Barcelona Field Studies Centre

GCSE Industry Glossary

22@: a high-tech zone located on a brownfield site in Barcelona.

Agglomeration: a group of industries in the same location.

Agglomeration Economies: savings which arise from the concentration of industries in urban areas and their location close to linked activities. e.g. A car factory attracts component suppliers to locate close by, saving on transport costs. Other savings are made in labour and training costs, and the use of the services found in urban areas, e.g. housing, banking, roads, electricity, etc.

Assembly Industries: see Screw Driver Industries.

Assisted Areas: see Development Areas.

Balance of Trade: the value of exports minus the value of imports; there may be a trade deficit or trade surplus.

Break of Bulk Location: a location such as a coastal port which takes its advantage from a position where there is a forced transfer of raw materials or goods from one form of transport to another. Coastal locations are favoured for iron and steel plants in the UK since the coal and iron ore raw materials are now imported.

Brownfield Site: an inner-city derelict site which can be cleared and reused for new industry.

Business Parks: these are mainly found on edge-of-city greenfield sites, although some are part of inner city redevelopment schemes. Usually over 70% of the land is converted into ornamental gardens and lakes. They are ideal locations for high-tech industries such as electronics and research institutions.

By-products: what is left over after something is made e.g. chemicals following the refining of oil. Some by-products can be treated to make other products.

Capital: wealth created for use in the production of further wealth. Examples of capital are money, machines and buildings.

Capital Intensive: an activity which requires a lot of money.

Cheap Labour: See Overseas Competition.

Colonial Period: the structure of world trade today has its origin in the colonial period when MEDCs used LEDCs as sources of raw materials for their factories.

Commercial: used to describe the business activities of trading and buying or selling goods.

Commodity: products produced for export.

Components: parts of a product that are transported to a factory (plant) for final assembly e.g. brakes, lights, wheels, glass, seals etc. are all car components.

Congestion: usually concerned with transport when there is so much traffic it stops or slows down the movement.

Containerisation: goods being packed into large metal boxes for transport by road and/or sea.

Core Region: an area at the heart of economic activity e.g. a well-off industrial region of a country e.g. South-East England. See Industrial Development Certificates, Cumulative Causation, Multiplier Effect and Agglomeration Economies.

Cumulative Causation: the process by which one region of a country becomes increasingly the centre of economic activity. (See agglomeration economies and multiplier effect).

Cycle of Decline (Deprivation): as traditional industries close, job losses lead to less money in the area, with a 'knock-on' effect on other businesses such as suppliers, shops, etc. More businesses are forced to close and the problem becomes worse and worse. The most able workers move away to other areas; the area becomes more run-down with high crime, vandalism etc. and an ageing population.

Decentralisation: the movement of shops, offices and industry away from urban centres in MEDCs and NICs into retail and business parks in the suburbs. Recent trends have been to decentralise still further out into many semi-rural locations. High land and labour costs are two of the main push factors.

Declining Region: one where traditional heavy industries are closing down leading to high unemployment and out-migration e.g. South Wales. See Deindustrialisation and Cycle of Decline.

Deindustrialisation: the decline of a country's traditional manufacturing industry due to exhaustion of raw materials, loss of markets and competition from NICs.

Derelict Land: waste land with decaying houses and closed-down industry, typical of inner city areas in MEDCs.

Development Areas: areas of high unemployment in the UK; the government tries to encourage industries to move to these areas by offering incentives:

  • labour subsidies

  • purpose-built, rent-free factory sites

  • tax-free periods of up to 10 years

  • grants for machinery and equipment

  • excellent communications (motorways)

  • retraining schemes to provide a skilled workforce

Division of labour: increased productivity gained when workers specialise in one particular part of the manufacturing process e.g. fitting windscreens in a car plant. They become faster and more skilled.

Economic Base: a wide economic base is typical of MEDCs where many industries contribute to generating wealth. A narrow economic base is typical of LEDCs where only a few industries contribute.

Economic Development: the generating of wealth through the development of industry.

Economic Infrastructure: transport networks; gas, electricity, water grids; sewerage systems, etc.

Economies of Scale: savings made as a result of large-scale production, through buying in bulk, division of labour etc.

