Studied by 1813 peoplesectors
different categories the economy can be divided into
primary production
includes agriculture, mining, energy, forestry, and fisheries
secondary production
includes the processing of the raw materials drawn from the primary sector
tertiary production
includes the transportation, wholesaling, and retailing of finished goods to consumers
quaternary production
includes wholesaling, finance, banking, insurance, real estate, advertising, and marketing (business services)
quinary production
includes retailing, tourism, entertainment, and communications, government, or semi-public services such as health, education, and utilities (consumer services)
commodity chain
exists from the small-scale, family-based producers selling directly from the farm or through local farmers’ markets to transnational supply networks selling to an international customer base
resource processing
oil refineries, metals, plastics, chemicals, lumber, paper, food and beverage, concrete and cement, glass
textiles
clothing, shoes and leather products, artificial fibers and thread
furniture
home, office, bedding
appliances
home appliances, commercial equipment, power tools, lighting
transport
automotive, rail, aerospace, shipbuilding, recreational vehicles
health
pharmaceuticals, medical devices, personal care products
technology
home computers, business computing and servers, industrial control devices, phones, television and audio entertainment
low-benefit services
sectors in which the labor force tends to be hourly employees who receive few if any additional benefits, like paid vacation or health insurance
high-benefit services
sectors in which pay tends to be salaried and includes considerable fringe benefits like health, dental, and vision insurance; vacation; sick days; and retirement reimbursements
deindustrialization
shifting away from manufacturing as the main source of economic production
First World
industrialized and service-based economies that have free markets, a high level of productivity value per person and a high quality of life
Second World
describes the communist countries of which only two communist states remain today: Cuba and North Korea
Third World
countries with mainly agricultural and resource-based economies that have low levels of per-person productivity and a low quality of life
newly industrialized countries (NICs)
Third-World states with economies that have made a distinct shift away from agriculture and toward manufacturing as the focus of economic development and production
foreign aid, or foreign direct investment
funds to develop infrastructure and factories can come from internal sources
technology transfer
where technical knowledge, training, and industrial equipment is provided to NIC governments to increase business efficiency and capacity
Asian Tigers
a term used to describe the industrial economies of Asia that have been aggressive in terms of economic growth rates and their ability to compete for consumers
credit crunch
results from banks and investors holding back on industrial loans and investments
economic indicators
used to help understand the variable levels of development and measure the degrees of uneven development between states
gross domestic product (GDP)
the dollar value of all goods and services produced in a country in one year
gross national income (GNI)
the dollar value of all goods and services produced in a country, plus the dollar value of exports minus imports in the same year
trade surplus
EXPORTS > IMPORTS
trade deficit
EXPORTS < IMPORTS
per capita
“for every head” in Latin, meaning for each person
gross national income (GNI) per capita
the estimated income of a person converted to U.S. dollars at currency exchange rates
gross national income purchasing power parity (GNI PPP)
an estimate that takes into account differences in prices between countries
Human Development Index (HDI)
designed by the United Nations to measure the level of development of states based on a number of social indicators in addition to economic production
Gini coefficient
measures the level of income disparity between the country’s richest and poorest population groups on a scale of 0 to 100
Gender-Related Development Index (GDI)
takes the same indicators used to calculate HDI but replaces GDP per capita with income
dependency theory
holds that most LDCs (including all NICs) are highly dependent on foreign-owned factories, foreign direct investment, and technology from MDCs to provide employment opportunities and infrastructure
Prebisch thesis
detailed the dependency of Third-World economies on First-World loans and investments to pay for the building of new industries and infrastructure
ecotourism
tourism directed toward exotic, often threatened, natural environments, intended to support conservation efforts and observe wildlife
special economic zones (SEZs)
a type of export processing zone, defined as port locations where foreign firms are given special tax privileges to incentivize trade
Wallerstein's World Systems theory
sought to explain uneven development around the world in the 1970s
weight-losing/bulk-reducing manufacturing
involves a large amount of input that is reduced to a final product that weighs less or has less volume or bulk than the input
weight-gaining/bulk-gaining manufacturing
involves a number of inputs that are combined to make a final product that gains bulk, volume, or weight in the production process
supply chain
exists when parts are assembled into components that are then joined together to create larger finished products
Fordist production (Fordism)
relied on a single company owning all aspects of production, from steel manufacture to advertising
just-in-time production
methods in which suppliers send parts to assembly plants on an as-needed basis
spatial margin of profitability
the area where local demand for a service creates revenue higher than the local costs of doing business
footloose industry
businesses whose locations are not tied to resources, transportation, or consumer locations
agglomeration economies
exist where firms with related or similar products locate together in clusters or regions
deglomeration
occurs when a location is overloaded with similar firms and services
economies of scale
achieved when producers expand their operations but incur lower per-unit costs in the process
economies of scope
in which companies benefit from the increase in the number of different products under a larger brand
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