Chapter 12: Services. Chapter Outline

Transcription

1 Chapter 12: Services Chapter Outline Introduction. The service sector is inextricably linked to settlements, so the discussion of why services cluster where they do also introduces the concept of cities as central places, a discussion continued in Chapter 13. Case Study: Phoning the Help Desk. This case study covers the outsourcing of customer service call centers from the U.S. to India, where labor costs are a fraction of those in the U.S. and employees already speak English. Key Issue 1. Where Did Services Originate? Three Types of Services. Services can be broadly divided into consumer services (services primarily for individual consumers, including education), business services (services to other businesses), and public services (government employment excluding education). All employment growth in the United States since 1972 has been in services. Services in Early Rural Settlements. Consumer and public services were likely the first services, including services to bury the dead, religious services, education, and the manufacture of tools and clothing (treated here as services, not industries). Early public services probably included services to defend the settlement s territory and possessions. Business services probably included transportation services and producer services to help and regulate trade. Global Forces, Local Impacts: Services in the Recession. Financial and real estate services triggered the global recession in MDCs were more affected by the recession than those least connected to the global economy. Within the U.S., cities that were large real estate and financial service centers were hit harder by the recession than more peripheral cities. Services in Early Urban Settlements. The first ancient cities may have been in Mesopotamia. Ancient Ur, Athens, and later Rome were all centers of services more complex than those found in smaller rural settlements. Medieval cities represented an expansion of trade and increased liberty for residents compared to the life of rural serfs. Larger cities also provided public services for ruling lords and religions. Key Issue 2. Where Are Contemporary Services Located? Services in Rural Settlements. Rural settlements may be clustered or dispersed. Clustered rural settlements are the norm everywhere but North America and can have circular or linear forms. Religious, educational, and public services are part of the settlement. Clustered rural settlements were common in the U.S. northeast (New England) but elsewhere in the U.S. a dispersed settlement pattern became the norm. Great Britain also experienced increasingly dispersed rural settlements with the enclosure movement consolidating land to single owners. Services in Urban Settlements. Urban settlements can be differentiated from rural areas by their large size, high density, and social heterogeneity. These factors may mean that 71

2 urban areas provide more opportunity for anonymity, competition, and acceptance, or also the opportunity for social isolation. Urbanization is the increasing absolute number of people in cities and the increasing percentage of people in cities. MDCs are on average about 75 percent urban while LDCs are on average about 40 percent urban. Urbanization is increasing in LDCs but a portion of that increase is due to high natural increase rates, not economic factors. Key Issue 3. Why Are Consumer Services Distributed in a Regular Pattern? Central Place Theory. A central place is a market center for services. The market area of a particular service is determined by its range (the distance someone is willing to travel for that service) and its threshold (the number of people required to support that service). Market-Area Analysis. A particular service may be viable at a particular location if the area inside its range includes at least the threshold number of people. The gravity model predicts that the ideal location for a service is at the center of gravity of people, minimizing the average distance anyone has to travel to that service. Contemporary Geographic Tools: Locating a New Department Store. Department store chains must consider the number of potential customers within a 15-minute range of a proposed location. Hierarchy of Services and Settlements. Central place theory predicts that services and settlements follow a regular pattern. Small settlements have the fewest services. These settlements are within the market areas of larger settlements, which are in turn inside the market area of still larger settlements. In most developed countries settlements observe a rank-size distribution, where the nth city is 1/n the size of the largest. Not all countries follow this distribution, instead having a primate city, with its largest city much more than twice the size of the second-largest. Less developed countries do not display the rank-size rule, indicating that services are not well distributed and available to the entire population. Periodic markets may form on a weekly or other schedule where demand is not sufficient to maintain a permanent market. Vendors travel from market to market and locals take a day to sell their products at these markets. Key Issue 4. Why Do Business Services Cluster in Large Settlements? Hierarchy of Business Services. The type of business services available in a city can be used to classify it in a hierarchy of four levels with subdivisions. The highest-order business services cluster in the most important cities, called world cities, which also contain other specialized services. World cities are centers of financial services and related legal and accounting services. Consumer services with the largest thresholds and longest ranges, such as luxury retail and libraries, museums, and theaters, are also found in world cities. World cities are frequently national capitals and thus contain many high-order public services. World cities may be subdivided into dominant, major, and secondary categories. Below world cities are command and control centers, which are important centers for services at a more regional scale. Command and control centers are subdivided into regional and 72

