10.1 Economic geography of North America
4 min read•august 15, 2024
North America's economic activities are unevenly spread across the continent. Factors like history, resources, transportation, and shape this distribution. The shows a dense, advanced core from the Northeast to Midwest, with less developed peripheral regions.
are crucial economic hubs, while like highways facilitate movement. , , , and policies influence . Trade agreements like and have reshaped North America's economic geography, impacting trade and production patterns.
Economic Activities Across North America
Uneven Distribution and Influencing Factors
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- North America's economic activities are unevenly distributed across the continent, with concentrations in specific regions and urban centers
- Factors shaping this spatial distribution include history, resource availability (oil, minerals), transportation networks (interstate highways, Trans-Canada Highway), and government policies
- The core-periphery model can be applied to North America
- Core region extends from the Northeast to the Midwest, characterized by high population density, advanced infrastructure, and a concentration of high-value economic activities (finance, technology, specialized manufacturing)
- Peripheral regions (, , parts of the South) have lower population densities, less developed infrastructure, and a greater reliance on resource-based industries (agriculture, mining, forestry)
Role of Urban Centers and Transportation Networks
- Urban centers play a crucial role in the spatial distribution of economic activities, serving as hubs for innovation, trade, and services
- Major metropolitan areas (New York, Los Angeles, Chicago, Toronto) are key drivers of and development
- The spatial distribution of economic activities in North America is influenced by transportation networks
- Interstate highway system in the United States and the Trans-Canada Highway facilitate the movement of goods, people, and ideas across the continent
Factors Influencing Regional Development
Natural Resources and Human Capital
- Regional economic development in North America is influenced by a complex interplay of factors
- Natural resource endowments (oil, gas, minerals, fertile agricultural land) have historically shaped the economic development of regions (American South, Canadian Prairies, )
- Human capital, including the education, skills, and expertise of the workforce, is a critical factor in regional economic development
- Regions with high concentrations of skilled labor and innovative industries (, in North Carolina) have experienced significant economic growth
Infrastructure and Government Policies
- Infrastructure (transportation networks, energy systems, telecommunications) plays a vital role in facilitating economic development
- Regions with well-developed infrastructure are better positioned to attract investment, support business growth, and connect to global markets
- Government policies (tax incentives, regulatory frameworks, investment in education and research) can significantly influence regional economic development
- Canadian government's support for the oil sands industry has driven economic growth in
- State-level policies have encouraged the growth of the technology sector in and
- , arising from the clustering of related industries and supporting services, can create self-reinforcing cycles of economic growth in specific regions (automotive industry in the Great Lakes region, entertainment industry in Los Angeles)
Trade Agreements and Economic Geography
Impact of NAFTA and USMCA
- Trade agreements (North American Free Trade Agreement (NAFTA), United States-Mexico-Canada Agreement (USMCA)) have had significant impacts on the economic geography of North America by altering patterns of trade, investment, and production
- NAFTA, implemented in 1994, created a free trade zone encompassing the United States, Canada, and Mexico, reducing tariffs and other barriers to trade
- Led to increased and cross-border supply chains, particularly in industries such as automotive manufacturing and agriculture
- Had mixed effects on regional economies, with some areas experiencing job losses due to increased competition and outsourcing, while others benefited from expanded market access and
Maquiladora Program and Agricultural Trade
- The allows foreign companies to establish factories in Mexico to take advantage of lower labor costs
- Led to the growth of manufacturing clusters along the US-Mexico border, altering the economic geography of the region
- Trade agreements have also influenced the spatial distribution of agricultural production
- Increased specialization and trade in products (corn, wheat, livestock) between the three countries
- The USMCA, which replaced NAFTA in 2020, introduced changes to rules of origin, labor standards, and digital trade
- Long-term impacts on the economic geography of North America remain to be seen but are likely to affect patterns of investment, production, and trade in the region
Natural Resources and the Economic Landscape
Agricultural Land and Energy Resources
- Natural resources have played a crucial role in shaping the economic landscape of North America, influencing the location and development of industries, cities, and regions
- The abundance of fertile agricultural land in the Great Plains and the Canadian Prairies has made North America a major producer and exporter of crops (wheat, corn, soybeans), shaping the economic geography of these regions
- The discovery and exploitation of oil and gas reserves (Texas, Alberta, Gulf of Mexico) have driven economic growth and shaped the development of energy-related industries and infrastructure in these areas
Mineral Resources and Forests
- Mineral resources (iron ore in the Great Lakes region, gold in California and the Yukon) have historically attracted settlement, investment, and industrial development, leaving lasting imprints on the economic landscape
- Forests in the Pacific Northwest, the Southeast, and parts of Canada have supported significant lumber and paper industries, influencing the economic geography of these regions
Water Resources and Regional Disparities
- The availability of water resources (Great Lakes, major river systems like the Mississippi and the St. Lawrence) has influenced the location of industries, cities, and transportation networks, shaping the economic landscape of North America
- The uneven distribution of natural resources has contributed to regional disparities in economic development
- Resource-rich areas often experience booms and busts tied to global commodity prices
- Other regions have had to diversify their economies to reduce their reliance on resource extraction
Key Terms to Review (27)
Agglomeration Economies: Agglomeration economies refer to the benefits that firms and individuals experience when they are located near each other in concentrated areas. This phenomenon enhances productivity and efficiency, as it fosters collaboration, reduces transportation costs, and encourages innovation due to the close proximity of resources, labor, and markets.
