Ge 🌍graphy Notes Sec 4

Chapter 3: Industrialisation

Table of Contents:

Industrialisation/Global Economy
1. Types of Economic Activities
○ Primary
○ Secondary
○ Tertiary

2. Factors affecting Industrial development/location

○ Physical Factors
i. Land
ii. Raw materials
iii. Energy
○ Human Factors
i. Capital
ii. Labour
iii. Transportation
iv. Market
v. Government
○ Case Study: China : Recent Industrial Development and Trade
Patterns

3. Global Economy
○ Factors contributing to the shifting patterns of production
○ Advantages and disadvantages of MNCs
○ Deindustrialisation
Types of Economic Activities
● Primary Industries refer to industries that extract resources such as
Agriculture, Fishing, Forestry and Mining (does not offer much
economic development)
● Secondary Industries refer to industries involved in the processing
of primary products to manufacture new and better products such as
textiles, steel and cars
● Tertiary Industries refer to service industries that deal with
transport, wholesaling, retailing and personal services. People are
employed in educational institutions, tourist facilities, healthcare
organisations, governmental organisations, financial institutions,
retail shops (Mainly jobs found in major cities, that drive economic
activity)

Linkage between development and composition of

industries (for DRQ)
● In LDC economies, proportion of workforce employed in primary
sectors is very high
● In DCs the service industry provides most of the employment for
majority of the workers, machines replaced the need for workers in
the manufacturing industry
● Greater demand for health, education and leisure services has led to
the growth of service and high tech industries in DCs
● A high composition of workers working in primary sector is indicative
of low levels of development
● A high composition of workers working in tertiary sector is indicative
of high levels of development
Factors affecting industrial development/location
Physical Factors

Energy
❖ Reliable and continuous supply of energy is needed to process raw
materials and produce goods
❖ Some sources of energy include fossil fuels, hydropower which
influences where certain industries are set up
❖ For example, in the 1960s steel industries will set up their factories
near to coalfields due to amount of energy needed to produce steel
and to reduce the cost of transporting coal
❖ In the present, most industries use electricity or gas to meet energy
needs, due to the flexibility in the delivery of energy, fuel sources
have a weaker influence on location of industry as compared to the
past
❖ However, the aluminium refining and smelting industry is still
located near to power sources due to the large amounts of energy
required for the manufacturing.
 ❖ These manufacturers favour places that have large supplies of
electricity so that they can reduce cost of building expensive cables
to direct electricity from other sources
❖ For example, Canada the world’s third largest manufacturer of
aluminium has 10 of its 11 smelters located at Quebec to tap on the
area’s hydroelectric power for the manufacturing process

Land
❖ Due to competing land use, land in urban areas are more expensive
than land in the suburbs or rural areas
❖ In cities and towns, land is more valuable as retail outlets, offices
and residential areas
❖ For industries that require a large amount of land they will often
purchase cheaper land in the outskirts, which is financially more
attractive to them
❖ Assembly lines of motor vehicles require a large amount of land due
to the hundreds of components needed to manufacture a car
❖ For example, reclaiming wetlands, coastal lands and hills can create
more land for industries. In Singapore, the Jurong Industrial Estate
with more than 2000 factories and 6000 hectares of land was
created by levelling hills, reclaiming swamps and extending the
coastline
❖ Flatted factories may also be made use of in cities as it efficiently
utilises space due to it being multi-storey
❖ For certain industries they may choose to locate in cities:
➢ They are a small scale operation which produces high value
goods
➢ They need to be close by to monitor market trends
➢ Perishable goods that have to be sold locally
Raw Materials
❖ Raw materials are needed to make a product (Steel: Iron, Coal,
Limestone, Manganese)
❖ Precious raw metals are used in the jewelry industry
❖ Bulky and heavy raw materials are very expensive to transport
❖ Process plants will try to locate to areas near raw materials (Paper
Mills: Located near forests, Smelting: Located near mines)
❖ Finished products are often lighter than raw materials as such they
are much cheaper to transport to their markets than it is to transport
raw materials to the processing plant
❖ For industries which make use of perishable raw materials they will
tend to locate close to source of raw materials (milk, palm oil and
sugar cane)
❖ For industries which make use of multiple raw materials, they would
have to find a location where the major raw materials can be brought
together at the lowest cost
❖ A significant raw material is water as it is used for beverage
production, washing and cooling of machinery and transporting raw
materials

Human Factors

Capital
❖ Capital is the money needed to start up an enterprise, employ
workers and buy land, buildings, machinery, as well as raw materials
❖ Capital can be provided by banks, governments or through local and
overseas investors
❖ Capital intensive industries require high levels of investment in
machinery and equipment but require low levels of labour
 ❖ For example, Silicon Valley near San Francisco in California supports
a cluster of high-tech industries which deal mainly with electronics
and computer components. The development was made possible
due to the location of nearby advanced research facilities and the
availability of capital. California receives large capital investments
from corporations and individuals

Market
❖ The completed manufactured products will have to be transported
to where they are in demand
❖ Demand may come from other enterprises or if it is a final product
from the consumers
❖ Markets are areas where there are concentrations of companies or
people with spending power
❖ The higher the spending power, the stronger the locating force of
the market
❖ Market oriented locations are beneficial for perishable goods and are
near cities where people have a higher amount of disposable income
❖ For fashion industry, close proximity to the market allows them to
react quickly in changes to consumer preferences
❖ In recent years, due to advancement of technology, garment
manufacturing industry can electronically transfer designs and more
efficiently transport their products as such they need not be located
near markets anymore
❖ One example is the globalisation of the fashion garment
manufacturing industry, there are specialised industrial estates in
China and India for manufacture of clothes, shoes, handbags and
other accessories using designs and patterns from DCs

Labour
 ❖ Labour influences the location of industries as some industries such
as textile, clothing and footwear are very labour intensive while
other industries require high skilled labour
❖ Different industries will be attracted to different regions where there
is a large amount of labour which they require, at lower costs hence
maximising profits
❖ Industries are always searching for cheaper labour alternatives/
higher skilled labour such as european motor industries looking
towards Poland and Lithuania which have lower labour costs
❖ For example, in the textile industry Cambodia has benefitted from
trade agreements with DCs. Cambodia has some of the lowest
labour costs in the world S$0.35 per worker an hour in 2004 which
is much lower than the labour costs in the DCs such as France,
Germany and USA which is S$30.48 an hour per worker. Therefore
many industries manufacture in Cambodia
❖ *(Can USE SS Uniqlo example)

Transport
❖ Transportation may involve bringing raw materials to processing
plants and moving finished products to a market
❖ Transportation costs may be high because raw materials or finished
products are bulky and heavy, as such manufacturers will aim to
locate where costs are lowest
❖ Factories that process raw materials are often found near ports or
railways, so that materials can be transported more efficiently
❖ Advancements in transportation technology have permitted goods to
be transported over long distances
❖ For example, in Japan, the motor vehicles industry increasingly
manufactures its components in LDCs within Southeast Asia where
cost of production is much lower than in Japan. Cost of production
has lowered due to lower cost of transportation, as a result of faster
 and larger transport vehicles. Components can still be transported
over thousands of kilometers and delivered at a competitive price
❖ Raw materials may also be shipped to a port where they are
offloaded onto a rail or road transportation facility as such these
potential sites may be attractive for industries that use the materials
passing through
❖ Locations near junctions attract many industries where there are
numerous components needed for the finished products, the high
density of transportation also provide distribution access to markets
which consume the finished products

