Name: ___________________________________________
AP
PREP
Period: ________
Economic Trends in the Modern World
Date: _________
Industrial & Economic
Change
Note: All of the following information in addition to your reading is important, not just the blanks you fill in, or the
specific answers given.
The Rise of the Service Sector
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Origins of the industrial boom of the 20th century can be traced to the rise of
__________ manufacturing – a highly specialized system for organizing
industrial production & labor; features ________-line production for mass
consumption.
Readjustment after sharp rises in ____ prices (1970s) created massive inflation
& a global economic downturn transnational companies (TNCs) &
multinational companies (MNCs) focused more on ________ industries.
______________ (flexible accumulation, or “post-Fordist”) – modern
production; producers can move production sites & renegotiate contracts more
easily (technological improvements in transportation & communication).
The declining cost of ______________ and ______________ along with changes in the production process, have led to an
enormous expansion of the service sector.
________________ – the movement of mass-production manufacturing from the core to more peripheral locations; has
done little to change the basic disparities between the core and periphery; regions with high labor costs & old technology
may experience deindustrialization (core countries, “Rustbelt”) as new tech. can be more cheaply appropriated elsewhere.
New International Division of Labor
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New International Division of Labor - __________ regions are dependent on the core for manufacturing jobs, likewise …
core TNCs are dependent on the periphery for cheap ______, fewer ____________ regulations, and expanding ________.
Production of televisions: 1) ________ & ________ - always been located near the ____________; 2) ____________ of
components – moved “________” (movement of the manufacture of components & assembly to regions outside of the
core (e.g., data processing jobs moved from the U.S. to India,…)) starting in the 1970s; 3) ___________ - most labor
intensive (went to Mexico, Southeast Asia, China, India & Brazil); greater ____________ brought production back to the
________ ________ & ________.
__________ ________ ____________ – capital invested by a country or corporation away from the home base, usually in
the periphery; U.S., Japan, Italy, Germany, France, U.K.,… most notable (can also refer to __________ __________).
Demand for capital in the periphery has led to significant ___________ from banks; many countries cannot afford the
_________ (cost of repayment plus interest) of their debts (mostly to core states & TNCs).
Specialized Patterns of Economic Concentration and Interaction
 Many service industries are not tied to ____ __________, so __________ accessibility is more relevant.
 ________ ________: John Friedmann (1980s); dominant in terms of the global-political __________; centers of control
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of the world economy, not necessarily the largest in population or industry; ex) N.Y.C., London, Tokyo, Sao Paolo,…
________-________ have been losing their dominant economic positions for decades – at the expense of TNCs…
________ ___________ ___ ________ & _______ (GATT); from 1948 – „94; assisted in creating a multilateral trading
system & reducing tariffs; worked w/ the World Bank & the ______________ ___________ ______ (IMF).
________ ________ ____________ (WTO); only international body dealing w/ rules of trade; 3 main purposes – 1) help
_______ flow freely, 2) a ________ for trade negotiations, 3) settle economic _________ b/w countries.
____________ ____ __________ ___________ ____ ____________ (OECD); born after World War II to coordinate the
Marshall Plan; today has 30 member countries (which produce > 2/3 world‟s goods & services), w/ more than 70
developing and transition economies working w/ them.
__________ - free trade agreement b/w US, Canada & Mexico (not an organization, no free flow of labor) vs. EU (the
European [economic] Union – an actual organization w/ the free flow of labor between member states).
Specialized Economic Zones
 In the Western Hemisphere, only ________ and ________
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have substantial manufacturing industries.
A major __________ manufacturing zone has developed in
northern Mexico just south of the border with the U.S.; an
extended ____________ district has allowed manufactured
products to be sent to the U.S. free of import ________.
They transform imported, ____-free components or raw
materials into finished industrial products; at least ____ of
the goods produced are re-exported to the U.S.
Although the maquiladora process began in the _____, it
didn‟t take off until the _____; today there are over 2,000
assembly plants employing over 600,000 workers,
accounting for >20% of Mexico‟s entire labor force.
Most maquiladoras are ________-owned, and are located in
northern Mexico due to low _______ costs, ease of ____________ to the U.S., __________ to major cities – not to
mention the Mexican gov‟t originally required them to be within 35 miles of the border.
Other factors explain why Mexico has emerged as an important location in the global system of industrial organization:
weak ______________ regulations; Mexico‟s relatively ________ government & their expanding ________ class (also
urbanization along with _________ labor); the rise of _______________ corporations (and the exploitation of less
developed countries – the ____-________ model); the U.S. shift to a ________ economy (outsourcing of manufacturing);
the _______ ___________ _____ ______ __________ (NAFTA: 1994) – free-trade area b/w the U.S., Canada & Mexico.
________ has also established these districts in cities like ________ (near Hong Kong) & ________ (largest city).
______ ____________ ____________ – risen in the core; network of research, development & technological enterprises
(Silicon Valley, Boston); often thought to be ________ free & positive for the community.
Tourism: A Service Industry Giant
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Many developing countries look to ______________ to
improve their economy, others focus on ______________ …
 __________ (a service industry giant) is yet another means
by which countries are seeking to develop; tourism & travel
= 11% of all global jobs, and 11% of global GNP (~$4
trillion/yr.)
 The initial _____________ by the “host” country is huge
(i.e. building hotels diverts money that could be used for
housing, education, …); many hotels are owned by MNCs,
NOT the “host” country; affects the _______ economy little.
 Tourism has ____________ the distinctiveness of the
cultural landscape (more homogeneous) – hotels, fast food
chains, resorts, _______ parks, and ____________
degradation (litter, pollution, effects on wildlife).
Tourism has ____________ the distinctiveness of the cultural landscape (place preservation, uniqueness & marketing) –
preservation of ________ buildings; sustaining ____________ lifestyles; promotion of exotic scenery & wildlife
(____________); conservation of natural resources (mostly for commercial reasons – for tourism industry).
Time-Space Compression & Its Impact
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______-_______ _____________ - refers to the social and psychological effects of living in a technologically advanced
world; the world is more complicated, yet at the same time may seem to be __________.
Time-space ______________ – refers to the greatly accelerated movement of goods, ideas, and information during the
20th c. made possible by tech. innovations in transportation & communication.
The world is transitioning away from ________ industrialization to a faster, more flexible system (lean production) that
has opened new markets & brought places “closer together” – the ________ _______ ______ assists this.