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This article explains what free trade zones are and how they are used by large companies and enterprises, while still legally following customs and laws within the free trade zone.

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About Foreign-Trade Zones and Contact Info

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What Makes an Optimal Place to Start a Factory

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What Makes an Optimal Place to Start a Factory

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The article above gives an explanation of how a Factory's location would be based off of Weber's Least Cost Theory, making its location the most practical and cost friendly area to start manulfacturing.

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Weber’s Model of Industrial Location - Geographic Book

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Weber’s Model analyzes industrial location, focusing on minimizing transportation, labor, and agglomeration costs.

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How Goods and Services Move Between Countries

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How Goods and Services Move Between Countries

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This image represents the movement of goods and services between multiple countries in different stages of development, core being highly elite countries and Periphery being less developed with a primary to tertiary economy.

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John Friedman was an urban theorist and founding figure of the Department of Urban Planning at the UCLA Luskin School of Public Affairs. He propounded the core-periphery model of regional development in the year 1966. The Core-Periphery Model by Friedman shows the process of economic growth and urban development in time and space.

Basic Idea of Core-Periphery Model

Basically, his theory explains the process of unbalanced economic growth starting from the pre-industrial era in an urban landscape. The fundamental idea of this model is that there is unequal distribution of socio-economic and political power which causes urban prosperity and deprivation. Therefore, once the process of economic growth starts in a certain town, the town continues to grow faster and larger in comparison to the surrounding human settlements.

The core is a large and fast growing city.

The periphery refers to the villages and smaller towns around the large city.

The wealthy people live in the core therefore most of the capital is also available in the core. Contrarily, the periphery is abundant in natural resources and labor force.

So, the exchange between core and periphery must take place for economic growth. The core spends capital to import resources and labor force from the periphery. The labor force in the periphery receive rent for resources and wages for their work.

However, the terms of trade or exchange between core and periphery is structured in such a manner that the periphery receives less than it ought to. Thus, the core continues to grow richer while the periphery remains poorer.

Friedman's model is closely related to Growth Pole theory by Perroux, Cumulative Causation Theory by Gunnar Myrdal and Unbalanced Growth Theory by Albert Hirschman . Anyway, Friedman's model explains the process of spatial interaction better than Myrdal and Hirschman.

Stages of Urban Growth

Friedman's model tries to answer the question that why does the core enjoy prosperity and the periphery experience deprivation. According to Friedman, there are four stages of economic and urban growth in a region. These stages are as follows.

1. Pre-Industrial Stage

The region at this stage is known as Resource Frontier Region. The resource frontier regions are underdeveloped but rich in resources.

At this stage, most of the economy has rural character with few dispersed centers of production (Fig. 1).

Primary economic activities such as agriculture, fishing, hunting etc. are the main economic activities. The size of the settlements is small.

These settlements have low levels of interaction amongst them and the mobility of traders remain limited to smaller areas.

2. Transition Stage

The resource frontier region develops economically into Upward Transition Region. the upward transition regions are growing fast by using its current stock of natural resources.

In the transition stage, the economy starts to experience spatial concentration of economic activities. This means that the investment of capital, industrial growth and trading activities morph the some of the rural settlements into urban settlements.

Although trade and transport facilities improve in this stage, but the laborers do not travel far from their homes for work.

3. Industrial Stage

The fast growth in the manufacturing sector necessitates the migration of the labor force from rural to urban areas. Additionally, the natural resources are also extracted at a fast pace to support industrial growth.

There are two more processes which take place in this stage i.e. outsourcing and innovation diffusion.

Innovation diffusion refers to the process of spread of knowledge, technology and methods of production from the core to the subordinate town(s). This process of outsourcing and innovation diffusion ignites the fast industrial growth in the towns in the periphery. Development of very fast modes of transport and communication helps diffusion of innovation and commute of labor.

4. Post-Industrial Stage

Since many cities become equal in authority, it does not mean there will not be any kind of flow of labor and resources between the core and periphery. In reality, the cities become spatially integrated or dependent through the process of division of labor. It means that different cities specialize in different economic functions therefore, each city depends on another city for supply of a certain product (Fig. 4). For example, the Maruti-Suzuki factory in Gurugram depends on Jamshedpur for supply of steel. Such division of labor between cities increases economic and logistical efficiency.

The demand for many services which assist in efficient transport, communication and marketing increases. Eventually, the urban economic growth is driven by the service sector.

