Information Technology (IT) Industries in the S4-5 Geography Curriculum

Dr. Becky P.Y. Loo

Associate Professor

Department of Geography, HKU

Information Technology (IT) Industries in the S4-5 Geography Curriculum

What?

Where?

Why?

How?

Conclusion

What?

• Generate, process and exchange information

What is information technology?• Desktop computer?

• MP3?

• Mobile phone?

• Telephone line?

• Electronic dairy?

• E-mail account?

• Radio?

• Oral face-to-face contact

• Simple pictorial presentation

• Late 19thC and early 20thC• Mechanical, electromechanical

• Early electronic technologies

• Computer +

Old IT

• Printing:

• After the 1950s

• Microelectronic technologies

• Written language

• e.g. typewriter, camera, telephone, telegraph

• e.g. computers, robots, fibre optics

Telecommunications

New IT

Convergent IT

generate & process

exchange

e.g. paper, ink, printing press

What are information technology industries?

• Information technology sector (Norton, 1999)• Large computers• Personal computers• Software• Semiconductors• Semiconductor equipment• Communications• Medical technology (biotechnology & instruments)

• Standard Industrial Classification (SIC) (1972) (Varga, 1999)

Information technology

357 Office computing and accounting machines

361, 3825 Electrical transmission and distribution equipment

365 Radio and television receiving equipment, except communication types

366, 367 Electronic components and accessories, communication equipment

Where?Global level

National level

Sub-national level

N. America? Africa? Europe? Asia?

USA? Mexico? Germany? Yugoslavia? Japan? Burma?

Silicon Valley? Hollywood? Munich? Berlin? Tokyo? Sendai?

IT industries are highly localized atdifferent spatial scales.

• 3,400 square km• Flanked by the Coastal Range• Valley: 1/3 of the total area• Spanish colonizers in the

late 1700s• Agrarian economy

• San Francisco Bay

• Santa Clara county

Case study: The silicon valley

1930s• Prof. Frederick Terman, Electrical

Engineering, Stanford University

• Setting up commercial enterprises with professional knowledge

1940s• No. 15 most productive agricultural counties in US

• 1/3 of California’s annual crop of plums, cherries, pears & apricots• Stanford Research Institute

1950s

• WWII and the outbreak of Korean War

• Federal funds for electronics research and development

• War-related aerospace and electronics enterprises• Stanford Industrial Park, Stanford Research Park

• 1950-1954:

Military prime contracts to California $13 billion 14% of US total

1970s

1960s

• Department of Defense’s electronics-based programs

• Throughout the entire Cold War period

• Large supply of scientific and engineering manpower

Distinguishing characteristics at early stages:

• Over 40,000 new jobs a year • “Right place to be”

• 1 new jobs • 2-3 new jobs in other sectors

• Federal defense and aerospace contracts as huge markets

• Easy access to venture capital in San Francisco

• Multiplier effect

1980s

• Population: 1.25 million

• World’s most intensive complex of high-tech activity

Electronics Employment

Hi-tech in total employment of the Silicon Valley:

1959

1965

1970

1975

1980

1985

9.7%

20.9%

39.5%

55.7%

69.8%

78.9%

• Computers, other office machines, communications, semiconductors, other electronic components, missiles/parts, instruments, drugs, software/data processing, IC labs, electronic wholesale, computer wholesale

Open Windows of Locational Opportunities1. Discontinuity nature

2. Innovative milieu … ability to create favourable production environment.

3. Chance … importance of generic, as opposed to specific factors of production

Away from old centres

Lack of favourable factors not important

Widely range of suitable areas

Why?

