Economic geography

RANGE

maximum distance consumer will travel in order to reach the good and services

to bought core of the theory

Range a place will attract people? the cost of the distance indicates if



consumers will go in that market

A single production point is not enough to serve all the population

If market demand is not all satisfied and there is a free entrance others will

start to produce economic activities few places of supply will arrive

new

The process stops when all the demand is fulfilled create efficient areas

Hexagon: spatially exhaustive markets in an area they intersect until they

reach the equilibrium

ALLOW MINIMZING OF MOVEMENT COSTS



“Construction of hexagons are pure mathematical tools”

Hierarchical structure of the places(low, medium, high)

Goods with a low number of thresholds less competitive interaction

Possible for high order offer the goods of the lowers orders

K = fixed ratio between the number of centers of order n-1 and centers of order

n

The principles deals with the areas of influence of the center of order N (1/3-

2-1*6)+(area of N)

3principle:

1. Marketing principle

2. Traffic principle

3. Administrative principle

1.MARKETING principle K=3

There are 3 centers of n-1 order under control of the n order one

2.TRAFFIC principle K=4

There are for n-1 centers under control of n order one

3.ADMINISTRATIVE principle K=7

All the 7 centres (6n-1 and 1n) are under control of the n order centre

Central place Principle: Optimizing and minimizing the supply covering a

specific space

The distance in variable impossible to generate complex network of

hierarchical order centres

Moving in a centre there is a progressive reduction of resources in order to

overcome the friction of the distance the process finish when the distance is

too much in order to be convenient acquire that good

The perfectly hierarchical structure represents the steady state of the

central place system

LOSCH THEORY

He extended the central place theory he demonstrates the utility of the

hexagons

He mathematically demonstrates Christaller theory using farmers all three

levels can exist together, creating a city effect

CITY EFFECT:

Hypothesis:

Number of places of supply limit (6 rich sectors-6poor sectors)

 Polarization of supply limit of accessibility in metropolitan areas



Considering multiple set of layers from different principles can offer more

goods and services that others center cant hexagons rotate around that city

OVERLAP PRINCIPLE

fulfilling all the other principles we find the dominant market

overlapping the 3 different hexagons

Loesch foresees several orders of K and the possibility to coexist and overlap

this creates an even more central place

metropolitan city: combination of different orders of K play important role

ECONOMY OF INDUSTRIAL ACTIVITIES

Industry is essential part of the world economic growth

After first economic revolution industry become one of the most important

drivers of the economy

During the years the industry changed from pure manufacturing to a kind of

trivialization every production type service

Now the most important industry is the ones

Vertical production process

Industry production system transformation of raw materials in finals products

Basic industry Es. Steele industry

Horizontal-lateral industry that collect together other products made by

other industry/part of the business

Processing Es. Manufacturing

Construction

Energy is essential for:

Services production process that create energy, transmission and transport

infrastructure, …

The different industry revolutions

Industry revolution every segment of the evolution line is linked and essential



for the others

First revolution:

Benefit of invention of steam machine, use, investing and developing of the

new technologies (coal iron, textiles and steel)

Massive movement of people to the countryside cities started to grow

access to basic goods and more socialization (opportunities)

Second revolution:

Transformation from coal to oil new industry, location, markets, products

Born of the Ford model

Third revolution:

High tech revolution

Fourth revolution:

Cyber revolution that affect the labor and the products

Creation of the circular economy:

Theoretical idea difficult in practical terms

Apply process in order to minimize waste and raw material use secondary

row materials= materials recycled in the product

Recycling process degradation of materials don’t get the same product, it

will be smaller and need other material in order to be produced

high energy intensive

energy is essential for the 4 industrial revolutions

use electricity fail

no How industry affect a given

territory firm in a given

manufacturing

territory is important in terms of the spatial reorganization of:

1. Demographic component

2. Urban structure

3. Other economic activities

4. Network of flows and traffic

5. Political- social rules

Industry use the location as a process of setting an industry

It is important to examine:

1. The factors of industrial location

2. The ‘geography’ of production factors

3. Location theories

production factors:

economy analyze scarcity, remuneration and accumulation of production

function

1. Land

2. Capital

3. Labor

4. Information

5. Scale, manufacturing relocation and spatial concentration

LOCALIZATION FACTOR

natural elements, technical, demographic, historical, economical, physo-



social and political factors

demographic factors how the population is educated to interact with an

activity

historical factors endogenous culture (preindustrial organization and

development)

economic factors mix of capital, work, land and knowledge Capitalmobile

and non-special component of production

political decision interact with entrepreneur in order to do investments

psycho-social in order to delocalize the production analyze the uses and

ideas of the people

Land and climate are connected with the location

Way to develop economic activity low interest way loan easy access to credit

to some important business

1) physical location of industry :

1. Competition with other human activities

2. Preference for flat lands; water; waste disposal

3. Land climate (advantages of setting in certain climate zones)



4. Land vs territory (space transformed by work: cities and communication

networks)

5. Land as set of renewable resources

Economic neoclassic theory:

2) Labor = undifferentiated set and production factor expressed by its price

(without considering the social context)

Cost of labor influence the location decisiondifferent cost and characteristic



3) Capital city even do not hold and historical link to industrial

production can be important because a high presence of political and

economical reason know the future because you are near the power

and the major information

4) Information spatiality production function group: technical

knowledge, political and economic information

Know how entrepreneurial innovation existing a give activity

1. Network of centers

2. Network of the existing industrial development

3. Entrepreneurial innovation

4. Research and development

5. Innovation diffusion:

Filtering down

 Learning by doing

 Learning by seeing

 Telematics - ICT

6.

5) scale: dimension of the company

Major apport of elementsElement doesn’t necessary imply bigger dimension

of simple production unit

Is important for bigger company to demineralize and specialize in parts of the

production process

Not necessary to be done from a single production plant

Provision of direct materials involve large number of subject in order not to

be cut of and diversification the kind of relation and acquisition with the

suppliers

There are 3 types of world production division referred to the countries:

1. Centre

2. Midperiphery

3. Periphery

Periphery countries that haven’t start full process of innovation of industrial

production

Global reduction the production cost and transport costs affect the

delocalization of the production decision in who will do what and where

If multinational has to deal with high costs delocalization in semi or total

periphery

Transactional manufacturing relationship with mother company is based by



the producers delocalized

Out of model companies started to bring back the control “localization

process”

spere transport cost and publicity of good fair of the business



TANI theory

Relationship between technological development, market dimension and

does not necessarily imply bigger dimensions of

economic production scale

single production units

LYFECYCLE

2 types of changes territorial, technological

The cycle of the product ends with a decline

The process may change also in the application and not for the results

Is less theoreticalrefers to a specific product

2 types of diffusion:

relocation and expansion

Relocationpeople physically move from one to another one

Expansion spreading to one place to another

Expansion:

Contagion way by witch innovation is spread

Hierarchical(bottom up to top down) related with the hierarchical system of

city/country and it start from the more important and waterfall till the smallest

PORTER- CLAUSTER Everything is related to everything else, but near things

1 law of geography

ST

are more related than those far apart” (distance decay effect)

define clusters in an organized way



Industry cluster group of similar and related firms concentrated in a small

geographical area from experiences specific and related to a single country

Porter generalizes

Cluster vs industry district

Cluster:

1. deal with small, medium and large companies

2. Importance of service provider

3. less define boundaries that district, very wide

4. heterogenous (products and sectors)

In a cluster distance is important in order to set relations with other

companies

Cluster’s players:

Firms

 Financial Institutions

 Public Actors

 Universities and Research Institutes

 Organizations for collaborations

 Media



District:

1. swarm of small and medium company that work in the same business

2. companies collaborate and compete

3. defines in a small place

4. companies are homogeneous

Porter focus on geographical (business or supply chain)

diamond of advantage: put together how industry cluster repo represent

national success

develop a set