Governments
❖ Government policies regardless of whether they are targeted at the
industrial sector may encourage or restrict the location of industries
❖ Cities and the government have to work together to vie for local and
foreign investments
❖ To attract investments they can provide incentives including tax
holidays, co-investment arrangements and purpose built
infrastructure
❖ The government can manage the economy to better provide basic
infrastructure (roads, railways, ports, electricity) for the success of
industries
❖ For example, a dedicated reliable electricity supply built by the
Karnataka State Government of India has been a success factor for
the development of the electronics industry in Bangalore
❖ Governments also play the role of promoting their educated and
skilled workforce which is a requirement for modern industries such
as computers and telecommunications
❖ Governments can also put tariffs on imported good so as to develop
local industries
 ❖ Establishment of industrial, business and science parks so as to
encourage industries to locate in this area. These parks are usually
provided with all basic infrastructure
❖ For DCs such parks are built to reduce unemployment while in LDCs
such parks are used to develop an area that was previously used for
agriculture
❖ Governments can direct or encourage the location of industries in
areas where there would be an advantage for the economic and
social development of a region. For example, a motor vehicle
company producing Opel cars was set up in Bochum after the town’s
nearby coal mines shut down. This can be attributed to a skilled
labour force and a good transportation network of roads, railways
and navigable rivers in the region.
❖ Governments can also impose planning controls on where industries
can and cannot locate, energy generation plants and
slaughterhouses/agriculture are located away from population
centres

Case study: China: Recent industrial Development and

Trade Patterns

China as the ‘new workshop of the world’

❖ China is producing more goods for the world

❖ Exports from China to all other countries increased by 21% in 2002
to $322 billion, growing over six-fold from 1997
 ❖ China makes 60% of the world’s bicycles and over half of the
world’s shoes. It accounts for 20% of the world’s garment exports
and manufactures half of the computers in the world
❖ China attracted a record $52.7 billion in foreign direct investment
(FDI) in 2002 taking over from the USA as the world’s biggest net
recipient of FDI.
❖ The huge concentration of investment in China has pulled
investment away from industrial centres in the rest of Asia and
elsewhere.
❖ For example 23,000 Japanese companies are now operating in
China.

Factors that have led to China’s rapid industrial

development

Government
❖ Chinese economy began to open up to the outside world in 1978 it
imitated the export-led success of neighbouring countries such as
Japan and South Korea
❖ China joined the World Trade Organisation in 2001
❖ Chinese products were able to compete in the global market due to
lower tariffs (tax)
❖ Setting up of Special Economic Zones along the western coast,
central government policies have empowered the coastal regions to
attract foreign investment, import advanced technologies and
participate in international trade projects.

Capital
❖ China attracted a record $52.7 billion in foreign direct investment in
2002
 ❖ The major attraction to manufacturers/investors is the cheap labour
market where wages are less than 5% of those in the USA.

Labour
❖ Labour is relatively inexpensive throughout China,
❖ The labour force in the coastal areas are better educated, more
skilled and boast significantly higher productivity.
❖ The lack of trade unions is also a significant factor in attracting
foreign investment.

Transport
❖ Aspects of infrastructure (rail, road, air transport,
telecommunications, etc) are more highly developed in the coastal
region, compared to the middle and west of China.
❖ 90% of China’s international trade passes through its seaports.
❖ Production facilities located at or near the ports are likely to
encounter fewer delivery delays and lower domestic transportation
costs.

Raw Materials
❖ Proximity of suppliers will lower the cost of production
❖ For example, the Singapore electronics manufacturer Flextronics,
located in Doumen, received only 5-10% of the plant’s components
from local factories in 1999. Now it is between 50 and 70%.
❖ China is the world’s largest producer of coal and is the leading
exporter of zinc and iron
❖ Efficiency of the supply chain now rivals the low cost of labour as the
major location factor for some companies.