Employment Structure: See Occupational Structure.

Enterprise Zones: small run-down inner-city areas and other areas of industrial decline with high unemployment in the UK where financial incentives are available to encourage investment and renewal. The government gives tax concessions to firms, grants for buildings and machinery, removes various planning restrictions and improves communications and infrastructure e.g. London Docklands.

Exports: goods sold abroad.

Feedback: the reinvestment of some of the profits into new inputs within the factory system.

Fixed Industry: one which is tied to a particular location.

Footloose Industry: one which could set up in many different locations. It is not tied to a fixed location. It may locate where labour is cheaper, or where the government offers incentives.

Formal Employment: where people work to receive a regular wage and are assured certain rights e.g. paid holidays, sickness leave. Wages are taxed.

Global Economy: industrial location is no longer linked to one specific country; choices of location are global and depend on strategies to sell the maximum number of products with the lowest costs possible. See Overseas Competition.

Globalisation: This is the trend where people are becoming more interconnected and interdependent. Information technology is driving this trend by enabling companies to move money and ideas instantly at the click of a mouse. The ways in which goods and information are moved between countries are becoming easier.

Government Disincentives (Controls): include Green Belt and Industrial Development Certificates.

Government Incentives: include Grants, Labour Subsidies, Tax-Free Periods, Rent-Free Periods, Removal of Planning Controls, improvements in Infrastructure and Communications, Purpose-Built Factories, Greenfield Sites, worker Retraining schemes and New Towns.

Government Policy: aims at attracting labour-intensive industries e.g. assembly plants to areas of high unemployment. UK has been called 'Taiwan of Europe' with Japanese trans-nationals locating their branch plants in areas of cheapest labour, taking advantage of government grants. See Government Disincentives and Government Incentives.

Grants: money paid to an industry towards the cost of new machinery, training etc. These are given in Development Areas to attract new industry.

Greenbelt: a zone of farmland, parkland or open countryside which surrounds an urban area and is designed to prevent urban sprawl. The zone is protected from new developments by law.

Greenfield Site: an industrial site often located on the edge of of town, previously used for farming or other rural activity.

Gross National Product (GNP) per capita: the total value of goods produced and services provided by a country in a year, divided by the total number of people living in that country.

Heavy Industry: one with heavy/bulky raw materials and heavy/bulky finished products e.g. Iron and Steel. These industries tend to be very polluting.

High-Tech Industries: these involve the use of research and development to create high value, technology-based products and processes.

High-Tech Agglomerations: by locating near each other, high-tech firms are able to exchange ideas and information, share training services and amenities such as calibration laboratories and research facilities. They have access to a pool of highly-skilled labour. See Business Parks.

Human and Economic Location Factors: include labour supply, capital (money), markets, transport, government policy, economies of scale, improved technology, recreation/environment.

Imports: goods bought from abroad.

Import Substitution: when a country (LEDC) tries to produce all its own goods and services in order to limit imports.

Industrial Classification: the categorization of industry into Primary, Secondary, Tertiary, Quaternary sectors.

Industrial Development Certificates: these are issued by the UK government to control where industry can locate; they are difficult to obtain for firms wishing to locate in the South-East of England. See Core Region.

Industrial Estate: an area of land planned and zoned for industry, usually with good access to the motorway network.

Industrial Inertia: the survival of an industry in an area even though the initial advantages of location are no longer relevant. e.g. the survival of the steel works in Sheffield is due to the prestige of Sheffield cutlery.

Informal Sector: This is particularly strong in LEDCs and made up of work done without the official knowledge of the government and therefore without paying taxes.

Informal Work: this involves jobs people have set up for themselves, such as shoe shining. The jobs require little capital to set up, require few skills, are labour intensive, small scale and can often be done from home.

Infrastructure: the facilities which provide the essential framework for industry e.g. roads, power supply, sewerage etc.

Inputs: the things needed to run a factory e.g. capital, raw materials, power, labour etc.

Invisible Trade: trade in products that cannot be 'seen' e.g. tourism, financial services and technological 'know-how'.

Job Rotation: workers are skilled in a number of different jobs and several people are capable of doing each job. This ensures that each job can be covered in the case of absence. It also means that jobs can be regularly rotated to prevent a worker from becoming bored in a particular role.