Assessment of Core-Periphery Model

Friedman's core-periphery model explains the process of spatial integration and dependence, beautifully. We can apply this theoretical framework at regional, national and international scale. It also explains the increasing disparity between rich and poor in the globalized world. This model is based on the experience of European and American countries. Therefore, it needs thorough evaluation and assessment as follows.

1. It seems that this model is teleological in approach. It states that a country will go through four stages of regional development in a sequential manner.

2. The concentration of economic and political power may not result in spatial concentration of economic activity. For example, the multinational companies in the modern world have huge economic authority but they operate in many countries instead of a single core.

3. This model does not clarify the concept of power. It presents the 'power' as an abstract idea without any play of democratic institutions.

4. Further, economic integration may take place among different cities in the regions but the economic authority may still be with the core. For example, Apple Inc. is an American company but it produces iPhones in many countries. However, the decision making power is still in the hands of Apple Inc. not in the hands of people where iPhones are produced.

5. In reality, the industrialized stage depicts the process of exploitation of resources from the periphery rather than benevolent diffusion of innovation.

Conclusion

We can conclude that this model applies a sequential approach based on the experience of western world to explain the process of economic and urban growth of all the nations. It concludes that the process of economic growth ends with decline in regional inequality due to innovation diffusion. However, the reports by the world institutions like Oxfam and United Nations Development Programme are pointing towards the fact that inequality among people and nations is increasing. The rich are growing richer and the poor are becoming poorer despite the rise of the service economy. In short, this model explains only the economic growth in historical sense and may not apply to developing nations of the present day.

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Core-Periphery Model by Friedman - Pan Geography

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The Core-Periphery Model by Friedman (1966) shows the process of economic growth and urban development in time and space.

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The video above gives a short, but well explained reason for how and why the U.S.'s economy today has gone from a Fordist manufacturing economy to Post-Fordism.

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What is The World Trade Organization (WTO), and what do they do

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What is The World Trade Organization (WTO), and what do they do

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The video shown gives a detail explanation from the WTO of how they work, and what their goals are as an organization.

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Map of the Top 2,000 Transnational Corporations

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Map of the Top 2,000 Transnational Corporations

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This map shows the location and weight of stock market capitalization (or "market cap") of the top 2,000 transactional corporations around the globe through a thematic map using proportionally sized circles.

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The image above gives a very clear cut example of what comparative and competitive (or used by the image differential) advantages and how they help push a companies success, all through the images of balloons. This image is very helpful because it simplifies the two advantages while still connecting back to how they work in the business world.

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What is the Industrial Revolution and what did it effect

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What is the Industrial Revolution and what did it effect

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The National Geographic article gives a basic overview of what happened during the industrial revolution and how it diffused to the U.S. leading to a modern economy.

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Industrialization ushered much of the world into the modern era, revamping patterns of human settlement, labor, and family life.

Subjects

Social Studies, Economics, U.S. History, World History

Image

Power Looms

Women and children were often employed in the textile industry during the first century of industrialization. Their smaller fingers were often better at threading the machinery. Despite routinely working 16 hours, or longer, a day they were paid little.

Photograph by Nancy Carter

The Industrial Revolution deserves the name with which historians have tagged it. It brought about thorough and lasting transformations, not just in business and economics but in the basic structures of society. Before industrialization, when the most significant economic activities in most European countries were small-scale farming and artisan handicrafts, social structures remained essentially as they had been during the Middle Ages. The advent of industrial development revamped patterns of human settlement, labor, and family life. The changes set in motion by industrialization ushered Europe, the United States of America, and much of the world into the modern era.

Most historians place the origin of the Industrial Revolution in Great Britain in the middle decades of the 18th century. In the British Isles and most of Europe at this time, most social activity took place in small and medium-sized villages. People rarely traveled far beyond their home village. During the 18th century, the population of Britain and other European countries began rising significantly. Among the first signs of economic transformation was an increase in agricultural productivity, making it possible to feed this rising population. The combination of these factors led to profound changes in how rural people lived. Gradually, large-scale mechanized agriculture to serve the market began to overtake the kinds of subsistence farming most peasants had practiced for generations. The enclosure movement, which converted commonly held grazing lands into fenced-off private property, added to the new pressures facing the poor, rural majority.

The population increase added to the number of people facing difficulties making a living on the land. Many left their agrarian lives behind and headed for towns and cities to find employment. Advances in industry and the growth of factory production accelerated the trend toward urbanization in Britain. Industrial cities like Manchester and Leeds grew dramatically over the course of a few short decades. In 1800, about 20 percent of the British population lived in urban areas. By the middle of the nineteenth century, that proportion had risen to 50 percent. Other Western European lands such as France, the Netherlands, and Germany also experienced an increase in urban populations, albeit, more slowly. These changes thoroughly disrupted longstanding patterns in social relationships that dated back to medieval times.

