Transcript Chapter 12

Chapter 12
Service and Settlements
Service/Settlement Introduction
• Call centers are some of the fastest growing services in
global economy.
• MDC tertiary sector- service any activity that fulfills a
human want or need and returns $ to those who
provide it
• Services are located in settlements– permanent collections of buildings where people reside,
work, obtain services
– Under 1% of the earths surface are settlements; important
because people rarely live in isolation
1 locational factor is important for geographers- PROXIMITY
TO MARKET.
Industry- site/situation factors
Service- customers! “location, location, location”
Where are services located?
…Outsourcing
• http://www.youtube.com/watch?v=0G_p6oO
8yAw&app=desktop
3 types of service
• Customer
– Provide services to individual customers who desire them and can
afford to pay for them
– Retail/wholesale, education, health/social, leisure/hospitality
* ½ all jobs in USA are consumer services (ILP income search)
• Business
– Facilitate the activities of other businesses
– Professional (law accounting architecture)
– Financial
– Transportation/information
*1/4 all jobs in the USA are business service
• Public
– Provide security and protection for citizens and businesses
Checkpoint!
• Which sectors of the economy do your family
members work in?
• If they are in the service sector, in which types
of services are those jobs in?
The rise and fall of service…
• Impacted most by 2008 recession
• Employment
– 1972-2010 USA all growth in the services sector
– Primary/secondary sectors activities decline
– Business service grew, slow in finance/transportation due to development and improved
efficiency (i.e. less ppl to answer phones)
– Consumer- rapid in healthcare/education/entertainment
– Retail steady- more stores but not as many employees needed
• Recession
– Service sector was the trigger 2008!
– Real estate prices rise- sell higher quickly “flip”
– High risk loans for mortgages
– Investors bought/sold risky assets expecting value to continue to rise
– Reduce/eliminated govt regulations of financial institutes
– Unwillingness financial institutes to loan once recession started
*rapidly affected every region of the world but varied based on region/locality
• Result: decline GNI 1st time since Great Depression
Checkpoint!
• What are the 3 types of services?
• The fastest growing consumer service is…
• T/F The fastest growing business service is
professional.
• Consumer, business, public
• Health
• True
Where are Consumer Services Distributed?
• Central Place Theory- helps explain how the most profitable locations
can be identified (location= profitable Walter Christaller 1930s)
• Market area
– Area surrounding a service from which customs are attracted
– Nodal region- core- where characteristics are most intense
– Periphery- may get products from another node
– USA Hinterlands- surrounding largest urban settlements
*Google: Naturally occurring hexagons” Why are human economic
activities created in hexagonal patterns?
• Range
– Maximum distance people are willing to travel to use a service
(everyday 3 miles; other 60+ miles)
– Ppl often answer in time rather than in distance (vary with road
conditions)
– Threshold: minimum # ppl to support the service (census data) must
know cliental- ex. Movies- young mall 50,000 ppl+
Different size settlements
• Small market area,
small threshold,
short range
• Nesting of
services/settlements
- central place
hexagons unless
there is a physical
barrier (hamlet,
village, town, city)
• Rank/size distributioncountries nth largest
settlement 1/n the
population of the largest
settlement
• In plain english…2nd largest
settlement is ½ largest
size…forms a straight line;
otherwise not rank/size
rule
• Google “Most populous
cities in Peru.” Do they
follow the rank/size rule?
• Primate City rule- largest settlements more
than twice as many ppl as second ranking
settlement
• Primate city- largest city
• Ex. Mexico- Mexico city 5x larger Guadalajaranot enough wealth in society to pay for full
variety of services…so…travel long distances
to reach urban area (LDC)
• Rank/Size rule better in MDC
Find the optimal location for service
• Central place theory tells where to open/expand facility or
in economic downturn where to close
• “location, location, location” proximity to customers
• Best location for factory- region of world
• Best location service provider= corner vs. another corner
same location
• Location profitability
– Range- survey…willing to travel?
– Dept store- 250,000 ppl 15 minute radius
– Justify location; if competition nearby need a larger threshold
* GIS used to figure out…1 layer characteristics of people, average
income, trade area, etc.
