Lecture 6
International Division of Labor
International Division of Labor: the Definition
International Division of Labor (IDL) is the specialization of functions and roles involved in production. Division of labor is closely tied with the standardization of production, the introduction and perfection of machinery, and the development of large-scale industry. Among the different categories of division of labor are
1) territorial, in which certain geographical regions specialize in producing certain products, exchanging their surplus for goods produced elsewhere;
2) temporal, in which separate processes are performed by different industrial groups in manufacturing one product, as the making of bread by farmers, millers, and bakers;
3) occupational, in which goods produced in the same industrial group are worked by a number of persons, each applying one or more processes and skills. Modern mass-production techniques are based on this type.
On the whole countries benefit from IDL. The example of Japan and Newly Industrialized Countries (NICs) with their limited natural resources is a clear confirmation of this fact.
There are some factors IDL depends on:
1) geographical and climatic differences
2) historical traditions of production
3) international politics
4) transport networks
Transport Networks as a Factor of IDL
IDL depends upon the transport networks, basically upon sea transport. So let’s focus on the largest ports, busiest channels and canals.
The largest ports involved in IDL are:
1. Port of Antwerp
2. Port of Bilbao
3. Port of Boston
4. Port of Busan
5. Port of Charleston
6. Port of Chicago
7. Port of Dubai
8. Port of Felixstowe
9. Port of Halifax
10. Port of Hamburg
11. Port of Hong Kong
12. Port of Houston
13. Port of Incheon
14. Port of Kobe
15. Port Klang
16. Port of Long Beach
17. Port of Los Angeles
18. Port of Montréal
19. Port of Mumbai
20. Port of Mundra
21. Port of New York/New Jersey
22. Nhava Sheva (Near Mumbai, India)
23. Port of Rotterdam
24. Port of Seattle/Port of Tacoma
25. Port of Shanghai
26. Port of Shenzhen
27. Port of Singapore
28. Port of Vancouver
29. Port of Vigo
The world's busiest port is contested by several ports around the world, as there is as yet no standardised means of evaluating port performance and traffic. Most keenly fought over this for the past decade the Port of Rotterdam and the Port of Singapore, with both ports claiming the busiest port title. The former, however, based its measurement on cargo tonnage handled (total weight of goods loaded and discharged), while the latter ranks in terms of shipping tonnage handled (total volume of ships handled). Since 2005, the Port of Shanghai has exceeded both ports to take the title in terms of total cargo tonnage.
The following ports have variously made claims (or had claims made for them):
· Port of Shanghai, People's Republic of China
The world's busiest port by cargo tonnage for the first time in 2005.
· Port of Singapore, Singapore
The world's busiest port by shipping tonnage since 1986, and was the world's busiest container port twice in 1998 and 2005. It also continued to be the world's busiest transshipment port. It was the busiest by cargo tonnage until overtaken by Shanghai in 2005.
· Port of Rotterdam, Netherlands
Was the world's busiest port by cargo tonnage for many years until it was first overtaken by Singapore, and then by Shanghai.
· Port of Hong Kong, People's Republic of China
Hong Kong was the World's busiest container port from 1992 to 2005.
There are some international channels and canals involved in IDL:
Босфор
Дарданеллы
Скагеррак
Каттегат
Большой и Малый Бельт
Эресунн (Зунд)
Баб-эль-Мандебский
Малаккский
Сингапурский
Зондский
Каримата
Полкский
Тайваньский
Корейский
Мессинский
Тунисский
Ормузский
Пролив Цугару (Сангарский)
Мозамбикский
Магелланов пролив
Пролив Дрейка
Гудзонов пролив
Берингов пролив
Пролив Бонифачо
Флоридский пролив
Торресов пролив
Каналы:
Суэцкий
Панамский
Кильский
New Trends in IDL
Before the 1950s, foreign private capital was invested mainly in public services, mining, agriculture, and petroleum. Excluding petroleum, in all other sectors, foreign investment has declined substantially, while increasing dramatically in manufacturing and such related services as banking, marketing, mass media and advertising. The reorientation in the activities of Transnational Corporations (TNCs) represents the reorganization of the international economy and the emergence of a new international division of labour.A multinational corporation (MNC) or multinational enterprise (MNE) or transnational corporation (TNC) or multinational organization (MNO) is a corporation or enterprise that manages production establishments or delivers services in at least two countries.
The new model of IDL is structured around the large manufacturing TNCs, based upon government contracts - especially in armaments and space exploration. The largest TNCs are mainly in industrialized countries. TNCs develop a) new products; b) new ways of producing these products; c) the machinery and equipment needed to produce them; d) the synthetic raw materials and the intermediate products necessary for their production; e) the advertising needed to create and activate their markets; and f) the subsidiaries, joint ventures or licensing arrangements.Therefore, both the import-substituting and the export-promoting strategies of industrialisation are part of the TNC's strategy of penetration onto foreign and their own domestic markets. So a new form of international division of labour appears - the international manufacturing oligopoly.List of multinational corporations
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International economic integration has been the major tendency in IDL development since the past decades.
The most active regional blocs involved in IDL are (Наиболее активные интеграционные объединения, вовлеченные в международное разделение труда, следующие:)
European Union (EU)
· full members: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom