GEOG2205 Lecture Notes - Lecture 3: Bretton Woods System, Sunk Costs, Global City
Week 3
Rebecca Myers
Week 3- Global Production Systems
In the Fordist period, global production systems were characterised by:
• Spatial proximity
• Co-location of management, resources, capital investment and labour
• Chandlers three pillars co-located: Management, production, marketing
Shifts in global chains
• Crisis of Fordism
• Excess capacity in consumer and other markets
• Collapse of Bretton Woods Agreement
• 1973 Oil Shock
• Economic recession
• Other pressures
• High labour costs
• High taxes
• State regulatory regimes
Changing geography of supply chains
• Improve transport & communications tech from 1950s
• Facilitated separation of Chandlers three pillars: management, and production in particular
• Increase ability to maintain central control, but decentralised production
• Emergence of transnational corporations 1950s onwards
→Resulted in:
Flexible specialisation
• Reduced focus on standardised mass production
• Increased focus on short run products and differentiation
• Focus on higher value niche markets
• This resulted due to meet ever-changing consumer demands for non-standardised
products.
• Growth of a production system organised around clusters of small firms, who are seen
as the best providers of goods to rapidly changing market demands.
• Shifts in geography of production, distribution and exchange
New International division of labour
• Disaggregation of Chandlers 3 Pillars (design, management and production no longer co-
located)
o Management and design tend to remain centralised in old industrial core
o Production functions are highly disaggregated , across low wage regions
• Eergee of gloal produtio etorks (gloal alue hais, gloal oodity
chains). Basically, pulling pieces of the product from where they are best able to be
produced.
Footloose capital
• Decentralisation of production has been accompanied by an increasing mobility of
capital
• No longer are sunk costs a barrier to relocation
• Increasingly manufacturing is mobile, seeks location of greatest benefit (sometimes
labour cost, sometimes not)
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
In the fordist period, global production systems were characterised by: Spatial proximity: co-location of management, resources, capital investment and labour, chandlers three pillars co-located: management, production, marketing. Shifts in global chains: crisis of fordism, excess capacity in consumer and other markets, collapse of bretton woods agreement, 1973 oil shock, economic recession, other pressures, high labour costs, high taxes. Facilitated separation of chandlers three pillars: management, and production in particular. Increase ability to maintain central control, but decentralised production: emergence of transnational corporations 1950s onwards. Flexible specialisation: reduced focus on standardised mass production, this resulted due to meet ever-changing consumer demands for non-standardised. Increased focus on short run products and differentiation. Focus on higher value niche markets products: growth of a production system organised around clusters of small firms, who are seen as the best providers of goods to rapidly changing market demands. Shifts in geography of production, distribution and exchange.
