The Management of Change in Manufacturing Industry (9696 Advanced Human Geography)
Hello Geographers! Welcome to one of the most dynamic and relevant sections of the course: understanding how the manufacturing world is constantly changing and, crucially, how governments try to manage that change. Manufacturing isn't static; it’s always moving, modernising, and relocating. This topic requires you to understand these shifts and then apply that knowledge to a real-world country through a case study. Don't worry if this seems tricky at first—we will break it down into the 'what,' 'where,' and 'how' of industrial change!
Why is Managing Change Necessary?
Manufacturing is the secondary sector of the economy (turning raw materials into goods). Over the last few decades, this sector has undergone massive change globally. Governments need to manage this because change often brings winners and losers (e.g., new jobs in one region, mass unemployment in another).
The main drivers of change are:
1. Globalisation: The world is more connected. Transnational Corporations (TNCs) can move production easily to countries with cheaper labour or better access to markets (this links directly to the concept of the New International Division of Labour (NIDL)).
2. Technological Advancements: Automation (robots) and advanced communication mean factories need fewer workers and can be managed from far away.
3. Changing Consumer Demand: Demand shifts from basic, mass-produced goods to specialised, high-value, high-tech products (like customised electronics or specialised medical devices).
Quick Review: Change is driven by TNCs seeking profit, robots replacing people, and customers wanting newer, better products.
The Three Dimensions of Industrial Change
When studying management policies, you must analyse how they affect three key characteristics of manufacturing. Think of the mnemonic C.L.O. to remember these three areas:
C: Character (What is produced?)
L: Location (Where is it produced?)
O: Organisation (How is it produced?)
1. Change in Character (What is Produced?)
This refers to the shift in the *type* of industry dominating a country or region.
The Shift: Moving away from traditional/heavy industry towards modern/high-tech industry.
Traditional Industries:
• Characteristics: Often resource-intensive (needs coal, iron ore), bulky materials, polluting (e.g., steel production, shipbuilding, textiles).
• Location Needs: Near raw materials or ports.
Modern/High-Tech Industries (Quaternary/Quinary links):
• Characteristics: Needs skilled labour, proximity to universities (R&D), clean environments, focuses on electronics, pharmaceuticals, and software.
• Location Needs: Footloose (not tied to specific raw materials), often near major airports or in dedicated industrial parks (science parks).
Example: The UK experienced massive deindustrialisation from the 1970s onwards, losing traditional industries in the North (like coal mining and heavy engineering) and seeing growth in high-value services and high-tech manufacturing in the South East (like aerospace in Bristol).
2. Change in Location (Where is Production Happening?)
The geographical spread of manufacturing changes due to economic pressures and government incentives.
A. Global Relocation (The Big Picture):
• Out of HICs: Manufacturing shifts from High Income Countries (HICs) like the US and UK to Low and Middle Income Countries (LICs/MICs) like China, Vietnam, and Mexico.
• Reason: Lower labour costs, fewer environmental regulations, and government incentives in the receiving countries.
B. Intra-National Relocation (Within a Country):
• From Inner City to Edge of City/Rural Areas: Older factories relied on canals, rail heads, and city labour. Modern factories need large, cheap land for horizontal production lines and good road access (motorways).
• Agglomeration: New industries often cluster together (e.g., *Silicon Valley, USA* or *Science Parks*) to share ideas, resources, and skilled workers.
Memory Aid: If the industry is heavy (Character), it needs to be near materials (Location). If the industry is light/high-tech (Character), it chooses locations based on skill and access (Location).
3. Change in Organisation (How is the Work Done?)
This focuses on the structure of firms and the production methods used.
Shift 1: TNC Dominance
• TNCs now control huge global supply chains, deciding which country performs which stage of production. This leads to fragmentation of the manufacturing process.
Shift 2: Lean Production & JIT
• Lean Production: Aiming for maximum efficiency with minimum waste.
• Just-in-Time (JIT): Components arrive at the factory *just* when they are needed for assembly, reducing storage costs. (Analogy: Waiting until the pizza dough is ready before ordering the toppings, not storing all toppings for months!)
Shift 3: Increased Linkages
• Functional Linkages: Companies rely heavily on specialized suppliers and service providers (subsystems) rather than doing everything themselves.
Key Takeaway: Modern manufacturing is characterized by TNCs, speed (JIT), and reliance on networks and specialized external firms.
The Role of Industrial Policy (Management)
Industrial Policy is the set of official strategies implemented by a government to encourage the establishment, growth, and modernisation of the country’s manufacturing sector.
