GEOG 1992: Human Geographies November 7, 2007. Concepts to Take Home What is the tertiary sector? What are services? Why is the tertiary sector geographically.

GEOG 1992: Human GeographiesNovember 7, 2007

Concepts to Take Home

• What is the tertiary sector? What are services?

• Why is the tertiary sector geographically significant?

• How is the tertiary sector affecting the nature of globalization?

• Should I worry that all high-paying business and tech jobs are going to India?

• How is the commodification of environmental responsibility affecting India?

“Everything you can’t drop on your foot”-or-

“intangible goods”

Distinctly separate from the primary (agriculture, fishing, mining) and secondary (manufacturing, construction) sectors.

Tertiary Sector/Services Sector:

Types of Services

• Consumer Services: for individual consumers

-retail, health, leisure & hospitality• Business Services: facilitate other

businesses-finance, insurance, real estate,

law, architecture, clerical, custodial• Public Services: security and protection for

businesses and citizens. -fed/state gov., local gov. (e.g.,

police, waste management)

Why do jobs increase or decrease in

different types of services?

Why is it useful to distinguish services from agriculture and

industry?

Tertiary Sector/Service Sector

• Is a component of economic theory• Is a key geographic concept

-Indicator of economic development -Key in theories of cities, towns, and regional development -Central Place Theory-Important dimension of globalization

Services as an Indicator of Development

• --2/3 of the world’s population works in the primary sector.

• --Services contribute over two-thirds of GDP in more developed countries, compared to less than one-half in less developed countries.

Percent GDP from Services, 2005

Central Place Theory

City-ness v.

Town-ness

How far would you travel for…

- a gallon of milk?-a new car? -a diamond ring? -Wal-Mart?

What might cause the hierarchy of Central Place

Theory to change? • New Technology• Population Shifts• Regional Differences in Economic

Growth

Globalization of Services

• What is Globalization?-inherently geographic

”a force or process that makes something worldwide in scope”

-process of rescaling:Increasing mobility of and decreasing

distance between capital, people, and information.

Globalization of Services

• General Agreement on Trade in Services (GATS) – a provision of the 1995 WTO Agreement

The GATS covers “any service in any sector”

• imposes uniform rules over the entire realm of countries’ service sector domestic policies…

Outsourcing of Services from the United States to India

• Business: 300,000 jobs/year

• Financial: 100,000 jobs/year

• Management: 30,000 jobs/year

Just as China has the world’s largest labor force engaged in manufacturing, India has the world’s largest labor force engaged in the service sector.

“According to the Bureau of Labor Statistics, programmer unemployment is "only" about 7% because the number of

programmers in the workforce has dropped by about 150,000 workers in the last three

years. 

This is an odd presumption since a record number of foreign programmers entered

the U.S. on nonimmigrant visas during this period - roughly another 100,000 in this

workforce category. 

Unless BLS expects us to believe that the bulk of these workers have been promoted

to managers - or retired to the south of France on dot-com stock options - then

there should be 800,000 programmers in the U.S. workforce - with only

550,000 currently employed. = 31% unemployment”

Thomas L. Friedman ‘The Secret of Our Sauce’ - 2004

I just read about a guy in America who lost his job to India and he made a T-shirt that said, `I lost my job to India and all I got was this [lousy] T-shirt.' And he made all kinds of money." Only in America, would someone figure out how to profit from his own unemployment. And that was the reason America need not fear outsourcing to India: America is so much more innovative a place than any other country.

‘Selling novelty T-Shirts is not a replacement for a decent paying job

with health benefits’ -2004

Are we going to lose all of our high-paying service jobs to

India?• The United States of America added 2

million jobs in 2005 – approx. half of which were in consulting & design, leisure, and health-care services.

• Most service jobs only can be done near the customer… there is a limit to the types that can be outsourced. Many services require handshakes & signatures!

• Recent reports from India show that call centers are difficult to staff due to reputation of severe health risks.

• India’s service labor is starting to ‘price itself out’

Clicker QuestionThe following statement best represents my opinion about the

outsourcing of service jobs to developing countries.

a) I feel that my post-college job prospects and long-term job stability are threatened by outsourcing and globalization.

b) No need to worry! America is a hotbed of innovation and an economic superpower. That we’ve lost these jobs does not affect my prospects of getting a good job when I graduate.

c) I don’t think my own prospects for employment will be affected, but I feel outsourcing is unfair to American citizens.

d) The world is changing so fast that I sincerely have no idea what I’ll have to deal with when I graduate.

How does the globalization of services affect India?

• Geographers Jan Nijman and Richard Grant – 2002

Globalization of services has transformed the geography of

India on multiple scales.• Presence of multinational

corporations transforms urban landscape, as did colonialization: There is once again a spatially demarcated foreign presence in Mumbai.

• Increasing gap between rich and poor observed on intra-urban, inter-urban, and intra-state scales.

Legacy of Colonialism in Mumbai

Grant & Nijman, 2002

Grant & Nijman, 2002

Hyper-Differentiation of Space: Mumbai

India and the CDM

• Clean Development Mechanism• Environmental responsibility,

…globalized by the UN-IPCC and the Kyoto Protocol

…commodified into a service and outsourced to India.

This unique service was devised by the UN specifically to alleviate India’s crushing poverty, but instead has contributed to the differentiation of landscape.

India ratified Kyoto Protocol 9 August, 2002

• India’s ratification qualified it to host CDM projects, thereby attracting foreign investment.

• 38 India projects in CDM pipeline in August 2005; by August 2006, there were 364;

• India insofar has attracted ~37% of all foreign investment via the CDM.

CDM is intended to decrease poverty.

• Increase in Agricultural Income (e.g. biofuels)

• “Pull Factor”… demand for non-agricultural employment tightens labor market and increases real wages in agriculture

• Wage Generation … construction, operation of projects.

• Technology Transfer

Wage Employment

• “[Wage generation programs] need to be focused on limited areas, where there exists large need for employment and labor supply” (Government of India, 2001)

• Insofar, CDM projects are concentrated in wealthier states, where the neediest states have fewest development projects (Sirohi 2007)

India and the CDM

• Sustainably generated electricity still is neither accessible nor affordable to those who need it most… in some states, 95% of rural households are without electrical connections

• India’s neediest do not have enough livestock to produce dung for biogas generators (4 cows/household)

• Rural poor will be denied access to fuelwood.

• Profitability of selling land to CDM reforestation projects and may lead to seizure of common property by select members of poor rural communities, thus further marginalization of the poor.

• Many reforested lands may be pilfered for firewood, negating their carbon sequestration role “leakage”

Social Costs of Afforestation

Conclusions: Globalization of Services

• Globalization of Services has detrimental effects in the first world: loss of job security and government tax revenue

• Globalization of Services has affected the differentiation of economic space in

India in a way that reflects both the history of imperialism and the gap between the developed and developing worlds.