Industry » Industrial change and high-tech industries

What you'll learn this session

Study time: 30 minutes

The causes and patterns of industrial change in developed countries
The growth and characteristics of high-tech industries
The factors affecting the location of high-tech industries
Case studies of high-tech industrial regions
The impacts of industrial change on people and places

Industrial Change in Developed Countries

Over the last few decades, the industrial landscape in developed countries has transformed dramatically. Traditional manufacturing has declined while new, technology-based industries have grown. This process is known as industrial change or deindustrialisation.

Key Definitions:

Deindustrialisation: The decline in the importance of manufacturing industry in a country's economy.
High-tech industry: Industries that use advanced technology and employ highly skilled workers, often involved in research, development and innovation.
Industrial inertia: The tendency for industries to remain in their original locations despite changes in the factors that influenced their initial location.

📈 Causes of Industrial Change

Economic factors:

Globalisation allowing companies to relocate to countries with lower costs
Increased automation reducing the need for large workforces
Rise of the service sector creating new types of jobs

Political factors:

Changes in government policies and support for different industries
Trade agreements affecting international competition
Environmental regulations increasing costs for traditional industries

📊 Patterns of Industrial Change

Spatial changes:

Decline of traditional industrial regions (e.g., rust belts)
Growth of new industrial spaces near universities and transport hubs
Shift from inner-city locations to suburban science parks

Sectoral changes:

Decline in heavy industries like steel, shipbuilding and coal mining
Growth in electronics, pharmaceuticals and digital technologies
Increase in knowledge-based and creative industries

High-Tech Industries: Characteristics and Growth

High-tech industries represent the new wave of industrial development in developed countries. They differ significantly from traditional manufacturing in their operations, workforce requirements and locational preferences.

Key Characteristics of High-Tech Industries

💻 Research-Intensive

High investment in R&D, often spending 10-15% of revenue on innovation. Close links with universities and research institutions. Continuous product development and improvement.

🎓 Skilled Workforce

Employs highly educated workers including scientists, engineers and technicians. Requires ongoing training and skills development. Higher wages compared to traditional manufacturing.

🚀 Fast-Changing

Rapid technological change and short product lifecycles. High risk but potentially high rewards. Adaptability and innovation are essential for survival.

Types of High-Tech Industries

Information Technology: Software development, computer hardware, telecommunications
Biotechnology: Pharmaceuticals, genetic engineering, medical technology
Advanced Manufacturing: Robotics, aerospace, precision engineering
Green Technology: Renewable energy, sustainable materials, environmental monitoring
Digital Services: E-commerce, fintech, digital media

Location Factors for High-Tech Industries

High-tech industries have different locational requirements compared to traditional manufacturing. Their choices of where to locate are influenced by several key factors:

🌐 Access to Knowledge and Talent

Proximity to universities for research collaboration and graduate recruitment
Skilled labour pool with technical expertise and qualifications
Knowledge spillovers from clustering with similar companies
Quality of life to attract and retain talented workers

📶 Infrastructure and Connectivity

High-speed internet and reliable telecommunications
Transport links including international airports
Quality office space and purpose-built facilities
Support services like legal, financial and marketing expertise

Other important factors include:

Government support: Tax incentives, grants and supportive policies
Venture capital: Access to investment funding for start-ups and growth
Agglomeration economies: Benefits from clustering with similar businesses
Pleasant environment: Attractive surroundings that appeal to skilled workers

Case Study: Silicon Valley, USA

Silicon Valley in California is the world's premier high-tech region, home to companies like Apple, Google and Facebook. Its success factors include:

Proximity to Stanford University and UC Berkeley, providing research expertise and talented graduates
Established venture capital networks funding new start-ups
Culture of innovation and entrepreneurship with high tolerance for risk
Clustering effect creating knowledge spillovers between companies
Pleasant climate and high quality of life attracting global talent
Strong infrastructure including San Francisco International Airport

However, challenges include extremely high housing costs, traffic congestion and increasing inequality between tech workers and others.

Case Study: Cambridge Science Park, UK

Cambridge Science Park was established in 1970 by Trinity College and is the UK's oldest science park. Key features include:

Direct links to Cambridge University's world-class research
Over 100 companies employing more than 7,000 specialists
Focus on biotechnology, pharmaceuticals and IT
Purpose-built facilities with room for expansion
Good transport links to London and international markets
Government support through the "Cambridge Phenomenon" recognition

The park demonstrates how university-industry collaboration can drive high-tech growth in smaller cities.

Impacts of Industrial Change

The shift from traditional manufacturing to high-tech industries has created both positive and negative impacts on people and places:

👍 Positive Impacts

Economic growth in regions that successfully attract high-tech industries
Higher-paying jobs for skilled workers
Environmental improvements as polluting industries decline
Infrastructure upgrades to support new industries
Regeneration of former industrial areas into modern workspaces
Enhanced international reputation for innovation

👎 Negative Impacts

Unemployment in traditional industrial areas
Skills mismatch between available jobs and worker qualifications
Regional inequality between growing and declining areas
Housing affordability issues in successful high-tech regions
Loss of community identity in former industrial towns
Social polarisation between high and low-skilled workers

Managing Industrial Change

Governments and communities can take steps to manage the transition to high-tech industries:

Education and retraining to help workers adapt to new job requirements
Investment in infrastructure to attract high-tech companies
Regional development policies to spread growth more evenly
Support for small businesses and start-ups in emerging sectors
Preservation of industrial heritage to maintain community identity
Affordable housing initiatives in high-growth areas

Summary: Key Points to Remember

Industrial change involves the decline of traditional manufacturing and the rise of high-tech industries
High-tech industries are research-intensive, employ skilled workers and experience rapid technological change
Location factors for high-tech industries include access to universities, skilled workers, good infrastructure and quality of life
Silicon Valley and Cambridge Science Park are examples of successful high-tech regions with different scales and characteristics
Industrial change creates both winners and losers, with some regions and workers benefiting while others face challenges
Effective management of industrial change requires education, investment and supportive policies