3 sub-regional levels. Specialized producer-service centers have less breadth of services than command and control centers, instead serving as a node for a particular industry, government (such as a state capital), or educational institution. Finally, dependent centers are lowest in the hierarchy and as implied by their name reliant on decisions made at higher levels of the hierarchy. Business Services in LDCs. LDCs specialize in offshore financial services and backoffice functions. Some LDCs have privacy laws and low tax rates which make it attractive to citizens or companies in MDCs to conceal assets in the LDCs financial institutions. Back-office services represent the outsourcing of service jobs previously performed at a company s home office and are made possible because of inexpensive communications. Economic Base of Settlements. Settlements depend on basic industries to provide income which in turn supports consumer services in the settlement. Many U.S. cities are specializing in the provision of consumer and business services. Talent is not distributed evenly among cities in the U.S. Instead, concentrations of talent are associated with those cities exhibiting the greatest cultural diversity. Introducing the Chapter Students will have a familiarity born of direct experience with many jobs in this sector, thus, it does not warrant as lengthy an introduction. Try the following icebreaker to stimulate discussion and approach central place theory in a roundabout way: Icebreaker: Central Places Choose three close-together (within 100 miles of each other) towns: the one your school is located in and two others so that the relative sizes are at least 1:5:25 (each town is at least five times the size of the next). Give students an overview of each town and the population size so they are familiar. Now ask the following: Which towns would be likely to have a gas station? fast-food restaurant? general practitioner? shopping center? shopping mall? movie theater? theater for plays or performances? professional piano tuner? lawyer for traffic court? neurosurgeon? thrift store? lawyer for international litigation? luxury fashion shop (e.g., Fendi, Prada, Versace)? etc. 73

4 The examples will lead students to the obvious answer that the more specialized services will be located in the larger city, while the basic services will be found in every town. However, students will probably not have considered why this pattern is so predictable. You could go back through the list and ask which services are more or less specialized to reveal this, or simply begin a discussion of threshold and range. Challenges to Comprehension Range vs. Threshold Though both elementary concepts, students do not always grasp the difference between them. Here is a way to explain the distinction by comparing high-range services and high-threshold services: High-range services are specialized enough that people will travel great distances to use them. Because they are high-range, their range by default includes a large population (all the people within the range are potential customers). However, many services are so specialized that a low percentage of the people within their range will use the service. Examples include specialized medicine, some artists, or specialized producer services. High-threshold activities can have low ranges, but need a large population to support the business. People would not travel very far for the service, so the service locates central to large populations. Examples include superstores, malls, and fast-food restaurants. False Hierarchies Students may assume that since services are presented as the tertiary sector of the economy, service jobs are intrinsically more valuable than those in the primary and secondary sectors. Disabuse them of this notion by pointing out that service jobs include low-paid, low-skill jobs like housekeeping and restaurant work. On the other hand, some students may feel that workers in the first two sectors are the ones doing real work, especially if they work in those sectors. Discussions of this topic can create debates about worker productivity, Marxism and capitalism. Assignments Review/Reflection Questions Make a list of the service jobs you ve had, and identify each by type according to the text. Describe the type of job you re hoping to start after college. Is it a service? What does this, combined with your previous answer, tell you about the range of service jobs? Would it be difficult to do well at the job you ve described above if you lived in a very small town? Use the concepts of threshold, range, and central place theory to describe why high-paying jobs are easier to find in large cities. 74

5 Present the reasoning of a person who chooses to live downtown, near the central business district (CBD). Answer as though you re explaining to a friend why you chose to live there. Reference concepts from the text in your answer. Now present the reasoning of a person who chooses to live in the suburbs while they work in the city. Again, answer as though you re explaining your decision to a friend and reference concepts from the text. Coordinate Questions Look at the following coordinates and describe the settlements using the text s terminology N, E [Linear, clustered rural settlement with canals in the Netherlands] N, E [Clustered rural settlement in Togo] 9.26 N, W [Clustered, planned rural settlement in Venezuela] S, W [Clustered rural settlement in steep mountains, Peru] N, 98.9 W [Dispersed rural settlement, Oklahoma, U.S.] Resources U.S. Department of Labor Bureau of Labor Statistics This web site provides enough statistics on labor and industry to last a lifetime: There are detailed statistics on labor, job markets, inflation, productivity, unemployment, and much more. U.S. Census Bureau Service Annual Survey This website details statistics (some collected quarterly) on employment in the service sector. This site includes definitions of each service industry (type), detailed data on each type, and the survey forms used to collect the data. Connections between Chapters Back to Chapter 11 As industrial jobs are lost to higher productivity or simply offshored, service jobs represent the majority of job growth in the developed world. Technology and efficiency has been able to create site and situation factors which allow some jobs to move, but many services are location-specific to where the market is. 75

6 However, an excellent example of the rapidity of this change is the increasing number of North Americans (though still very small) who travel to places as far away as India for surgery or other healthcare to save medical costs. Not even doctors jobs are completely safe in the global marketplace! Forward to Chapter 13 This transition is nearly seamless since Chapter 12 already introduces the fact that settlements and services occur together. With earlier discussions of central place theory and the hierarchical organization of settlements, students should be prepared to delve deeper into urban geography. 76