The nature of work in the new urban industries also had significant social impact. Before the Industrial Revolution, artisans with specialized skills produced most of Europe's manufactured goods. Their work was governed by the traditions of their craft and the limits of available resources. Human and animal muscle and the waterwheel were the era's main energy sources. With the coming of factory-based industry, the coal-fired steam engine and other machinery set a new, faster pace for labor. In the factories, coal mines, and other workplaces, the hours were very long, and the conditions, generally, dismal and dangerous. The size and scope of manufacturing enterprises continued to increase throughout the 19th century as Europe, the United States, and other parts of the world industrialized. Larger firms that could achieve economies of scale held an advantage in the competitive sphere of international trade. In the industrializing world, the new means of production meant the demise of earlier, slower modes of labor and life.

The most insidious consequences of the new conditions may have been those affecting the most basic social unit: the family. The preindustrial family was fundamentally both a social and an economic unit. Married couples and their children often worked side by side on a family farm or in a shop, or otherwise divided their labor for the family's overall benefit. It was also common in 18th-century Great Britain for women and men to work in their rural homes doing jobs such as textile spinning and weaving on a piecework basis for merchant owners. This decentralized form of employment was called the "putting-out" or domestic system. However, the rise of factory production and industrial cities meant a separation of the home from the workplace for most male workers. Very often, the need for income motivated men to leave their families behind for jobs in the city. Even without geographic separation, many types of industrial jobs were so demanding that they left little downtime for workers to spend preserving the relational bonds we associate with family life.

Women also worked outside the home. Unmarried women, in particular, often worked as domestic servants. Many British women, including mothers, were employed in the textile mills to help their families make ends meet. Child labor was also rampant in the textile industry during the first century of industrialization. Factory owners appreciated having workers whose fingers were small enough to manipulate delicately threaded machinery. Despite their importance to the industry's output, these women and children were paid very little and were routinely compelled to work 16 hours per day or longer. Their jobs were perceived as less skilled than those of their male co-workers, although the working conditions were sometimes equally dangerous.

The United States underwent many of the same social transformations arising from industrialization. U.S. manufacturing began in earnest after the nation broke from England in the 1770s. An embargo on foreign imports during the presidency of Thomas Jefferson, and a British blockade of the Atlantic seaboard during the War of 1812, spurred domestic production. The United States became one of the world's leading economic powers by the 1830s.

In the first half century after U.S. independence, a major proportion of the nation's labor force shifted from the agricultural to the manufacturing sector. As in Great Britain, the textile industry led the way toward mechanization. In many industries, though, home-based production and artisan craft traditions gave way to wage labor in larger, machine-powered operations. Industrialization, along with great strides in transportation, drove the growth of U.S. cities and a rapidly expanding market economy. It also shaped the development of a large working class in U.S. society, leading eventually to labor struggles and strikes led by working men and women.

By the late 19th and early 20th centuries, Britain, the United States, and other industrialized nations were debating and enacting reform laws to limit some of the worst abuses of the factory system. However, similarly oppressive labor conditions arose in many parts of the world as their economies industrialized in the 20th and 21st centuries. The reorganization of daily life wrought by industrialization had effects that weakened the material basis for the institutions of the family and the community. These effects were so lasting that they can still be felt in the present day-even as developed societies have shifted into an era that scholars describe as "postindustrial."

Media Credits

The audio, illustrations, photos, and videos are credited beneath the media asset, except for promotional images, which generally link to another page that contains the media credit. The Rights Holder for media is the person or group credited.

Director

Tyson Brown, National Geographic Society

Production Managers

Gina Borgia, National Geographic Society

Jeanna Sullivan, National Geographic Society

Program Specialists

Sarah Appleton, National Geographic Society, National Geographic Society

Margot Willis, National Geographic Society

other

Last Updated

October 19, 2023

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Industrialization ushered much of the world into the modern era, revamping patterns of human settlement, labor, and family life.

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The image above shows how two regions or places can benefit from each other by giving a resource other doesn't have in return of a resource needed to start production.

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Custom Unions are pacts made within a group a countries who give up a little bit of sovereignty top be able to trade freely without tariffs or any other heavy laws, one of the most famous being the European Union (EU).

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The image above shows each economic sector being represented by an image, with primary with raw materials like plants, secondary being manufacturing, tertiary being retail businesses and selling products, quaternary being educated research, and quinary being high positions of authority.