Industrial and Economic Development: Location, Sectors, and Inequality
Core concepts
Classify economies by sectors: primary (extraction), secondary (manufacturing), tertiary (services), quaternary (knowledge), and quinary (high-level decision making). Rostow's stages and Wallerstein's world-systems (core, periphery, semiperiphery) explain development paths and inequality. Know Weber's least-cost theory: locate where total transport and labor costs are minimized, with bulk-gaining industries near markets and bulk-reducing industries near raw materials. Alfred Weber, Hotelling (locational interdependence), and Losch (profit maximization) are often compared. Understand agglomeration, economies of scale, footloose industries, and Maquiladoras/export processing zones. Measures of development include GDP/GNI per capita, HDI, GII, and the Human Development Index's three dimensions (health, education, income). Dependency theory and modernization theory are competing explanations; the demographic transition and gender inequality connect to development. Deindustrialization, outsourcing, and the new international division of labor describe shifts in manufacturing.
Traps and a worked example
Do not confuse GDP with GNI or HDI; do not assume all manufacturing is footloose; do not treat Rostow as universally accepted. Bulk-gaining vs. bulk-reducing is a classic trap.
Worked example: A soft-drink bottler adds water and syrup to concentrate, making the product heavier and bulkier-a bulk-gaining industry that locates near its market. A steel mill using heavy ore is bulk-reducing and locates near raw materials.