Location factors

Location factor Requirement Type of manufacturing industries strongly affected

(*what’s important to them)

Land Large area -Heavy industries

>to house bulky raw materials, machines and finished
products
*cheap extensive land(suburban/rural, coastal areas)
e.g. iron and steel industry

Capital easy access -Capital-intensive industries

to investors/ >require a huge sum* of capital
large amount -High-tech industries
of money

Labour plentiful -Labour-intensive industries

supply of >need a lot of workers*
cheap labour e.g. textile and garment industry
*large cities(in LDCs)

highly -High-tech industries

educated >to develop and make products
labour *professionals and technicians
e.g. IT industry
*large cities(in MDCs)/near universities

Raw materials close to the industries which:

source of -use heavy and bulky raw materials
raw >save transport costs
materials -use perishable raw materials
>process the raw materials before they turn bad
→→raw material-oriented industries

Market close to industries which:

market -make bulky products
>save transport costs
-make perishable products
>sell the products before they turn bad
→→market-oriented industries

Power cheap power -use a lot of power

supply →→power-oriented industries
*cheap and stable power supply

Government government can develop them by:

policy -financial incentives(e.g. low tax rates/subsidies)
-↑transport and telecommunications infrastructure

Transport -heavy industries

-raw material/market-oriented industries
Long questions
Besides lower costs in this country, give TWO more reasons to explain why this
company has shifted its manufacturing activities to this country.
Government policies – incentives such as low tax rate and land rents/prices/duty-free status
on imported materials are provided.
Rising markets in the LDCs – LDCs have become new markets for many industrial goods/
can respond to the market changes quickly/ produce goods that are suited to local tastes.
(due to large population and improving living standards)
Lower production costs(labour, land and transport) / Looser pollution controls / avoid tariffs
(TB p. 35//Attractions of the LDCs)
How do the advancements of transport and telecommunication facilitate the global
shift of manufacturing activities?(attract them to apply multi-point production)
transport: development of large vessels / bulk carriers
-lowers transport time/cost
-this weakens the location ties of raw materials / market
telecommunication: advancements of information and communication
technology/widespread use of internet/quick flow of information
(TB p. 37//Improvements in transport and telecommunications)
What are the other characteristics of the transnational corporations?
-large-scale production / buy in bulk/ enjoy economies of scale
-widespread network covering the world
-strong bargaining power → can access the cheapest suppliers
-strong bargaining power on where to locate their factories/easily relocate any manufacturing
activity to any part of the world to get the highest profits/enjoys maximum freedom in the
choice of location across the world
(TB p. 37//Transnational corporations *handwritten notes in checkpoint 9)
List FOUR pull factors in Zhujiang Delta Region(ZDR) that the soya milk drink
company considered when it relocated the production plant there in the early 1990s.
ZDR – lower wages and rents /looser controls on pollution/open policy to provide incentives
