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Economic Geography 1

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					ECONOMIC GEOGRAPHY
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Economy and geography Economy, space and time A) Economic spatial theories B) Growth and development theories Economy and ecology Globalization as a consequence of technological change Summary and discussion

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Economic Geography 1
Economy and geography

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What is “economy”?
 Oikos

= house, household  Provisions for the house  Related to goods, objects (especially material)  Cycle of materials (from raw materials to a finished product)  Profit

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Elements of definitions
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Production and distribution of goods  Production in order to satisfy a demand  Balancing the demand for goods with the supply from a limited stock of resources  Produce for one„s own needs (subsistence)  Produce for the needs of others (surplus)

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What is “geography“
 Spatial

science  Structures and processes  SPACE and TIME

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Economic geography is ...
… a geography of man's struggle to make a living. As such it should concern itself with the production, use and reproduction of the social and material conditions of man's existence. In fact economic geography is firmly asocial. Emphasis has traditionally been placed upon the production and the use of the environmental and man-made material conditions of existence. (Lee, Dict. Human Geography)
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Where do we place economic geography ?
Environmental science Economics

Cultural geography

Social sciences, humanities
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Work – work?
 Associated

with the economy

 Activity
 Remunerated?  Pleasure A

and satisfaction?

chore?

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A typology of work
Activities
Free time Work

Unremunerated

Remunerated
„Grey‟ economy Illegal activities Legal activities

Household

Voluntary „economy‟

Formal economy

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Views of the economy
 Investor:

profit, shareholder value  Entrepreneur: a challenge  Employee: a job, a salary  Citizen: almighty power  Politician: source of income and influence  Geographer ?  see next
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A modern view of the economy
A

complex system  Human activities, based on rational and irrational decisions  Limited predictability  Embedded in the natural environment  Part of the social environment  Directed by changing perceptions
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The future economy in a twofold dilemma
Soft technologies

Solidarity

?

Egoism

Hard technologies

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The future economy and sustainable development
• Sustainable development means to guarantee that future generations can continue to live on this earth. • This implies that we take care of the basic requirements of the ecosystem (the basis for all human existence on the planet). • Which way leads to an economy that has the potential to guarantee the survival of mankind over a long period? • Can technology alone achieve this goal?

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The 3 economic sectors
Classification of the economic activities:  Primary sector: preparing the raw materials  Secondary sector: transforming the raw materials into manufactured products  Tertiary sector: ensuring the functioning of the economy

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The dynamics of the three sectors (Fourastié model)
Tertiary

%

Secondary
Primary

time

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Characteristics of the sectors
 Primary

sector: agriculture, forestry, hunting, gathering, fishing, mining  Secondary sector: manufacturing, construction work  Tertiary sector: „all the rest‟ – but in a highly differentiated way

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The tertiary sector
 Always

present, but in 20th century growth in importance and differentiation  Comprises a variety of activities that demand different skills, are of unequal importance for various human groups and has both a public and a private side  Can be classed according to a choice of perspectives

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Possible definitions of the tertiary sector (A. Bailly)

Public, non competitive
Archaic/traditional Common Production-oriented Management

Private, competitive
Modern Rare Consumer-oriented Service
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General comment
 The

T-sector is more complex than the P- and the S-sectors as it finds itself in a mediating position: both P and S require services  We use all forms of the T-sector, but at different times and with varying frequencies

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Specific comment
 Public/private:

self-explaining  Archaic/modern: bound to history (preindustrial vs. post-industrial)  Common/rare: self-explaining  Production/consumer-oriented: services for firms vs. services for households  Management/service: self-explaining; service = executing, not directing
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Dimensions of the T-sector
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The Bailly classification shows the breadth of the service domain  Traditional classifications use six groups of activities: administration, trade, finances, education, communication, health  They have to be confronted with the entire breadth to show a clear picture of this field  This yields 60 combinations – clearly too much for a simple classification!

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2-dimensional T-sector
Pub Pri ADM TRA FIN EDU COM HEA Arc Mod Com Rar Pro Con Man Ser

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Informal economy
 Activities

that are legal as such but not bound to formal places and installations (street vendors, street musicians)  They offer a service close to the passerby who is a potential customer (e.g. the hairdresser or the dentist on the roadside in India)

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Illegal („black‟) economy
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Activities that are forbidden by law (drug dealing)  Activities that are legal as such but are exercised under specific conditions: - illegal workers (low salaries, no social security, exploitation) - Saturday and Sunday work for friends that are not declared (no taxes and social security premium paid)  Such activities are pursued by the state
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The clandestine economy
Being an „underground„ field, there are no official figures on its share of the GDI  Estimates (1980s): - US 13-14 % - Italy 10-25 % - England 7-8 % - Switzerland 3-5 %  Figures are subject to change according to knowledge and investigation
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