Goals of Industrial Policy
The policies usually aim to achieve:
1. Economic Growth: Boosting exports and Gross Domestic Product (GDP).
2. Employment: Creating jobs, especially higher-skilled jobs.
3. Regional Balance: Directing investment to depressed or underdeveloped regions (e.g., former industrial heartlands).
4. Environmental Sustainability: Encouraging 'greener' manufacturing processes.
Policy Toolkit: Types of Intervention
A. Direct Financial and Regulatory Policies (Carrots and Sticks)
These policies directly influence a company's financial decisions:
• Tax Incentives: Offering reduced corporation tax or income tax to companies that set up in specific areas (e.g., South Korea used tax holidays to attract foreign investment in the 1970s and 80s).
• Subsidies and Grants: Direct payments to cover initial setup costs or research and development (R&D).
• Infrastructure Provision: Creating dedicated zones, such as Export Processing Zones (EPZs) or Free Trade Zones (FTZs), which offer low rent, reliable power, and good transport links (e.g., EPZs near port cities in Vietnam or Bangladesh).
• Regulation: Policies that prevent companies from polluting or mandate local content (e.g., forcing TNCs to use a certain percentage of locally sourced materials).
B. Indirect Policies (Long-term Investment)
These policies aim to improve the general business environment:
• Education and Training: Investing in technical colleges and universities to create a highly skilled workforce ready for high-tech industries.
• R&D Investment: Funding research in key national sectors (e.g., robotics, biotechnology).
• Trade Agreements: Negotiating access to international markets to boost export opportunities.
Did you know? An EPZ is like a special industrial park where the government removes barriers like customs duties and offers excellent infrastructure, making it very attractive for foreign TNCs to build factories there.
Case Study: Issues, Solutions, and Evaluation
The syllabus requires a case study of one country's industrial policy. You must show the issues, the solutions, and evaluate their success. This framework is essential for essay writing.
Step 1: Identify the Issues Faced
What specific problems was the country facing when the policy was implemented? (Always link back to Character, Location, and Organisation.)
1. Regional Disparity: Economic activity concentrated in the core region, leaving the periphery regions underdeveloped or deindustrialised.
2. Unemployment/Skills Gap: Job losses in old, heavy industry, or a lack of workers skilled in new technologies.
3. Low Value Exports: Relying heavily on cheap, bulk goods rather than high-profit, specialised items.
4. Environmental Costs: High levels of pollution and degradation caused by unregulated growth.
Step 2: Describe the Attempted Solutions
How did the industrial policy address the issues? (Focus on specific policy types from the toolkit above.)
• Solution for Regional Disparity: Introduced *Regional Selective Assistance* (grants/subsidies targeted only at peripheral areas).
• Solution for Low Value Exports: Shifted policy focus from attracting cheap assembly plants (low-skill Character) to R&D centres (high-skill Character) through specific tax breaks for innovation.
• Solution for Skills Gap: Created new technical vocational training institutes (Indirect Policy) to retrain redundant workers.
Step 3: Evaluate the Success and Failure
Evaluation (AO4 skill) means judging *how far* the attempted solutions worked and considering the unintended consequences.
A. Successes (Positive Impacts)
• Economic: Significant increase in FDI; diversification of exports into higher value goods (Character change).
• Social: Creation of thousands of new jobs; reduction in regional unemployment.
• Spatial: Successful decentralisation of industry away from the congested core (Location change).
B. Failures and Unintended Consequences (Negative Impacts)
• Social Issues: New jobs might be low-paid/insecure; increased cost of living in successful industrial areas.
• Environmental Trade-offs: While economic growth was achieved, it often came at the cost of air and water pollution, especially in new industrial zones (the classic conflict between economic development and environmental protection).
• Inertia vs. Movement: Old industrial towns often suffer from industrial inertia (the existing infrastructure makes it hard to move), but the new policies favor fresh, undeveloped land, increasing the divide between old and new industrial regions.
Key Takeaway for Case Studies: Remember that no policy is perfectly successful. Always include an evaluation that weighs up the positive economic outcomes against the social and environmental challenges that remain.
Final Quick Review Box
Management of Change in Manufacturing
• Core Requirement: Study one country's Industrial Policy, focusing on Character, Location, and Organisation changes.
• Mnemonic: C.L.O. (Character, Location, Organisation).
• Key Policy Tools: EPZs (Direct), Tax Breaks (Direct), R&D Funding (Indirect), Training (Indirect).
• Key Evaluation Point: Did the policy solve the problem? What were the *costs* (environmental, social, regional inequality)?
Keep practicing your case study application! You’ve got this!