All industries can be thought of as a system of inputs, processes, outputs and feedback.
Inputs are the things that go into the system. The main three inputs are:
1. Physical inputs -These include sun, soil and water in primary industries and raw materials such as cotton, metal or oil in secondary industries.
2. Labour – either skilled or unskilled.
3. Capital -This is the money invested in the business to pay for raw materials, staff, machinery and the buildings used for production and storage.
Processes are all the things that happen to those inputs to help turn them into outputs. These include:
a) Production – for example the manufacturing of cars, or the sewing of textiles.
b) Factory maintenance, which is necessary to keep machines in working order.
c) Packaging which protects products during transit and presents them in a way that makes customers want to buy them.
d) Transport, which is needed to move products from the factory to the warehouse and then on to the shops.
Outputs are the finished products, together with profits and wages.
Feedback includes anything that refines or improves the system, such as:
a) Customer feedback. Companies find out what consumers think of their products through market research. They may alter or adapt their range according to feedback to sell more products and maximise profits.
b) A profit is the money left over after inputs (staff wages, raw materials, machinery and buildings) have been paid for. Profits need to be high enough to make it worthwhile for the company to continue investing in making the product. If profits fall too low, the company will need to change the inputs, process or outputs to improve profit or diversify into other products. If they do not they will go bust.
Primary industries involves collecting raw materials, e.g farming, fishing, mining and forestry.
Secondary industries are those which take the raw materials produced by the primary sector and process them into manufactured goods and products.
Examples of secondary industries include heavy manufacturing, light manufacturing, food processing, oil refining and energy production.
The tertiary sector is also called the service sector and involves the selling of services and skills. They can also involve selling goods and products from primary and secondary industries.
Examples of tertiary employment include the health service, transportation, education, entertainment, tourism, finance, sales and retail.
The quaternary sector consists of those industries providing information services, such as computing, ICT (information and communication technologies), consultancy (offering advice to businesses) and R&D (research, particularly in scientific fields).
The quaternary sector is sometimes included with the tertiary sector, as they are both service sectors. The tertiary and quaternary sectors make up the largest part of the UK economy, employing 76% of the workforce.
The employment structure of a country shows how the labour force is divided between the primary, secondary and tertiary sectors. Different countries have different employment structures. The employment structure of a given country can tell you quite a lot about that country’s economy.
In the richest countries, for example, there will usually be more people working in the tertiary/quaternary sector than in the primary and secondary sectors. In the poorest countries, there tend to be more people working in the primary sector than in either the secondary or tertiary sectors.
Refer to the above diagram 1 of Pie chart of Industry structures. What you can tell about the industry structures according to the development of the countries.
INDUSTRIAL LOCATIONAL FACTORS
Different industries require different inputs. Industries are more likely to locate where these inputs are readily and cheaply available. Factors that influence where an industry locates include:
1. Power supply
2. Communications – including transport, telecommunications.
3. Labour supply – including workers with the right skills.
4. Access to market – where the goods are sold.
5. Grants and financial incentives – usually from governments.
6. Raw materials
9. Availability of land
10. Technology and Research
NEWLY INDUSTRIALISED COUNTRIES (NIC)
Newly industrialized countries are members of a socioeconomic classification given to locations that have recently experienced an economic shift towards stability and industry.
The term newly industrialized countries originally applied to four emerging Asian countries: Hong Kong, Taiwan, South Korea and Singapore.
1. Can you name other NICs countries in diagram 2?
2. In which region, most of NICs countries are located?
THE FEATURES/ CHARACTERISTICS OF NICs Countries
NICs usually share some other common features, including:
a) Increased social freedoms and civil rights.
b) Strong political leaders.
c) A switch from agricultural to industrial economies, especially in the manufacturing sector.
d) An increasingly open-market economy, allowing free trade with other nations in the world.
e) Large national corporations operating in several continents.
f) Strong capital investment from foreign countries.
g) Political leadership in their area of influence.
h) Lowered poverty rates.
HIGH TECH INDUSTRIES / CAPITAL INTENSIVE INDUSTRIES
High tech is technology that is at the cutting edge: the most advanced technology currently available. It is often used in reference to micro-electronics, rather than other technologies.
HIGH TECHNOLOGY SECTORS
The sector approach classifies industries according their technology intensity, product approach according to finished products.
b) Artificial Intelligence
d) Computer Software
e) Electrical Engineering
h) Nuclear Physics
MULTINATIONAL COMPANIES (MNCs) /TRANSNATIONAL COMPANIES (TNCs)
Transnational Companies (MNCs) are large business organizations that have set up offices, factories and branches in many countries.
Mazda, Microsoft, Mitsubishi and Motorola are all examples of MNCs.The Transnational Companies are able to locate their activities in other activities in other countries because they have the capital and the administrative ability to control their extensive businesses. Due to rising labour costs in their own countries, MNCs seeks locations that can supply them with abundant cheaper labour to maximise profits.
THE ADVANTAGES AND DISADVANTAGES OF MULTINATIONAL COMPANIES/TRANSNATIONAL COMPANIES