GGR124H1 Lecture Notes - Microsoft Powerpoint, Location Theory

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10 Feb 2013
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Lecture 4
Cities as Centres of Production
Cities as Centres of Manufacturing and Service Delivery
Why is here a functional specialization among cities (especially
manufacturing activity)?
o Some towns/cities are considered one specific production, ex. coal ,
steel production , technology Centres (kitchen, waterloo based on
blackberry being a key producer in the area)
Why are larger cities more economically diversified than smaller cities?
o Look at the type of jobs
Why do some cities have concentrations of corporate head quarters while
others do not?
o Headquarter functions, tend to be the main decision making sections,
where they are made are where the higher intellectual individuals
there. Those people will have higher incomes
Cities as Centres of Manufacturing
Manufacturing is one of the most important components of urban growth
o Producer services they specialize in one thing they provide. Ex.
financial services to support manufacturing
o Major job loss is in where the assembly takes lace
o You still need the services that look at the economical conditions to
help the manufacturing companies
Helps Explain
o Development of the urban system ex is the automobile were to move
south or just go back to japan then there will be drastic conditions on
o The emergence of large industrial metropolises
o Specialization of cites in particular industries
o Difference in rates of growth, due to that specialization. Ex, if cities
that specialize in steel grow faster than another specialization
Components of types of goods
o Durable goods not used up in the production process, have a
significant amount of value added to the city. Ex. machinery,
o Non-durable goods ex. Processing of iron ore, because u use up most
of the iron ore to produce the steel
Value Added
o High value added (technology, electronics, etc.) cities tend to be
o Low value added (textiles, furniture, etc.)
Stage in the production process
o Processing of raw material
o Fabrication of parts
o Assembly / integration of parts in to, finished product
Manufacturing Locations
Alfred Weber’s location theory
o Developed in early 1990s
o “Least Cost” theory of manufacturing location – firms make decisions
on how much it costs to transport the material to manufacture and the
cost of transportation of the product to the market
Firms dependent on inputs found everywhere would locate closer to their
market i.e. Market orientated
Those dependent on specific raw materials would locate close to them i.e.
Material orientated
Ultimately, firms would seek the least-cost locations
But model is “idealized” or “simplistic”
o Only variable is the transportation cost, their ignoring: electricity, raw
good cost, labour cost
Characteristics of Global Economic System
o Single world market with production for exchange
o Special division in organizations of the system
o Existence of a defined Core and Periphery core where the research
and development occurs, Periphery where its manufactured
o Cycles of growth across the system globally
o Importance of local economic actors
Change from post-war period of Fordism to a period of Post-Fordism or
Flexibility Henry fords cars
(table posted in the power point )
Manufacturing Location Change
Production linkages have undergone technological and organizational change
Major Changes Include:
o Emergence of flexible production systems
o Firms are more technology oriented
o Flexible labour - not only the functions that people play, able to do a
variety of tasks
o Continuous innovation
Specialized industrial networks
o Industrial districts/ science parks anchor of economic wealth for the
Just-in-time delivery systems
o Supplies delivered in small quantities on schedule.
o Proximity to transportation networks is important, that’s why the
firms are closer to the highway.
o Don’t need the same footprint as you needed in the past , because you
don’t require any factories to store products
R&D (research and development) and HQ facilities in metropolitan areas
o Skilled labour/ “Creative Class”
o Cities highly tolerant very multicultural , sexuality , high levels of
acceptance, have high levels of innovations and creativity- music, art