Gravity model
• predicts optimal location of a service that s
directly related to the distance ppl must travel
to access it
– Consumer behavior
– More ppl = more consumer possibility
– Close you are; more likely you are to visit
Periodic Markets
• Collection of individual vendors who come together
to offer goods/services in a location on specific days
• Sparse populations, low incomes, purchasing power
is low because there are no full time shops
Muslim countries 1x/week No fridaysreligious rest
Rural China- 3 city 10 day cycle- lunar month
no work on the 10th day
Korea- 2-15 day market cycles- lunar month
Africa- 3- 7 day cycles varied by ethnicity
Checkpoint
• Central Place Theory helps determine the
most profitable location for a consumer
service.
• A central place is surrounded by a market area
that has a range and threshold.
• Market areas of varying sites nest and overlap
• Regular patterns of settlements that provide
consumer services can be observed, especially
in developed countries
Business Services Distribution
• Hierarchy of Business
services
• “global cities” information
and capital (banking, law,
insurance)
– HQ of large corporations and
stock exchanges in G. C.
– Ad agencies, lawyers,
accountants for HQ
– Banks
• Alpha
• Beta
• Gamma
Level of classifications
Factors for classifications
Economic- HQ multinational
Political- International/Heads
of states
Cultural- media, sports,
educational institutes
infrastructure – airport,
healthcare, communication
Global Cities cont.
• Modern technology- allowed for decentralized
manufacturing; transportation/communication
reinforces global cities in the world economy: busy
harbors/airports @ rail/highway junctions
• Consumer/Public Services in Global Cities
– High % wealth live in global cities due to luxury/specialized
products
– Entertainment and museums/libraries
– Centers of National/International political power
– National capitals offices for govt, mansions, etc.
– New York home of the United Nations
– Brussels- Most important center for EU
Business services
• Two types of business services in LDC’s are
offshore and back office.
– Supportive laws
– Weak regulations
– Low wage workers
Offshore financial services
• Islands/microstates
• Taxes- tax free status
– USA loses $70billion in taxes offshore
• Privacy- evade disclosure in home country, protect
assets from lawsuit/divorce/creditors; short
statute of limitations
• IMF, UN, Tax Justice Institute (look at figure)
• Cayman Islands- British colony near Cuba
$1trillion legally based
• To get at the $ lawsuits need to be filed in
offshore centers-difficult
Business Process Outsourcing (BPO)
• “back office” like insurance claims, payroll,
transcription, clearical activities, billing/technical
• Traditionally this was done “in house” with close
supervision and rapid turn around; raising rents +
modern communication= less spatial proximity
– Low wages- 1/10th MDC wage – attracts
educated/motivated LDC employees
– English abilities- India, Malaysia, Philippines (British/
American colonies)- late night/American day.
Entertainment rooms provided- rely on public
transportation come- early stay late– If it is 3pm today in Louisville, what time is it in India?
Economic base settlements
• Basic industries
– Settlements distinctive economic structure derives
from exports to consumer outside settlement
• Non basic industries
– Enterprises whose customers live in the same
community; consumer services
• Economic base
– Community's collection of basic industries (exports)
important because exporting brings $ to local economy
stimulating non basic for settlement
– New workers, families for new industries, non basic
supermarket, laundry, restaurants to settlement.
– Basic drives non basic
Calculating basic vs. non basic industries
• % of workers in an industry compared to the national
level
• If higher % in the local community basic economic
activity
Settlements classified by basic activity- manufacturing
Post industrial society- MDC basic activity is
business/consumer/public service
S/W growing rapidly, but N/E expanded business services
more rapidly
ex. Cleveland/Pittsburg- steel to hospitals
Distribution Talent
• Individuals with talent gravitate toward cities
with more cultural diversity.
• They promote economic innovation so
important to attract
Checkpoint!
• T/F Business services cluster in global cities?
• Developing countries provide two services for
MDC. What are they?
Clustered vs. Dispersed rural
settlement
• ½ ppl in the world live
rural
• Clustered rural
settlements are
agriculturally based
communities in which
families live in close
proximity w/fields
surrounding
• ½ ppl live in urban
settlements
• Dispersed rural
settlements- farmers
living on individual
farms isolated from
neighbors rather than
along side other
farmers in settlements
Clustered
•
•
Homes, barns, tool sheds, church,
school, shops
Hamlet or village concept
•
•
•
•
Allotted strips of land (shortage)
Own/rent
Collectively owned by “lord”
Farmers own/responsible to
fragmented parcels- live in clusters
• As the population grows 2 options
1) Circular- central open space
surrounded by structures (colonial
America)
2) Linear- building clustered roads,
river, communication, river access
(Quebec)
How does a cluster settlement
contribute to regional dialect of English
from Chapter 5?