Impacts of China’s rapid industrialisation

 Positive Impacts
Economic ● A large amount of foreign direct
investment
○ China attracted a record $52.7
billion in foreign direct
investment in 2002 taking
over from the USA as the
world’s biggest net recipient
of FDI.
● Increase in employment in secondary
and tertiary industries for more
economic opportunities
○ The share of the primary
sector fell from 71% in 1978
to 50% in 2000. During the
same period the secondary
sector increased from just over
17% to almost 23% while the
tertiary sector rose from
slightly more than 12% to
almost 28%.
● Increasing GDP and average wages
for workers
○ During this 20 year period the
Chinese economy grew eight
times bigger and between
1990 and 1998 the number of
Chinese living on less than a
dollar a day fell by 150
million.
Negative Impacts
● Rising wages mean that they have to
pay workers more and production will
not be as cheap
○ Average hourly wages hit $3.60
last year, spiking 64 percent
from 2011, according to market
research firm Euromonitor.
That’s more than five times
hourly manufacturing wages in
India, and is more on par with
countries such as Portugal and
South Africa.
○ For example, Uniqlo first started
product operations in Shenzhen,
China due to the lower cost.
However, as China’s
manufacturing and labour costs
rose, it was no longer profitable
for the company to base its
product operation in China. In
2013, Uniqlo moved out of
China into Vietnam where
labour costs were half that of
China’s.
● Concerns over quality and safety of
products of China’s products leading to
boycott
○ EUToday Poll: 61.9% of
respondents would support
Boycott of Chinese goods
Social ● Economic growth allows for more
money to be spent on healthcare,
education and other services
○ A $24 billion high-speed rail
link between Beijing and
Guangzhou is being planned
which would reduce train
travel time between the two
cities from 23 hours to 10
● Improved working conditions and
longer holidays/ leave for employees
○ Nike also raised the minimum
wage it paid workers,
improved oversight of labor
practices, and made sure
factories had clean air
● More Chinese travelling abroad for
tourism
○ The government estimated
that in 2003 there were 1.8
billion train, bus and aircraft
journeys over the Spring
Festival.
Environmental ● China has been spending more
money to improve environment
○ China has taken steps to
dismantle coal-fired power
plants, reduce overall
emission levels and cut
particulate-matter emission
● The world’s largest ever urban migrant
population
○ About 150 million(277.5 million
as of 2015) migrant workers in
China.
● Ageing population in rural areas
require more care
○ Rural and remote areas in many
countries experience more
pronounced population ageing
than urban areas and
subsequently, have a higher
share of older residents. Lower
population density and more
geographically dispersed
populations make it more
difficult and expensive to create
and maintain a comprehensive
service infrastructure
● Working conditions in certain regions
may not be comprehensive and still
hazardous
○ Apple factories workers
exposed problems with their
poor training and equipment,
exceedingly long working hours,
dirty facilities and low wages
(Business Insider)
● Air, water and land pollution from
rapidly increasing number of factories
and power stations
○ The Delta of the Pearl River in
Guangzhou is heavily polluted
● The large and increasing demand for
raw materials which is damaging the
 rates. Huge progress has been
made on air quality, and there
are now fewer smog days in
China’s largest cities.
Global Economy
environment in China and many other
countries
○ Three Gorges Dam was heavily
criticised for environmental
problems
○ China has been paying the
environmental cost of massive,
unregulated rare earth mining
and processing with low
margins; Mines with their
severely polluting extraction
activities have contaminated
drinking water sources and
agricultural fields of local
communities. China’s
mega-cities further downstream
like Guangzhou, Shenzhen and
Hong Kong may be at risk from
the toxic contamination
upstream;
○ A RMB38 billion environmental
bill to clean-up mines in
southern Ganzhou city was
estimated by the Ministry of
Industry and Information
Technology remains unpaid
Factors contributing to the shifting patterns of production

What is transference ?
➔ Movement of industrial activity from one location to another
➔ Mainly involves shifting manufacturing operations in DCs to LDCs
➔ This has led to decline in manufacturing in DCs such as UK and
America and increase in LDCs such as South Korea and China (Since
the 1960s)