Just-in-Time: a production system where components are delivered just in time for assembly. This saves transport and storage costs as well as theft.

Kaizen: a Japanese concept meaning 'continuous improvement'. Kaizen requires workers thinking about improvements day by day and minute by minute.

Knowledge Economy: the new economies based on the processing of knowledge and information using telecommunications.

Labour-intensive: industries where labour costs are high compared to capital costs, e.g. clothing.

Labour Location: access to skilled labour is a very important factor in the location of modern industry today.

Land-locked: countries with no access to a seaport. This is a particular problem for LEDCs, e.g. Zaire and Zambia that are heavily reliant (60% and 98%) on the export of copper.

L.D.D.C.: London Docklands Development Corporation given the task by the government of clearing large areas of derelict land in London Docks and selling the sites to property developers. The L.D.D.C. was also involved in improvements in infrastructure to attract new industry.

Light Industry: manufacturing industry which has light raw materials/components and finished products.

Locational Factors: things that affect where industry decides to set up - usually in the most profitable place.

Logistics: the management and control of the flow of goods and services from the source of production to the market. It involves knowledge, communication, transport and warehousing.

London Docklands: a declining inner city area designated an Enterprise Zone by the government to attract new industry and employment after the closure of the docks.

Machinery: used in industrial processes to produce the finished product for sale. (Manufacturing).

Market: where industrial products are bought and sold.

Market Location (for industry): where transport costs for the finished product exceed the transport costs of the raw materials. Transport costs are lowest if the raw materials are transported to the factory located at the market and processed there. Today, since power (electricity) can be transported over long distances, a market location is more important than a raw material (coal) location.

Minerals: found in rock. They may be mined or quarried and then either melted down like iron ore (iron) or bauxite (aluminium), or used as a source of power (coal, oil).

Multiplier Effect: the 'snowballing' of economic activity. e.g. If new jobs are created, people who take them have money to spend in the shops, which means that more shop workers are needed. The shop workers pay their taxes and spend their new-found money, creating yet more jobs in industries as diverse as transport and education.

Natural Routes: river valleys and flat areas were essential transport routes in the days before the railway, car or lorry.

Newly lndustrialising Country (NIC): LEDCs which are developing manufacturing industries, usually with the help of Trans-national Corporations attracted by cheap labour and Government Incentives. e.g. South Korea, Hong Kong, Taiwan, Malaysia, Brazil, India.

Occupational Structure: the balance between the different sectors of a country's workforce e.g. primary, secondary, tertiary, quaternary. See table below.

Mainly tertiary Mainly secondary Mainly primary

Open-Cast Mine: a large quarry where a large pit is excavated on the Earth's surface to remove rock.

Ore: a rock containing minerals useful to people, e.g. iron ore, gold ore.

Outputs: products from a factory system, which include pollution and waste.

Overheads: costs which do not vary with output; these costs include rent, wages, electricity, etc.

Overseas Competition: NICs have the advantage of cheap labour, expanding national markets and the newest technology. This has led to a global shift of manufacturing industry towards South-East Asia.

Peripheral Region: an area on the fringe of economic activity e.g. a poor backward region of a country. An example is South Wales.

Physical Factors affecting Location of Industry: include raw materials, energy (power supply), natural routes, site and land.

Post-Industrial Economy: the economies of economically developed countries where most employment is in service industries.

Power: this is needed to work the machines in the factory. Early industry needed to be sited near to fast- flowing rivers or coal reserves, but today electricity can be transported long distances and the size and location of markets have become more important as a location factor.

Prestige: the image of a company, gained from its headquarters address (e.g. Oxford Street, London) or its its traditional high-quality manufacturing location e.g. Sheffield (steel). See Industrial Inertia.

Primary Industry: industry concerned with extracting natural resources from the ground or the sea, e.g. agriculture, fishing, forestry, mining and quarrying. The output of such primary production often needs further processing.

Primary Product Dependency: see Single Product Dependency.

Processes: the activities that take place within a factory e.g. rolling out steel.

Producer Services: services for manufacturing and other tertiary industries, e.g. advertising, legal services, management consultancy, market research.

