Absolute advantage - a country has absolute advantage in international trade over other producers if it is the most efficient producer of that product. That means the country can achieve more output of that product from any given amount of resource inputs than any other producer.
Asian Tigers - South Korea, Singapore, Taiwan and Hong Kong. These were newly industrialized countries right after WWII. They followed a model of specializing in inexpensive exports when their labor costs were low, and then spending on infrastructure and education to diversify their economies.
Agglomeration- when a substantial number of enterprises cluster in the same area, as happens in a large, industrial city, they can provide assistance to each other through shared talents, services and facilities. Excessive aggomeration leads todeglomeration.
Break-of-bulk point- a location where transfer is possible from one mode of transportation to another.
BRIC-"Brazil, Russia India and China" an acornym to lump these newly developed/industrialized countries into a group that acknowledges their similar development statuses as emerging economies. Some say Mexico, Indonesia, Nigeria and Turkey are emerging as the "MINT" countries - the new ones that fit this rising economies description.
Bulk-gaining industry- an industry in which thefinal product weighs more or comprises greater volume or fragility than the inputs.
Bulk-reducing industry- an industry in which the final product weighs less or comprises a lower volume than the inputs.
Comparative Advantage- an economic concept related to Free Trade that says a country should specialize in certain products for export when they hold an advantage in producing those products, and import other products in which they do not have an advantage as compared to other countries. In theory everyone benefits from the specialization and gets richer. A country has comparative advantage when they can produce that product at a lower opportunity cost than other producers. (Adam Smith argued for specialization in international trade and his thinking was "liberal' at the time, so this is called liberal economic theory).
Complementarity-Simply stated, two places are said to exhibit a degree of complementarity if each offers something to the other that it needs or wants. At a basic level, it could be that one community produces things that another place is willing to purchase. In this situation, the first place has a product and the other place has money. Thus, they exhibit a degree of complementarity. For more information -https://www.e-education.psu.edu/geog597i_02/node/821
Cottage industry- manufacturing based in homes rather than in a factory, commonly found prior to the Industrial Revolution.
Economies of Scale - a proportionate saving in costs gained by an increased level of production.
Fairtrade(c) - A movementthat tries to ensure that products are made and traded according to standards that protect workers and small businesses/producers in the Global South (LDC's). Fairtrade as a movement emphasizes supporting small producers over large plantations and often pays a Fairtrade premium to producers to help them scale up, protect against price shocks, and do community development projects. Excellent summary here. I also have a one-page handout on it in chart form, see me if you want one.
Footloose industry- an industry in which cost of transporting both raw materials and finished product is not important for determining location of the firm. Examples include catalog companies in the U.S. (shipping charges are based on weight not distance), expensive and light items such as expensive shoes, computer chips and diamonds (secondary not primary).
Fordist production- form of mass production in which each worker is assigned one specific task to perform repeatedly. Is vertically integrated. Pioneered by Henry Ford for mass production with interchangeable parts. Large factories were needed to produce all the parts of a manufactured good.
Free Trade- is aimed at increasing a nation's economic growth and involves policies such as lower tariffs, and loosening environmental and labor standards. It beneifts MNC's (multi-national corporations) and its rules are enforced by the WTO (World Trade Organization, think Carl Lindner suing the European Union), the World Bank, and the International Monetary Fund.
Industrial Revolution- a series of improvements in industrial technology that transformed the process of manufacturing goods. Began in England with the move of production of spinning and weaving from homes into factories using water as energy to run machines, and later steam power.
Just-in-time Delivery -rather than keeping large inventories of components, companies keep just what they need for short-term production and new parts are shipped quickly as they are needed. This leads to parts manufacturers needing to locate near auto assembly plants, for example.
Labor-intensive industry- an industry for which labor costs comprise a high percentage of total expenses. (textiles are labor-intensive, even though workers are low-paid)
Maquiladora- factories built by U.S. companies in Mexico near the U.S. border to take advantage of much lower labor costs in Mexico. (started in 1960's with initiatives by Mexico, have more recently lost jobs to China even though NAFTA increased the number in the mid 90's)
Multiplier effect - because there is a circular flow of money in the economy, an increase in jobs, especially jobs in a "Basic" industry, will create more jobs. For example, someone who sells video games to people in China brings in income for the company that gets spent in the local area on creating new jobs, hiring people for business services, and the personal spending of all the employees which stimulates a local or regional economy.
New International Division of Labor(or Global Division of Labor) - transfer of some types of jobs, especially those requiring low-paid, less skilled workers, from more developed to less developed countries.
Outsourcing- A decision by a corporation to turn over much of the responsibility for production to independent suppliers (aka, the job goes to a different company which is often overseas today, but don't confuse with "offshoring" which is when the job moves to a different country). All offshoring is NOT outsourcing because the job could stay within the company. All outsourcing is not offshoring, because company A could contract with company B to do certain work (like Aramark with your school lunch) but company B is still in the USA.
Primary sector- The portion of the economy concerned with the direct extraction of materials from Earth's surface, generally through agriculture, although sometimes mining, fishing and forestry.
Productivity- The value of a particular product compared to the amount of labor needed to make it. Productivity per worker is examined by summing production over the course of a year and dividing it by the total number of persons in the labor force. A more productive workforce points to moremechanizationin production.
post-Fordist production - the idea that modern industrial production has moved away from mass production in huge factories, as pioneered by Henry Ford, towards specialized markets based on small flexible manufacturing units. Another name for this is "lean production" because companies order the parts they need "just-in-time" to manufacture a good and don't even warehouse the parts.