Competitive Advantage
➔ Competitive advantage refers to the advantage one location has over
another for the production of a good or the provision of a service.
◆ Lower costs of labour, energy, land, raw materials and other
costs, such as taxes, are all competitive advantages that will
make a significant difference in the final cost of a product or
service.
➔ Within the Asia-Pacific region, there are considerable competitive
advantages for seeking lower labour costs, especially when these
costs can make up a substantial part of overall costs of production.
This makes lower labour costs a very important factor to consider for
manufacturers.
◆ For example, in the 1980s, Nike manufactured most of its
footwear products in South Korea. As wages began to rise,
Nike looked elsewhere, moving its production from South
Korea to Indonesia and China, where wages were as low as 5
percent of wages in South Korea. Nike has managed to keep
labour costs low-, below 10% of total costs of production.
 ➔ Thus most companies tend to locate manufacturing facilities in areas
with low labour costs .The LDCs in general have lower labour costs
than the DCs.
➔ Moreover, various incentives offered by governments have helped
the transference of manufacturing activities from DCs to LDCs.
◆ China's Special Economic Zones (SEZS) along the southeast
coast . These SEZS, together with around 100 development,
science and business zones, offer a variety of tax incentives.
Such incentives include reduced tariffs, reduced business tax if
technical knowledge is transferred into the zone and
partnerships for foreign and Chinese companies. Foreign
companies, particularly large Transnational Corporations
(TNCS), such as Honda in Guangzhou , have brought
considerable skills, as well as investment capital to the zones.
◆ Companies exporting the majority of their products are
particularly encouraged by reduced income and business taxes.
The incentives offered enable companies setting up in these
zones to have a competitive advantage over companies outside
the zones.

Outsourcing
➔ Outsourcing involves the production of components or finished
goods in areas of low labour costs. Ideally, outsourcing should bring
about lower costs of assemblage of raw materials, lower taxes and a
greater speed than what is usually achieved at the main
manufacturing plants. Large firms place orders with smaller
companies to produce particular goods or components at a set price
and quality.
➔ Outsourcing still leaves the parent company functioning at its
original location. The parent company may develop more research,
design and administrative functions, instead of manufacturing ones.
 It may also become an assembly point using components
manufactured by outsourced companies.
➔ TNCS, such as IBM, Toyota, General Motors, ICI, and BHP-Billiton,
have headquarters in one country and branches and subsidiaries in
other-countries. This arrangement has allowed many TNCS to gain
competitive advantages in producing components, as well as
finished goods at lower costs. Countries where the TNCS' subsidiary
companies are located may also benefit, in terms of employment and
some amount of technology transferred from the parent company to
produce the goods.
◆ For example, the outsourcing of machine parts for the United
States of America's aerospace industry involves manufacturing
in Mexico, where labour costs are lower. The delivery time of
finished products is also faster than in the United States of
America
➔ The impact of transferring manufacturing activities has particular
significance for both the DCs and LDCS:
◆ It reduces manufacturing activities in high cost producing
regions such as Europe and North America.
◆ It increases manufacturing activities in the LDCS, particularly in
special development zones where foreign and local
partnerships are involved in the manufacturing processes.
◆ It assists in the transfer of technology from the DCs to LDCs.
◆ It increases the level of skills for some workers in the LDCs.

