Transcript Why are Site Factors Important

Why are Site Factors
Important?
Chapter 11.3
Labor
• Most important factor at a global scale
• China= ¼ of the worlds manufacturing workers
• India= 1/5
• MDCs= 1/5
Labor-Intensive Industries
• Wages and other compensation paid to employees constitute
a high percentage of expenses
• 11% of manufacturing costs in USA= labor
• Labor-intensive industry would be higher
• MDCs:
• 20$ per hour, roughly
• Compensation= health care, retirement pensions, other benefits
• LDCs:
• 5$ per hour, roughly
• Little to no benefits
Textiles: Labor Intensive
• Textiles= woven fabrics
• Less skilled, low-cost workers
• Three principle steps:
• Spinning fibers to make yarn
http://www.youtube.com/watch?v=-tLQRawPzU8
• Weaving yarn into fabrics
• Cutting fabric for assembly
• Three steps are not equally labor-intensive
• Percentage of the world’s women employed in this is high
Land
Rural Sites
•
Early factories= inside cities
• Attractive situation= close to large market
and could ship nationally easily by rail
• Typically multistory buildings
• Different floors served different purposes
•
Today’s factories
• Work better on one floor
• Land= suburban or rural locations…land is
cheaper
• Trucks now responsible for transportation,
don’t necessarily need to be near railroads
Environmental Factors
• Mild climate
• Opportunities for
year-round outdoor
recreation activities
• Proximity to
inexpensive
electricity
Capital
•
Manufacturers borrow funds to establish new factories or expand
existing ones
•
Silicon Valley= Banks have long been willing to provide money for
new software and communication firms
•
Ability to borrow money is a critical factor in the distribution of
industry in LDCs
• Must seek loans from MDC banks
•
May not get loans if a company is located in a country that is
perceived to have:
• An unstable political system
• High debt level
• Ill-advised economic policy
http://www.businessinsider.c
om/how-nike-solved-itssweatshop-problem-2013-5
http://www.youtube.com/watch?v=M5uYCWVfuPQ