Transformation of the Economic Landscape (College Board AP® Human Geography)
Study Guide
Written by: Kristin Tassin
Reviewed by: Bridgette Barrett
Changes in Production Methods
As a result of globalization, a new international division of labor has taken effect
There has been a shift of manufacturing industries from more developed countries (MDCs) to less developed countries (LDCs)
This is because developing countries produce items at a lower cost, largely due to reduced labor costs, compared to developed countries
As a result, MDCs have shifted to service and technology sector economies, moving away from traditional manufacturing
Globally, production methods are increasingly mechanized, where human labor is replaced by machine production
This shift tends to:
decrease costs
increase efficiency
increase productivity
Examiner Tips and Tricks
At least one of the free-response questions on the AP Exam will assess your ability to analyze data across geographic scales. For example, you will need to understand how data at a smaller scale, such as national or regional, will mask data at a larger scale, such as local or subnational. For example, data on industrial production at the national scale produces a map like this:
Image: Countries by industrial output
However, this map obscures data at different scales. A common prompt might be “Explain the limitation of the map for identifying areas of industrial production.” This prompt would require you to explain that, while an entire country might produce a lot of industrial goods, various locations within that country might produce very little or none. For example, though the United States has high industrial production, cities like New York and San Francisco focus on the service economy rather than industry. Similarly, rural areas are used for agriculture rather than industry. This shows how industrial production would be mapped differently at different scales.
Global supply chains
Global supply chains involve the production processes being spread across multiple countries, with different countries specializing in different stages of production
Companies source raw materials and labor from different countries to reduce costs
For example, a country might import raw materials from one country to a second country for production because of cheaper labor costs
These types of supply chain are vulnerable to disruptions from climate, natural disasters, and pandemics that can affect transportation or production in any part of the chain
Just-in-time delivery
Just-in-time delivery is a manufacturing strategy where companies receive raw materials or goods only when they are needed in the production process
This reduces inventory costs, as excess products do not need to be stored
Just-in-time delivery increases efficiency and company profits due to lower operating costs
Just-in-time delivery makes production and sales vulnerable to delays or disruption in the supply chain
It is also heavily dependent on efficient and reliable transportation and communication
Fordism
Fordism refers to the form of mass production introduced by Henry Ford in the 20th century, where each worker is given one specific task to perform repeatedly, rather than being responsible for a whole, finished product
This system relies on assembly lines and is designed for producing large quantities of standardized products
Post-Fordist production relies on automation to produce cheaper goods more efficiently
It’s a more flexible form of production, where machines produce goods efficiently at a lower cost
It can adapt to changing customer needs
Economies of Scale in Production
Economies of scale seek to increase production and lower costs
Economies of scale result in increased efficiency of production as the number of goods being produced increases
The costs of production are divided by a larger number of units, which decreases the cost per unit
For example, if a company is already paying for factory space, electricity, and labor, then making 1000 shirts is more cost-effective than making 100 shirts. The main costs of production are spread over more shirt units, making each unit cost less to produce
This increases the company’s profits
Multiplier Effect
The multiplier effect refers to the additional economic opportunities generated by a business
A corporation establishing in a new location creates new opportunities
Coffee shops and lunch places may begin to open up to accommodate the new corporate business and the increased number of workers in the area
Similarly, if a sports stadium opens in a new city then hotels, restaurants, and shopping districts may be built nearby to take advantage of increased tourist traffic
Agglomeration
Agglomeration refers to the clustering of similar industries in the same location
This occurs so that businesses can take advantage of a shared labor pool and shared costs for infrastructure
For example, multiple technology companies are headquartered in Silicon Valley
This allows the companies to:
share ideas
split infrastructure costs
hire from an experienced labor pool
Agglomeration affects the economic landscape by concentrating types of economic activity in specific geographical areas. These economic clusters become hubs of economic activity in a region
The close proximity of similar businesses allows for the creation of economies of scale
Businesses or factories that are similar and in close proximity to one another can share infrastructure, suppliers, services, and an educated labor pool
This reduces production costs and increases profits
In addition, geographic proximity leads to the sharing of ideas and technological innovations
Regions often develop specialization in a particular industry
For example, Detroit was well-known for automobile production, New York is associated with finance, and Los Angeles is a hub for the movie industry
Agglomeration often leads to increased investment in and development of transportation networks, communication technologies, and utilities
High-Technology Industries
Industries focused on the production of technology products contribute significantly to global trade
High-technology industries create high-paying jobs and encourage urbanization around tech hubs
They also contribute to increased demand in supporting industries, such as research, education, and logistics, due to the multiplier effect
MDCs dominate high-technology production, due to:
strong infrastructure and communication systems
high educational levels
government investment in research and development
Countries in the semiperiphery, such as China and India, are increasingly participating in high-technology production
Growth Poles
A growth pole is an area which experiences strong economic growth due to the development of key industries or sectors and then stimulates economic development in nearby areas
Growth poles lead to the creation of jobs, infrastructure, and increased demand for goods and services in nearby areas
Silicon Valley in California is a technology hub, home to many of the world’s largest tech companies
The Research Triangle in North Carolina is known for research institutions, particularly in the fields of biotechnology, healthcare, and I.T. and has attracted a highly skilled workforce to the area
Worked Example
Different areas of the United States are known for highly-specialized economic activities. For example, Silicon Valley is home to many tech companies.
A. Explain how each of the following factors contributes to the rise of such regions.
Investment capital
Labor
Government
Answer
Investment capital is necessary to start a business. It is more likely that people will have money to invest in a wealthy, urban area than in an underdeveloped or rural one.
A labor pool that already has highly-skilled workers, particularly if they have experience in the technology sector, will be more appealing to a new business.
The local or state government can give businesses incentives to open in their areas. They may be given tax breaks, provide infrastructure, or offer research funding, for example.
B. Define agglomeration and explain how it operates in the expansion of such economically specialized regions.
Answer
Agglomeration refers to the practice of similar businesses clustering near one another in one area. This creates economically specialized areas, as companies engaged in the same or similar types of business occupy one area. This is a result of sharing infrastructure and inputs, desire for an experienced labor pool, and proximity to shared resources.
C. Define a growth pole and explain how Silicon Valley functions as one.
Answer
Growth poles are areas of economic development that spur increased economic development in the surrounding area. Silicon Valley functions as a growth pole because it increases the development of secondary companies that supply inputs as well as companies that use technology. It also leads to the growth of local educational institutions, retail, and housing development.
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