Industrial Location Theory is Dead: Part 3
Going Global
The wage cost of the domestic labour force and their
increasing militancy in the 20th Century caused companies to start
looking overseas for cheaper, less unionised workers. The improving
cost-efficiency of transport meant that these companies could pretty much look
anywhere in the world and their eyes alighted on the Less Economically
Developed Countries (LEDCs) which at the time included both India and China.
The huge workforce available meant that products could be manufactured very
cheaply, vastly undercutting domestic labour costs, and imported cheaply to the
UK.
Another major technological shift enabled the globalisation
of manufacturing in the 1950s: containerisation. It might not seem world
shattering at first, but the simple use of standard sized (2.4m x 2.4m x 3.0m)
boxes for transporting cargo meant that it could be pulled by lorries or trains
and transferred on and off enormous ships quickly and, consequently more
cheaply. The boxes could be stacked like Lego blocks and loaded quickly. This
meant that docklands like those in London’s East End, which had been the
beating heart of Britain’s global trading Empire, became obsolete almost
overnight. The new system meant that much bigger ships could be used and these
did not fit into the old docks and the journey up the Thames Estuary wasted
time. It made much more sense to use a custom built deep water port at
Felixstowe. The London Dockland’s huge extended labour force became superfluous
and expensive as one man in a crane could load the new cargo containers more
quickly: the turn-around time for a cargo boat was slashed from days to a
matter of hours.