(lower taxes)/ near Hong Kong/Hong Kong manufacturing know the place better
(TB p. 20//Relocation of the manufacturing industry since the 1980s *pull & push factors)
Explain how the development of the M4 Corridor meets the principles of sustainable
industrial development.
Economic aspect: a cluster of high-tech / high value-added industries more jobs and income/
promotes economic development.
Environmental aspect: high-tech industries are usually less-polluting, less waste produced,
environmentally-friendly and they can promote environmental conservation.
Social aspect: enhance the skills of labour force/have a pleasant working environment.
(TB p. 52, 57//Sustainable industrial development in home/host areas)
Unit 2–manufacturing industries(HK→ZDR)
Types of manufacturing industries in HK(1970s): (for export)
garments>textiles>plastic toys
Reasons for the flourishing [rapid development]:
#HK(1970s) is a major global light industrial area.
-Influx of capital and talents: industrialists (1950s, Mainland→HK)
They brought along capital and management skills
-Cheap labour: migrants (Mainland→HK) → ↑cheap labour→labour-intensive industries
-Deep natural harbour and the free port policy: Victoria Harbour
Distribution of industrial areas
1950-60s: industries found in old urban areas
(San Po Kong, Kwun Tong, Quarry Bay, Tsuen Wan) flatted factories
1970s: moved to newly developed new towns(cheaper and extensive land)
(Fanling, Sha Tin, Tai Po, Yuen Long, Tuen Mun)
–reasons: lower land rent & larger factories & well-developed infrastructure
#industrial estate(now): Tai Po, Yuen Long, Tseung Kwan O
Difficulties faced
Labour costs & land rents↑↑ + stricter pollution controls → ↑ production costs
#HK focused on labour-intensive industries(i.e. garment) → ↑influence
Solution: industrial relocation(since 1980s)
Moved to South-east Asian countries, e.g. Indonesia & Malaysia(lower costs)/
Moved to Zhujiang Delta Region(ZDR)
#open policy(economic reform) by Mainland(1978): open to foreign investment
Pull factors of the ZDR:
1. Lower wages (labour costs)
2. Lower land rents
3. Looser pollution controls
4. Financial incentives, e.g. low tax rates
5. Near HK
6. Industrialists from HK know the place well
Push factors of HK:
1. Higher wages (labour costs)
2. Higher land rents
3. Stricter pollution controls
Solution: change the mode of production
Before 1980s: all manufacturing activities at the same place→single-point production
Since 1980s: factories(production)→ZDR // headquarters(administration)in HK
→multi-point production
Why do the headquarters remain in HK?
● Well-developed transport network & telecommunications infrastructure
● High-quality labour(managers, accountants) ←high education levels
● Good legal & financial systems
#provincial government of Guangdong→favouring clean and high-tech industries(high
value-added) in the ZDR.//refer to the map – TB p.24
Unit 3–shift in manufacturing activity(other place)
Distribution of major industrial regions
Four major industrial regions(country):
● Western Europe (UK/Germany)
● Eastern Europe (Russia)
● East Asia (China/Japan)
● Eastern North America (USA)
Favourable location factors
● Easy access to the sources (raw materials & power resources)
● Well-developed transport networks
● Large cities nearby→markets, technology, capital, labour)
Great Lakes Region
Conclusion(location factor) Evidence Explanation