Profits: money left over when wages, interest, rent, raw materials and other costs have been paid by businesses. Profits are the financial reward for taking risks.

Quarry: a large pit dug to obtain a mineral from the ground. Rocks and ore are quarried.

Quaternary Industry: one which uses modern technology to carry out research, handle information and give advice to other industries.

Raw materials: items from which more complex items are made. Steel is made using coal, iron and limestone: coal, iron and limestone are raw materials.

Raw Material Location: the bulkier and heavier these are to transport, the nearer the factory should be located to the raw materials. With the decline of traditional heavy industry, the three main factors deciding industrial location today are the nearness to a large market, the availability of skilled labour and government.

Recreation: leisure activities; what people do in their non-working time.

Research and Development: the branch of a manufacturing firm concerned with the design and development of new products. R&D employs highly skilled workers and is often located close to the company HQ.

Retraining Schemes: government-funded schemes to retrain unemployed workers in Declining Areas in the new skills required by high-tech Assembly industries attracted by Government Incentives.

Science Parks: An area of land, often located near university sites, where high-tech industries are located. Scientific research and commercial development are carried out in co-operation with the university.

Screwdriver industries: industries based on the routine assembly of products manufactured elsewhere e.g. Sony, South Wales.

Seam: see Coal Seam.

Secondary Industry: the manufacturing of goods using the raw materials from primary industry.

Service Industry: see Tertiary Industry.

Silicon Glen: a high-tech zone in Scotland.

Silicon Valley: a high-tech zone in California.

Single Product Economy: a country (usually LEDC) which relies on one, or a very small number, of products (usually raw materials) for its export earnings. e.g. Zambia, copper makes up 98% of its exports; Uganda, 95% coffee beans.

Site: ground on which a factory stands or is to stand or be located. Last century many sites were in today's inner city areas whereas now they tend to be on cheaper edge-of-city Greenfield locations

Structure of Trade: the differing proportions of primary, secondary and tertiary products that make up a country's exports and imports e.g. LEDCs export low-value raw materials and commodities and import high value machinery and consumer goods from MEDCs. See Single Product Economy.

Subcontract: where a large company, e.g. Nike, arranges for its goods to be produced by another company.

Subsidy: a grant of money made by the government to industries locating in Development Areas; industries locating in South Wales receive a labour subsidy per worker, which encourages them to employ more people, reducing their costs and increasing profits.

Sunbelt: a growth region of high-tech industry in the south west of the USA.

Sunrise Industries: high -tech industries.

Sunrise Strip: a high-tech industrial zone following the route of the M4 westwards to South Wales.

Tariffs: tax (customs duties) charged on imported goods. e.g. manufactured goods from LEDCs to the EU face a tariff of 30%. Japanese companies have located in the EU to avoid tariffs; these do not apply if 60% of the components are made in Europe.

Teleworking: using telecommunications to work from home.

Terms of Trade: the relationship between the average price of exports and the average price of imports. Terms of Trade always favour MEDCs at the expense of LEDCs. See Structure of Trade.

Tertiary Industry: does not produce anything but involves work in the service sector of the economy. It includes activities associated with commerce and distribution (wholesaling and retailing) as well as banking, insurance, administration, transport, tourism, health, education and entertainment services.

Trade Deficit: where a country imports more goods than it exports.

Trade Surplus: where a country exports more goods than it imports.

Trading Blocs: groups of countries who join together for tax-free trading purposes e.g. the EU.

Traditional Industries: old heavy industries located where cheap energy (coal) and raw materials, e.g. iron ore were found.

Trans-national Corporation (TNC): large companies which have branch plants throughout the world; their headquarters are often found in MEDCs.

Urban Diseconomies: the rising costs to industry as cities increase in size, due to increasing cost of land and labour, traffic congestion, crime etc.

Urban-Rural Shift: the movement of industry away from urban areas in recent years due to urban diseconomies, improvements in communications (motorways) and telecommunications (internet/fax/computer links), counter-urbanisation (the move of the middle class workforce to small towns and villages) and planning policies (government incentives, new towns, green belts).

Work: employment at a job or occupation; either formal or informal.

Zoning: where industry is separated from residential areas to avoid pollution, traffic congestion etc. Zoned areas are a result of planning.