Three reasons for localized knowledge

1. Nature of the innovation process

a) Incremental reduction of technical and economic uncertainty

Technical feasibility

Market acceptability

creation and accumulation

• Formal and informal networks for knowledge exchange

Trial and error approach

Innovative milieu

Web of relationship

Material elements

c) Face-to-face contacts in the exchange and creation of new knowledge

Informal channels

Tacit knowledge

Direct observation of products and production process

b) Continual interaction between related firms

Joint development work

Sensitive information

Immaterial elements

Institutional elements

2. Barriers to spatial diffusion

• Geographical inertia

• Limited mobility of physical, human & social capital

Speed Costs Led time

3. Tapping

• Outside resources

• PeopleFirms

Capital

Ideas

Technology

Patents

By outsiders• “Right

place to be”

By incumbents• Role of

TNCs

1.1. Nature of the innovation processNature of the innovation process

Case study: Silicon ValleyCase study: Silicon Valley

1930s-1940s• Not particularly strong

• Stanford University• Other Universities: e.g. MIT in engineering • Other commercial clusters: e.g. laboratories of IBM, Bell …

1960s

• Stanford UniversityStanford University

• Local laboratorieslaboratories recruiting nationallyrecruiting nationally

• SRI, NASA’s Ames Research Center, IBM, ITT, …

• Unusually high degree of interactionsinteractions

• PhD degree• Part-time honours programmes

• Important to small firms and young semiconductor industry

• Industry-university research sharing and seminars

2. Barriers to spatial diffusion

• Supplies of specialized inputs and services

• Physical capitalPhysical capital

• Photomasks, testing jigs, chemicals, silicon and special production equipment

• Human & social capitalHuman & social capital

• Highly desirable lifestylelifestyle (creation of social & cultural milieu)

• Social statusSocial status

• Switch jobsSwitch jobs without relocating

• Recreational opportunities

• Suburb lifestyle

• Horse owners

3. Tapping

Young scientistsYoung scientists from all over the country

• Outside peoplepeople

• To land jobsjobs

• To start their own firmsfirms

• Local industry liberally financed with venture capital

• Outside technologytechnology• New firmsfirms

• Inflow of capitalcapital

• Success of Fairchild

• Financial supportFinancial support from San Francisco

• A large pool of wealthy individuals and families with

discretionary incomes

• ManagementManagement consulting house

How?

“ Post-Fordism”

• Specialized production

• Flexibly deployed (increasingly non-union) labour

• Flexible machines

• External economies of scale

• Agglomeration economies

• Spatial division of labourSpatial division of labour

• Vertical disintegration within each product group

Flexible production

Less-developed countries Developed countries

Less-developed countries Developed countries

• Transformation within the capitalist economy

Labour-intensive industries Capital-intensive industries

Low-technology components/process

High-technology components/process

Stages 1 – 3 Stages 1 – 3

Stages 4 – 6 Stages 4 – 6

1. Different stages do not need to be in geographical proximity

• High-level scientific, technical & engineering personnel

• Low-skill labour, female

• Pure production environment

• Suitable utilities

• Pure water supply

• Waste disposal facilities

• Clean environment

3. Differential impacts of technological change on different stages

Which stage is the most profoundly affected?

• Increasingly capital- & research- intensive

Which stage is the most mobile?

• Stage 5 -- Assembly & packaging

• Stage 3 – Wafer fabrication

How much money is required?

• New lithographic

techniques

• Automation

2. Low weight-high-value characteristics

• Low-labour cost areas

• Rise of the “fabless” semiconductor firms

1960s1960s

Early 1970sEarly 1970s

Early 1980sEarly 1980s

Late 1980s Late 1980s

19961996

• Roughly 2 millions

• USA in 1980s

• Design house, product design and development

• Raw wafer manufacturing

• 15 – 20 millions

• 50 – 75 millions

• 150 millions

• 1 billion to 2 billions

• Quality assurance, marketing, sales, customer support, testing

• And wafer fabrication subcontracted to outside firms

• Chip assembly

1

4 6

22 33 55

In-house

Contract out

Conclusion

• One of the many approaches

• Industrial geography is always changing

• Some major trends and characteristics

• Information sharing vs teaching kit guides