Dispersed
• Immigration brings
heterogeneous groups
• Bought or given land- plentiful
and cheap
• Natural increase/net in
migration
• Enclosure movement- 17501850 England
– Individual strips- single farms in
some cases govt forced ppl to
give up land
– Disadvantages of strips- time
traveled + more roads (restricted
planting)
– + agricultural efficiency
– Displaced farmers go to urban
settlements so village centers
were kept or destroyed based on
centrality of new farms.
Services in Early Settlements
• Nomad – Von Thunen (city with surrounding) –
permanent settlement
• Early consumer services- bury the dead, priests,
builders
• 5,000 yrs ago recorded history- settlements
easier on males because “home + hearth”
mentality
• Manufacturing tools, clothing, shelters,
containers, fuel-> specialization of jobs ex.
blacksmiths
• Early public service- protection, religious
activities, walls
• Early business services- food- hunt/gather
– extra food for hard times turns into transportation,
everyone has a different resource based on
environment so settlements -> warehouse centers>trade, terms of transactions, fair price, records,
currency, etc.
Settlements discover plants-> agriculture…plant seeds,
raise animals
Checkpoint!
• Summarize the types of services in early
settlements
Urbanization
• Rural settlements existed 5,000 years ago
• In 1800 3% Earths pop lived urban; today ½
• Urban origins-> Mesopotamia->fertile crescent of
SW Asia and diffused Egypt, China, S. Asia (4
hearths)
• Prehistoric urban- fertile crescent (present day
Iraq), SW Asia, Africa
Ancient Urbanization
• 2500 BC E Mediterranean (Crete, Turkey, Greece) trade
centers provided government and military for
surrounding hinterland.
• City- states- independent self governing communities
that included settlement and nearby countryside.
– Athens- largest city-state ancient Greece- culture,
philosophy, public service, consumer service- activities not
found in smaller settlements
– Roman empire encouraged urban settlement “all roads lead
to Rome”
• 5th century fall of Rome
• Urban settlement dies as self-sufficiency model through fragmented
rulers
• Europe’s culture was preserved by monasteries/isolated rural areas
Medieval Urban
• Europe’s urban revival happened in the 11th century with
feudal lords establishing urban settlements.
• Benefit
– Lords get army without paying full time “standing army”
– Residents freedom from rural serfdom (farmed lords land, but
only kept small portion of output (sharecropping))
Surplus from the countryside brought into the city for
sale/exchange; markets expand trade with other free cities
Palaces, churches, prominent buildings arranged around central
market square (tallest/elaborate church) usually walled city which
lacked space for construction.
• Modern tourists appreciate churches, but lack
understanding of densely built medieval town.
Post Roman Empire Collapse
Largest urban settlements in China
Industrial revolution- London largest
NY in the 20th century
21st Tokyo
Dimensions of Urbanization
process by which the population of urban settlements grow
• Number of people living
in urban areas
• MDC higher %
• LDC more # large urban
settlements
• 44/50 largest urban
settlements in LDCs
Factors: Migration w/w
out job
High natural increase rates
• % of ppl living in urban
areas
• 2008 urban population
exceeded rural settlement
pop except in Latin
America (urban % = MDC
urban %)
Cause: industrial revolution
+ development of services
Urban vs. Rural
1930s Lewis Worth said urban dweller is different
today…city = permanent settlement with large size
Urban
rural
Size
Know small % ppl- rolesboss, etc.
Relationships are
contractual
Know neighbors, related?
“look out for everyone”
High density
Specialization of role
Social groups compete for
same territory
Social heterogeneity
Freedom, tolerate diversity
Lonely/isolated
Restricted- scored for bad
behavior
*Worth’s theory valid for
LDC’s. All but 1% workers
in MDC hold “urban” jobs
Television, car, phoneequalizer
Checkpoint!
• Developed countries have higher ______ of
urban residents.
• T/F Developing countries have most of the very
large cities.
• T/F Few humans lived in urban settlements until
the 19th century
• Settlements are either _____ or _______.
• T/F Rural settlements, which specialize in
agricultural services, may be clustered or
dispersed