Raw materials Iron ore(Lake Superior & Iron ore is important to

Lake Huron) heavy industries

Power resources Coalfields(east of Pittsburgh) Coal→cheap→widely used

Abundant labour supply Large cities(Toronto) Large pool of workers

Markets Large markets for goods

Efficient transport networks Highway network Facilitates the transport of

raw materials & finished
products

lakes/river/canal network Cost of water transport↓

(inland→Atlantic Ocean) →heavy & bulky goods can
be transported at ↓ cost
#refer to the map and table (TB p.30-31)
Global shift (MDC→LDC)
Attractions of the LDCs:
● Lower production costs (labour & land)
● Looser pollution controls
● Financial incentives ([Link] tax rates, duty-free status, etc.)
● Large demand for goods–large production & improving living standards (rising
market) //by setting up factories there→respond to the local markets & tastes quickly
→helps expand their markets & ↓transport costs
Facilitating factors
Multi-point production adopted by transnational corporations (TNCs)
-locate their manufacturing activities in two or more countries
-usually low-tech production processes(simple processing & assembly)are located in LDCs
→there are abundant supply of cheap semi-skilled labour
-processes which require high technological and skill levels(R&D, product design high-tech
production processes) + headquarters → kept in MDCs
→there are skilled labour, scientists and management talents
-enjoy economies of scale through mass production(buy raw materials and parts in bulk)
-led to globalisation in production→ ↑interdependency of the world
#refer to TB p.37 – checkpoint 9
Improvements in transport & telecommunications
-transport time & costs ↓↓ (transport)
● Container ships & large airplanes→ ↓per unit transport costs
● Better refrigeration tech. → perishable goods can be transported easily
-information flows quickly around the world (telecommunication)
→ headquarters can manage their overseas branches easily
Unit 4–pros and cons of the global shift
Impact on the host countries/areas
Benefits: cycle of economic growth
New industries set up ⇒ ↑jobs & income ⇒ ↑people living there ⇒ ↑local economy/
production tech. & management skills are transferred to there(↑productivity)
⇒ ↑government tax income→improve the infrastructure & social facilities ⇒ ↑investment
#refer to TB p.44 figure 2
Problems
-Loss of farmland & natural areas:
Farmland & natural areas → industrial land use → hinders agricultural development
↓place for leisure activities → ↓quality of living +
threaten wildlife habitats → harm the ecosystem
-Pollution problems:
Factories emit air pollutants & discharge sewage + lack effective laws(LDCs)
→ harm human health [Link] diseases
→ ↑government's burden on public medical system + costly to clean up the environment
Impact on the home countries/areas
Problems
-Unemployment & social problems
↓manufacturing jobs → widespread unemployment ([Link] abuse, etc.) ↴
→ ↑government’s burden on providing unemployment benefits → social problems
-Economic decline (vicious circle)
Factories closed down ⇒ ↓manufacturing jobs ⇒ people move away
⇒ ↓money is spent in local shops & services(local econ. ↓)
⇒ ↓government tax income ⇒ infrastructure & social facilities lack maintenance
⇒ #become worn down & urban decay occurs ⇒ ↓investment
#refer to TB p.47 figure 7 – vicious circle of economic decline
Benefits
-Upgrading of the economic structure
Converted to develop econ. act. which generate ↑ profits([Link] industry)
↳ focusing on the high-tech industry
Productivity of the labour force ↑ → ↑people’s living standards
-Improvements in environmental quality
↓industries → ↓pollution
-Cheaper goods
People there can buy cheaper imported goods → ↓ costs of living there
Unit 5–sustainable development
Sustainable industrial development
-environmental conservation & social progress
Major principles:
Economic growth:
- provide job & income to a community continuously
Goal:
- Stable development of local economy
Environmental conservation:
- Use ↓ resources
- Provide ↓ pollutants/↓ waste during production
Goal:
- Minimize environmental problems caused by the manufacturing industry
Social progress:
- Provide opportunities to different social groups
- Share the benefits of industrial development
Goal:
- Everyone has a chance to take part in & enjoy a fair share from industrial de.
- ↑ the quality of living
How can host countries/areas achieve?

Principle

Measure Economic growth Environment Social progress

conservation

Force polluting The cleaner Ease pollution Cleaner environment

industries to move environment problems → ↑ quality of living
out → ↑image of the

Pass pollution region →

control laws ↑investment

Build sewage
treatment works

Develop high-tech - ↑jobs high-tech/tertiary -Cleaner environment

industries - high-tech industries → → ↑ quality of living
industries → ↑profits cleaner - ↑education levels of
the labour force

Provide training to ↑productivity of - ↑skill levels

factory workers to labour force - provide opportunities
work in high-tech → ↑ profits - workers can earn
/tertiary industries ↑income

Provide incentives ↑productivity →more ↓pollution Cleaner environment

competitive → → ↑ quality of living
↑profits
#refer to TB p.54//Sustainability of the measures adopted in the ZDR
How can home countries/areas achieve?
1. Provide incentives → attract new investment in the new industry, [Link] reduction
2. Redevelop the old industrial into high-tech car-making centres with a pleasant
environment
3. Re-train workers → help them cope with technological changes
4. Invest ↑ in R&D on production tech.
5. ↑ infrastructure
Sustainability of developing the manufacturing industry in a high-tech direction

Economic growth Environmental conservation Social progress

- ↑ productivity High-tech production - ↑ skill & education

- ↑ prices of the methods are usually cleaner levels of the labour
products force
- ↑ opportunities to the
workers in the
course of econ. de.
- Cleaner envir.
→ ↑ quality of living
#refer to TB p.57-58//Sustainability of developing the manufacturing industry in a high-tech
direction & unit summary table 3

#remarks