed, and often unregulated.

3.1 Causes of the Informal Sector

  • Rapid Urbanisation: Many people migrate from rural areas to cities (especially in LICs/MICs) but cannot find formal, well-paid jobs.
  • Poverty/Survival: People must create their own jobs to survive (often street vending or basic repair).
  • Lack of Regulation: The government lacks the capacity or political will to enforce taxes and laws on small enterprises.

3.2 Characteristics and Location

  • Characteristics:
    • Easy entry (low skill, low capital required).
    • Labour-intensive methods (using simple tools, not complex machinery).
    • Small-scale, often family-owned units.
    • Operates mainly on cash; no formal contracts or safety protection.
  • Location: Highly dispersed, but tends to concentrate in densely populated urban areas, such as crowded streets, markets, and marginal land near transport hubs.
    Example: Artisans repairing electronics or tailors operating from small roadside stalls in Nairobi or Mumbai.

3.3 Impacts of the Informal Sector

  • Positive Impacts:
    • Provides a vital economic safety net for the poorest.
    • Recycles waste materials (e.g., informal waste collectors).
    • Provides cheap goods and basic services to the urban poor.
  • Negative Impacts:
    • No contribution to government tax revenue (cannot fund public services).
    • Workers have no legal protection, minimum wage, or pension.
    • Often creates environmental degradation (uncontrolled dumping, air pollution from makeshift processes).
    • Can lead to congestion and illegal land use (squatter settlements).

4. Management of Change in Manufacturing Industry (Syllabus 11.4)

Manufacturing is not static; it is constantly changing due to globalisation, technology, and government influence. Governments use industrial policy to steer these changes.

4.1 Industrial Policy and Aims

An industrial policy is a set of government measures aimed at promoting the growth and competitiveness of specific sectors or regions.

  • Common Aims:
    • To promote high-value economic activities (e.g., shifting from textiles to aerospace).
    • To encourage regional development and reduce regional disparities (inequalities).
    • To increase employment and attract Foreign Direct Investment (FDI).
    • To ensure sustainability (e.g., promoting green manufacturing).

4.2 Changes in the Character, Location, and Organisation

When industrial policy is implemented, or when global economic forces change, the industry transforms:

a) Character of Manufacturing (What is produced?)
  • Shift to Post-Industrial Economy: Moving away from heavy, primary-resource-based manufacturing (e.g., coal, steel) towards light, high-tech, and service-based activities (e.g., pharmaceuticals, software design, R&D).
    Example: The UK's shift away from coal mining and shipbuilding post-1970s.
b) Location of Manufacturing (Where it is produced?)
  • Decentralisation: Factories move away from crowded, expensive central city cores to outer city fringes, industrial estates, or even offshore to other countries (outsourcing).
  • This movement is driven by the need for more land, lower labour costs, and better environmental regulations.
c) Organisation of Manufacturing (How it is produced?)
  • Lean Production/Just-In-Time (JIT): Minimising waste and inventory. This requires very efficient logistical and functional linkages.
  • Global Supply Chains: Production is fragmented across the globe (New International Division of Labour - NIDL).
    Example: Design done in USA, components sourced from China/Japan, assembly in Vietnam, and sales globally.

4.3 Case Study Preparation (Mandatory Requirement)

You must study the industrial policy of one country (e.g., China, Malaysia, South Korea, or a specific HIC) and evaluate its success. This requires you to focus on:

  1. The Policy: What specific initiatives did the government introduce (e.g., creating EPZs, investing in R&D, nationalising industries)?
  2. The Issues Faced: What problems was the country trying to solve? (e.g., high unemployment, reliance on low-value goods, regional inequality).
  3. Evaluation of Solutions: Did the policy succeed in changing the character, location, and organisation of manufacturing? What were the negative consequences (e.g., environmental cost, social inequality)?

Quick Tip for Case Studies: Use specific names! Don't just say 'a country in Asia'. Mentioning South Korea's policy of promoting Chaebols (large conglomerates like Samsung) in the 1970s and 80s shows excellent geographical knowledge.