Space Shrinking Technology

➔ Space shrinking technology refers to transportation and
communication technology. Space shrinking technology has greatly
reduced distances between countries by allowing quicker
transportation of raw materials, people and manufactured goods.
Space shrinking technology enabled ideas and information to be
 communicated over distances at a more rapid rate, and allowed
companies to outsource more effectively
◆ For example, motor vehicle components made in China and
Indonesia can be shipped to assembly lines in Japan, Germany,
Australia and the United States of America at lower costs.
Such transportation costs are low enough to ensure that
outsourcing has lower cost advantages.
➔ On a global scale, space shrinking technology has enabled
manufacturing activities to-be more widely distributed. There is less
need for concentration of activity in particular regions of the DCs.
The possibilities of profitable production in alternative regions, both
within the DCs and LDCS have also increased.
◆ Transportation
● Some examples of space shrinking technology include
super freighters, commercial jet aircraft, container
shipping. Commercial jet aircraft, super freighters and
container ships that carry people and transport goods
much faster to their destinations. These means of
transportation are at the same time getting bigger,
enabling more people and more goods to be transported
at the same time.
● International air routes for major airlines link the principal
population centres. Such links facilitate the movement of
people, ideas and freight. The links also allow for
outsourcing of components and finished goods.
● However rural locations with limited access to modem
transportation are unable to take advantage of space
shrinking technology to aid in their economic
development
◆ Communications
● Information highways of electronic components
contribute to the trend of transference of manufacturing
activities from the DCs to LDCs. This information
highway includes:
○ Stationary satellites above the Earth that
potentially link nearly everyone through the
Internet and telephone services. International
meetings using both Internet and phone systems
are commonplace in businesses nowadays. Internet
usage is highest in wealthier countries.(in 2002;
High income per capita countries: approx 450 per
1000, Low income per capita:50 per 1000,World
average :100 per 1000)
○ Optic fibre cables that allow for high-speed
transmission of information at excellent resolution.
They are increasingly used to send designs, drafts
and other documents across the world
○ Mass media, such as newspapers and television,
which has been affected by technological
advancements. Newspapers written in North
America and Europe can be transmitted digitally to
Asia and printed locally.
● The electronics components mentioned above allow for
the separation of production and other business
functions such as conferencing and accounting. A
company with its headquarters in New York City, USA
may be outsourcing its production in Tijuana ,Mexico and
Mumbai ,India, and assembling finished products in
Taiwan.
 ● Communications via the information highway mentioned
above means all aspects of the company's operations can
be monitored.
● Raw materials and finished goods can be moved to
where they are needed, provided costs of
communications and transportation are at a level where
production costs remain competitive.

Advantages and Disadvantages of MNCs (Assess impacts

of MNCs on LDCs)

*For each impact explain 1 or 2 aspects (Brief explanation) give

example for 1 and for counter explain 1 aspect and give example as well

Economic Impacts
Employment (+)
● MNCs provide many new jobs in different industries such as textile
industries (Nike), electronics industries (Samsung and Foxconn)and
automobile industries (Toyota and Nissan)
● When MNCs shift their manufacturing operations to LDCs, it opens
up job opportunities and hence employs a large number of locals
● According to Nissan Motors, they have provided about 17,000 jobs in
Mexico for the variety of occupations involved in manufacturing,
engineering and supply chain management, product development,
purchasing, quality assurance, sales, marketing, finance and legal
areas. in the process of producing a car and selling it to consumers

Contributes to GDP of LDCs (+)

 ● MNCs will invest capital into LDCs so that they have better
equipment and expand their operations so production is more
efficient
● The money invested into the country will allow them to improve
their basic infrastructure as well and when production in LDCs
increase there will be increased incomes for workers hence there is
an overall GDP increase
● For example, as of 2018, Samsung Vietnam's revenue had been
about USD 65 billion, equivalent to 28% of Vietnam's GDP and is
now its largest overseas production base making over $280 billion
SGD in 2017.

Transfer of know-how and technology (+)

● Technology can reduce cost of production and advance
communications
● As such MNCs can promote productivity and efficiency in the host
country.
● This happens when they import new technology into the countries
they operate in.
● This will increase competition as the local firms will as well try to
imitate their technologies or hire workers initially trained by MNCs
● Competition between the local firms and MNCs will cause them to
improve their products or even adopt new technology.

LDCs Over-reliance on MNCs (-)

● LDCs may be too dependent on MNCs to provide employment for
workers and spur the growth of the countries GDP
● For example, by the end of 2018, the mobile phone and electronics
industry was an important part in the processing and manufacturing
sector, accounting for 18.8% of Vietnam's GDP and experiencing an
annual growth rate of over 10%. In the first quarter of 2017
 Samsung Galaxy Note 7 encountered a problem, which lead to a
decline in sales, as such the GDP growth of that time was only 5.1%

Link:
Economically, MNCs bring more benefits to LDCs. They employ large
numbers of locals and help reduce the unemployment rate. Though the
wages may be low, it is much better than working on the fields, where
many farmers are trapped in the poverty cycle.

