Energy, Industry, and Global Trade: Key Concepts
Energy Sources
Renewable Sources: Hydroelectric, solar, wind, tidal, geothermal.
Non-Renewable Sources: Fossil fuels (gas, oil, and coal).
Factors Influencing Industrial Location
- Communication and Accessibility: Industries seek locations near bridges or highways to facilitate the movement of materials and workers.
- Land Availability and Price
- Market Proximity: Especially important for perishable goods, production should be close to processing or consumption points.
- Labor Cost and Quality
- Environmental Laws
- Financial Incentives: Governments offer incentives to attract industrial investments, especially from foreign companies.
Industry Defined
Industry is an economic activity focused on transforming raw materials into manufactured products.
Types of Industry by Production Stage
- Base Industries: First in the production process, transforming raw materials for other industries.
- Capital Goods Industries: Mid-process, using base industry products to manufacture production equipment for other industries.
- Consumer Goods Industries: Final stage, producing goods directly for public consumption.
Industry Classification
- Heavy Industry: Produces capital goods and basic products.
- Light Industry: Produces consumer goods.
Industrial Sector Growth
- Mature Sectors: Slow growth and low demand, typically traditional industries like metallurgy, shipbuilding, and textiles.
- Leading Sectors: Rapidly expanding sectors like biotechnology and telecommunications.
Industrial Revolutions
Industrial production emerged in the second half of the 18th century in England, using mechanisms and division of labor, leading to large-scale production and a significant economic and social change.
The Industrial Sector in the EU and Spain
Conditional Factors:
- Strong energy dependence on countries like Norway and Russia.
- Fundamental sector for the European economy (traditional industrial powers).
- Job creation.
- Contribution to GDP, although the sector is losing weight.
- Offshoring.
- Automation of manufacturing processes.
- Financial crises.
Industrial Location and Specialization
- Germany: Main industrial power in the EU, with sectors like pharmaceuticals, tires, automotive, and machinery.
- Textile and footwear sectors are often relocated to Eastern European countries with lower labor costs.
Public and Private Services
Public Services: Financed by state taxes, aiming to organize society without profit, distributed nationwide.
Private Services: Financed by private companies, aiming to satisfy needs and generate profits, usually concentrated in cities.
Commerce
Commerce involves activities that enable the exchange or sale of goods and services.
National Commerce
Commercial activities within a country’s borders.
- Wholesalers: Buy products directly from producers, purchase in bulk, and sell.
- Retailers: Sell products directly to consumers in smaller quantities.
International Commerce
- Imports: Products purchased from another country.
- Exports: Products made in one country and sold to another.
Balance of Trade
The difference between the value of imports and exports.
- Positive Balance: Exports exceed imports.
- Negative Balance: Imports exceed exports.
Global Trade
After World War II, exports increased significantly compared to imports, driving economic growth in many emerging countries.
World Trade Organization (WTO)
Established in 1995 to facilitate international trade, reducing trade barriers and tariffs, and eliminating practices like selling below production costs. It has also created trade blocs.
Trade Blocs
- Free Trade Area: No tariffs between member countries; trade with non-member countries is decided by each member state.
Main Axes of Global Trade
- USA and East/Southeast Asia: Trade between the USA, China, Japan, and South Korea is significant.
- EU and East/Southeast Asia: The EU trades with Asia (Japan, India, and South Korea), with China being the main partner.
Bioenergy and Primary Energy Sources
Bioenergy: Energy from biomass, recently living organisms, mainly plants.
Primary Energy Sources: Nuclear, fossil, and renewable sources (wind, solar, geothermal, hydropower).
Fossil Fuels: From decomposed plants and animals, containing carbon and hydrogen (coal, oil, natural gas).
Natural Gas: Primarily methane, found above oil deposits or in sedimentary rock.
Hydropower: Uses the natural flow of water to generate electricity.
Nuclear Energy: Released from the core of atoms through fission.
Base Industries
Provide raw materials and energy sources to other industries, selling directly to manufacturers.
Factors Influencing Industrial Location
Availability of raw materials, labor supply, and skilled workers.
Industrial Revolutions
First Industrial Revolution: Began in England (1750-1760 to 1820-1840), transforming human and animal labor into machinery.
Coke: A coal-based fuel used in iron ore smelting.
Second Industrial Revolution: Late 19th and 20th centuries, with rapid scientific discovery, mass production, and new resources.
Spanish Industry
Key sectors include food, transport equipment, electricity, motor vehicles, petrochemicals, chemicals, and metal products.
Balance of Trade
The difference between a country’s exports and imports, a key component of the balance of payments.