Agricultural trade: Agricultural trade refers to the exchange of agricultural products and food between countries or regions. This trade includes exports and imports of goods like grains, fruits, vegetables, livestock, and dairy products, playing a crucial role in the global economy. It connects producers to consumers, influences food security, and can significantly affect local economies and international relations.
Alberta: Alberta is a province in Western Canada, known for its rich natural resources and significant role in the country's economy. It is characterized by a diverse landscape that includes mountains, forests, and prairies, which contribute to its strong agricultural and energy sectors. Alberta's economy is heavily influenced by the oil and gas industry, making it a key player in North America's energy production and distribution.
Core-periphery model: The core-periphery model is a concept in economic geography that illustrates the spatial distribution of economic resources and development within a region, where the 'core' areas are characterized by high levels of wealth, technological advancement, and industrialization, while the 'periphery' regions often experience lower levels of development and economic opportunities. This model helps explain the uneven distribution of resources and how certain regions benefit at the expense of others, highlighting issues such as migration, trade, and globalization.
Economic disparities: Economic disparities refer to the unequal distribution of wealth, resources, and opportunities within and between regions, communities, or countries. These inequalities can be influenced by various factors, including historical context, governmental policies, and access to education and employment. Understanding economic disparities is crucial for analyzing how different regions develop and the socioeconomic challenges they face.
Economic growth: Economic growth refers to the increase in the production of goods and services in an economy over a specific period, often measured as the percentage increase in real gross domestic product (GDP). This concept is crucial for understanding how economies develop and evolve, as it reflects improvements in productivity, technological advancements, and the efficient use of resources. Economic growth can also indicate rising living standards and enhanced quality of life for a population, making it a key goal for policymakers.
Economic Integration: Economic integration refers to the process by which different economies become more closely linked through trade, investment, and the movement of labor. This phenomenon can lead to reduced barriers between economies, increased economic cooperation, and enhanced competitiveness on a global scale, impacting various aspects of economic geography, such as resource distribution and migration patterns.
Foreign direct investment: Foreign direct investment (FDI) refers to the investment made by a company or individual in one country in business interests in another country, typically by acquiring assets or establishing business operations. FDI is a vital component of globalization, influencing economic geography as it affects capital flows, job creation, and regional development.
Government policies: Government policies are the principles, regulations, and actions adopted by government authorities to guide decisions and achieve rational outcomes in various sectors, including the economy. These policies play a critical role in shaping economic landscapes, influencing market behavior, and determining the allocation of resources. The effectiveness of government policies can significantly affect economic development, trade patterns, and regional economic disparities.
Great Plains: The Great Plains is a vast region of flat land in North America, characterized by grasslands, prairies, and few trees. It stretches from Canada in the north to Texas in the south and is bordered by the Rocky Mountains to the west and the Mississippi River to the east. This region has significant agricultural potential and has shaped the economic landscape of North America through its rich soil and favorable climate for farming and ranching.
Gulf Coast: The Gulf Coast is a coastal region in the southeastern United States that borders the Gulf of Mexico, encompassing parts of Texas, Louisiana, Mississippi, Alabama, and Florida. This region is known for its rich natural resources, vibrant tourism industry, and significant economic activities related to shipping, fishing, and oil production.
Human capital: Human capital refers to the skills, knowledge, and experience possessed by individuals, which can be used to create economic value. This concept is crucial in understanding how education, training, and personal development contribute to economic productivity and innovation. It emphasizes the importance of investing in people as a way to boost economic growth, competitiveness, and overall societal well-being.
Infrastructure: Infrastructure refers to the foundational physical systems and structures that are necessary for the operation and growth of an economy, including transportation networks, utilities, and communication systems. It plays a crucial role in determining industrial location, supporting economic activities, and facilitating development by ensuring accessibility and connectivity.