Social Impacts
Improve standard of living and reduce poverty (+)
● MNCs provide jobs with decent wages for locals so that they have
higher disposable incomes in which they can use to purchase basic
necessities and extra goods
● Jobs in the manufacturing industry has a much higher pay as
compared to being a farmer as their profits are based on crop yield
● For example, in the Bắc Ninh Province, Vietnamese citizens are
becoming increasingly affluent. The place has shifted from an
agricultural to an industrial province with industry and service value
now accounting for 92 per cent of economic production. FDI capital
in the province registered by the end of 2017 had reached $15.5
billion due to the investment of Samsung

MNCs looking into welfare of the locals (+) (DON'T MEMORISE NOT WORTH)
● Over 2018 – 2019, Samsung collaborated with Business for Social
Responsibility (BSR) – a global non-profit organization specializing
in human rights – to conduct a Human Rights Impact Assessment
(HRIA) for Samsung Electronics Vietnam. Samsung is using the
findings to put even more measures in place to improve employee
health and safety, and pre-empt any potential issues.
Poor working conditions (-)
● In India and Sri Lanka, women in factories connected to H&M and
Gap regularly face physical and sexual abuse for not meeting daily
targets and for rejecting advances from male co-workers. More than
540 workers at factories that supply the two retailers have described
incidents of threats and abuse

Low wages (-)

● In 2012, Foxconn was accused of underpaying wages and having its
employees work excessive hours. More than 40% of the staff in the
Foxconn factory who were working overtime were being paid at the
normal hourly rate instead of the time-and-a-half required by
Chinese law and by Amazon’s own supplier code of conduct.

Link:
The negative social impacts caused by MNCs are a concern especially in
terms of the low wages and poor working environment. Some MNCs have
stepped up to improve the welfare of their workers due to government
pressure. However, there is still a lack of efforts by many MNCs to monitor
the situation.

Environmental Impacts
Greener way of packaging products (+)
● One example is Puma, 99% of their products and packaging are
PFC-free and they are setting their targets on zero discharge of
hazardous chemicals from the supply chain by 2020
Eco-friendly alternatives (+)
● Between sedans, SUVs, crossovers and compact cars, Toyota is the
only car brand to offer an eco-friendly option for nearly every
possible class of vehicle. The other efficient and eco-friendly option
is the innovative Toyota Mirai.

Pollution (-)
● Increased greenhouse gas emissions especially if factories make use
of fossil fuels instead of renewable energy sources
● Treatment and disposal of waste generated during the
manufacturing process is not taken seriously
● For example, one large waste treatment station in Shenzhen under
Foxconn was found by the local government to be emitting
pollutants several times the legal limit.

Link:
The negative impacts on the environment outweigh the benefits. Many
MNCs took advantage of the lax environmental laws in LDCs and polluted
the environment. Much of the damages are evident in the poor air quality
in major cities in China and India. These damages are usually irreversible.

Conclusion
In conclusion, MNCs do bring more benefits than problems in LDCs. Some
criticisms of MNCs may be due to other issues. For example, the fact that
MNCs pollute is perhaps a failure of government regulation. Also, small
firms can pollute just as much. MNCs may pay low wages by western
standards but this is arguably better than the alternatives of not having a
job at all. Also, some multinationals have responded to concerns over
standards of working conditions and have sought to improve them.

Deindustrialisation
● Deindustrialisation has occurred in some regions of the DCs as
traditional industries have declined and have been partly replaced by
newer, high-tech ones, such as electronics and pharmaceuticals,
● Together with service industries such as recreation and finance.
deindustrialisation takes place when a country's manufacturing base
shrinks.
● Can also occur when the country outsources their manufacturing
industry as the economy shift towards a more tertiary-based
industry
● This is usually associated with a decline in manufacturing
employment and a fall in manufacturing's contribution to GDP. For
example, the area around Glasgow in southwest Scotland was, until
the 1940s, a major shipbuilding, engineering and metal producing
centre. In the 1960s the area was suffering from deindustrialisation,
with unemployment reaching over 20 per cent of the workforce by
the early 1970s.
● However, in the early 1990s, the region's economy expanded again,
largely because of large-scale investment in the electronics industry.