Secondary sector- The portion of the economy concerned withmanufacturinguseful products through processing, transforming and assembling raw materials.
Site factors- location factors related to the costs of factors of production inside the plant such as land, labor, and capital.
Situation factors- location factors related to the transportation of materials into and from a factory. (Bulk-gaining and Bulk-reducing).
Technopole -an area planned for high technology (usually by government through incentives, near universities where R&D occurs) where agglomeration built on a synergy among technological companies occurs. Examples: Boston (Harvard, MIT), Silicon Valley (San Francisco area, Stanford, Cal Berkley), Washington DC, near Dulles airport in suburbs, and Plano Texas (outside Dallas) for telecom industries. These exist globally except for fewer in sub-Saharan Africa.
Transnational corporation- A company that conducts research, operates factories, and sells products in many countries, not just where its headquarters or shareholders are located. Sometimes also referred to as Multi-national corporations (MNC's). Examples: Proctor & Gamble, Unilever, Coca-cola.
Tertiary sector- The portion of the economy concerned with transportation, communications, and utilities, sometimes extended to the provision of all goods and services to people, in exchange for payment.
Textile-a fabric made by weaving, used in making clothing or linens, etc. This is a labor-intensive industry. This is also often one of the first industries to be affected by industrialization. England's industrial revolution began with textiles, which had formerly been a cottage industry.
Value added- The gross value of the product minus the costs of raw material and energy. Goods with high value added produce wealth.Development Vocabulary
Core -The 'core' consists of Western Europe, the United States, Canada, Australia, New Zealand, Japan, South Korea, and Israel. Within this region is where most of the positive characteristics of globalization typically occur: These are the developed, industrialized countries. Within countries and cities there can be Core Regions, as well, as seen in the uneven development in places like China and India.
Development (economic)- A process of improvement in the material conditions of people.
Development Gap-The development continuum gap is the socio-economic division that exists between the more developed countries in the north and the less developed countries in the south. With the exception of Australia and New Zealand all the 'rich' countries are in the Northern hemisphere. The Human Development Index (HDI) serves as a good indicator of which side of the gap a country lays.
Ecotourism -developing regions try to develop this industry. Tourists experience nature and the environment in a sustainable way that benefits the local economy.
Foreign direct investment- Investment made by a foreign company in the economy of another country.
Gender Empowerment Measure- Compares the ability of women and men to participate in economic and political decision making. LINK
Gender-Related Development Index(GDI) - Compares the level of development of women with that of both sexes.
Gini Co-efficient: represents the income distribution of a nation's residents. Is used to measure inequality. Compare the countries of the world here.Low numbers indicate countries with the least income inequality (most equal distribution).
Gross Domestic Product(GDP) - The value of the total output of officially recorded goods and services produced in a country in a given time period (normally 1 year), a measure of national wealth. When stated as a per-capita figure this is a measure of standard of living.
Gross National Product (GNP) - is a measure of the total value of the officially recorded goods and services produced produced by the citizens and corporations of a country in a given year. It includes things produced inside and outside the country's territory and is therefore broader than GDP.
Gross National Income(GNI) - Calculates the monetary worth of what is produced within a country plus income received from investments outside the country. A more accurate way of measuring a country's wealth in the context of the global economy.
Millennium Development Goals- Eight international development goals that all memebers of the United Nations have agreed to achieve by 2015.
More Developed Country(Minority World) - A country that has progressed relatively far along a continuum of development.
Periphery- theperiphery consists of the countries in the majority world: Africa, South America, Asia (excluding Japan and South Korea), and Russia and many of its neighbors. Although some parts of this area exhibit positive development (especially Pacific Rim locations in China), it is generally characterized by extreme poverty and a low standard of living. Health care is non-existent in many places, there is less access to potable water than in the industrialized core, and poor infrastructure engenders slum conditions in places. Within countries there are core and peripheral regions (uneven development).
Purchasing power parity -is a monetary measurement of development that takes into account what money buys in different countries (PPP after GNI or GDP)
Rostow's Development Model- assumes that all countries follow a similar path to development and modernization, advancing through thefive stages of development. Also known as "ladder of development." This model is aliberal developmenttheory, or "Modernization" theory.
Structural Adjustment Programs- Economic policies imposed on less developed countries by international agencies to create conditions encouraging international trade, such as lowering taxes on high earners, reducing government spending, reducing tariffs to promote trade, controlling inflation, selling publicly owned utilities to private corporations and charging citizens more for public services. (Many believe this was harmful and resulted in increased poverty in LDC's) This program was encouraged by the World Bank and loans from the World Bank were made contigent on implementing structural adjustments. Click here for more.
Uneven Development-The increasing gap in economic conditions between core and peripheral regions as a result of the globalization of the economy.
Wallerstein's World Systems Theory- (Core,Periphery, Semi-Periphery) Adependency theory, a structuralist theory. This emphasizes power relationships and the interconnections between places in the global economy. Core processes generate more wealth in the places where they occur because they require higher levels of education, more sophisticated technology and pay higher wages and benefits to those who perform them. Peripheral processes require little education, little technology and pay lower wages and benefits. Many of the people who perform these processes live in LDC's today; thus creating aNew International Division of Labor.
Industry Vocabulary