Maquiladora program: The maquiladora program is a manufacturing initiative established in Mexico that allows foreign companies to set up factories and produce goods for export with reduced tariffs and taxes. This program has played a crucial role in shaping the economic landscape of northern Mexico, particularly along the U.S.-Mexico border, facilitating cross-border trade and employment opportunities while impacting local economies.
NAFTA: NAFTA, or the North American Free Trade Agreement, is a trade agreement implemented in 1994 between Canada, Mexico, and the United States aimed at eliminating trade barriers and promoting economic cooperation among the three countries. This agreement transformed the economic landscape of North America by fostering a more integrated market and enhancing trade flows, which has had lasting impacts on industries and labor in the region.
Natural Resources: Natural resources are materials or substances that occur in nature and can be exploited for economic gain, such as minerals, forests, water, and fossil fuels. They play a crucial role in shaping economic activities, regional development, and the sustainability of environments, influencing how economies grow and evolve over time.
Regional development: Regional development refers to the economic growth and improvement of living standards within a specific geographic area, often focusing on reducing disparities between regions. It encompasses various factors, including infrastructure improvements, investment in education and healthcare, and the promotion of local industries. The significance of regional development lies in its ability to enhance economic productivity and social well-being while addressing spatial inequalities.
Research Triangle: The Research Triangle is a renowned innovation cluster located in North Carolina, formed by the cities of Raleigh, Durham, and Chapel Hill. It is known for its significant concentration of research institutions, technology companies, and universities, which fosters a dynamic environment for knowledge-based economic growth and innovation. This area exemplifies how collaboration among academia, industry, and government can drive technological advancements and economic development.
Resource Allocation: Resource allocation refers to the process of distributing available resources, such as land, labor, and capital, in a way that maximizes efficiency and meets the needs of society. It plays a crucial role in shaping economic activities, influencing patterns of production, consumption, and trade, while determining how resources are utilized in different geographical contexts. Understanding resource allocation is essential for analyzing economic systems and spatial dynamics in various regions.
Rocky Mountains: The Rocky Mountains, commonly referred to as the Rockies, are a major mountain range in western North America that stretches from Canada down through the United States to New Mexico. This iconic range not only defines the landscape but also plays a crucial role in shaping the economic geography of the region through natural resources, tourism, and transportation routes.
Silicon Valley: Silicon Valley is a region in Northern California that serves as a global center for technology and innovation, particularly in the fields of software, hardware, and internet services. It's characterized by its concentration of high-tech companies, venture capital firms, and a culture that fosters entrepreneurship, making it a significant example of a knowledge-based economy and an innovation cluster.
Texas: Texas is the second-largest state in the United States, both in area and population, known for its distinct cultural identity and significant economic contributions. The state plays a vital role in the economic geography of North America, characterized by a diverse economy that includes sectors like energy, agriculture, technology, and manufacturing. Texas's unique geographic features, from vast plains to coastal areas, influence its economic activities and regional connections.
Trade patterns: Trade patterns refer to the established and recurrent ways in which goods and services are exchanged between regions, countries, or markets. These patterns can reveal much about economic relationships, dependencies, and the flow of resources, shaping the global economy. Understanding trade patterns is essential for analyzing economic geography as it highlights how geographic factors influence trade routes, the distribution of industries, and the interconnections between different economies.
Transportation networks: Transportation networks refer to the interconnected systems of infrastructure and services that facilitate the movement of people and goods across various geographical areas. These networks encompass roads, railways, air routes, waterways, and public transit systems, all of which play crucial roles in shaping urban dynamics, regional development, and economic patterns.
Urban centers: Urban centers are densely populated areas characterized by significant economic, political, and cultural activities. These areas often serve as hubs for commerce, industry, and services, attracting people from surrounding regions for employment and lifestyle opportunities. Their development is influenced by factors such as transportation networks, historical events, and economic policies.
USMCA: The United States-Mexico-Canada Agreement (USMCA) is a trade agreement that replaced NAFTA, aiming to enhance trade relations and economic cooperation between the United States, Mexico, and Canada. It introduces updated provisions related to labor standards, environmental protections, and digital trade, reflecting the evolving economic landscape of North America.
Washington: Washington refers to both the U.S. state and the capital city of the United States, Washington, D.C. As a state, Washington is located in the Pacific Northwest and is known for its diverse geography, including mountains, forests, and coastlines. Washington, D.C., on the other hand, serves as the political center of the nation, housing important government institutions and significantly influencing economic policies.