Economic geography facts for kids

Economic geography is a part of human geography that looks at how people make and use money, and what affects these activities. It also studies how businesses and people are spread out across the world. Think of it as a mix of geography and economics.

This field explores many interesting topics. It looks at why factories are built in certain places. It also studies how transportation works, how countries trade with each other, and how cities grow. Economic geography also examines how the environment and the economy are connected, and how globalization changes everything.

How We Study Economic Geography

People study economic geography in many different ways. Some researchers, like those who follow Alfred Weber's ideas, focus on where industries should be located. They often use numbers and data to figure this out.

Since the 1970s, new ways of thinking have changed the field. Some ideas come from David Harvey, who looked at how politics and money affect where things are. Another approach, called "new economic geography," considers social, cultural, and even personal factors in how economies are spread out.

Even famous economists like Paul Krugman and Jeffrey Sachs have studied topics related to economic geography. Krugman even named his ideas about how space affects international trade theory the "new economic geography." This name is also used by geographers, which can sometimes be a bit confusing!

A Look Back in Time

The coffee trade is a huge business all over the world.

The idea of economic geography is very old. Some of the earliest examples are found in ancient Chinese maps from over 2,000 years ago. The Greek geographer Strabo also wrote about it in his book Geographika.

As cartography (map-making) improved, mapmakers showed where resources could be found in different parts of the world. Early travel journals described people, climates, and what different places could produce. These early records helped countries start trading across continents. This led to a time called mercantilism, where countries tried to gain wealth through trade.

In 1901, a scholar named Lindley M. Keasbey said that geography and economics needed each other. He believed that to understand how people make money, you need to know about the natural world. And to understand the natural world, you need to know how people's economic activities change it.

After World War II, people became more interested in geography. The need to rebuild economies also helped economic geography grow. Important ideas came from thinkers like Johann Heinrich von Thünen and Alfred Weber, who studied where things should be located. Other key ideas include Walter Christaller's Central place theory, which explains how cities and towns are spaced out, and the theory of core-periphery, which looks at rich and poor regions.

Today, economic geographers often focus on things like location theory (where to put businesses), spatial analysis (using tools like geographic information systems to study patterns), and understanding how regions and the world develop. They also study how the internet affects geography, and how new ideas and social networks spread.

Different Ways to Study

Economic geography is a very wide field. Researchers use many different methods to study how money and businesses work around the world. Here are some common approaches:

• Theoretical economic geography tries to build ideas and rules about how economic activities are arranged and spread out in space.
• Regional economic geography looks at the economic health of specific areas or countries. It studies how regions grow and develop their economies.
• Historical economic geography explores how economic patterns have changed over time. It uses old information to see how cities and businesses have moved and what caused these changes.
• Evolutionary economic geography uses ideas from evolutionary economics to understand how cities, regions, and other economic systems grow and change over time.
• Critical economic geography looks at economic issues from a deeper, more questioning point of view, often focusing on power and fairness.
• Behavioral economic geography studies how people and businesses make decisions about where to locate, based on how they think.

Economic geography can also be seen as a part of human geography that focuses on how human economic activities are organized in different places.

Main Areas of Study

Economic geography can be divided into several main areas:

• Geography of agriculture studies how farming changes the Earth's surface. It looks at where farms are located and why, and how humans interact with the environment to produce food.
• Geography of industry
• Geography of international trade
• Geography of resources
• Geography of transport and communication
• Geography of finance

These areas often connect with other parts of geography.

Economists vs. Economic Geographers

Generally, economists who are interested in space study how space affects the economy. Geographers, on the other hand, are interested in how economic activities affect the way places are organized.

Also, economists and economic geographers often use different methods. An economic geographer might look at a problem in a bigger way, considering the specific place, its size, and the economic issue. Some economic geographers feel that economists sometimes make the economic world seem too simple, which geographers try to avoid.

How Industries Differ Geographically

Different types of industries are spread out in different ways. For example, industries that dig up natural resources (like oil or minerals) tend to be found only where those resources are. In Norway, most oil jobs are in one area.

Industries that don't need to be close to their customers often gather in one place. A good example is the car industry in Detroit, USA. Farming also tends to be concentrated in certain areas.

However, industries that need to be close to their customers, like hairdressers, restaurants, and hotels, are spread out everywhere.

New Economic Geography

With the rise of the "New Economy," differences in wealth are growing in different places. The New Economy involves things like globalization, more use of computers and the internet, and the growth of knowledge-based jobs. This has allowed economic geographers to study the social and spatial differences that appear, such as the digital divide (the gap between those who have access to technology and those who don't).

The "new economic geographies" mostly include service industries that use new technology, like companies that rely on computers and the internet. This is a shift from making physical goods to a digital economy. In these areas, competition drives fast technological changes. These high-tech industries often depend on strong personal relationships and trust. Developing things like software needs a lot of teamwork and sharing of "tacit knowledge" (knowledge that's hard to write down). Because cooperation is so important, many high-tech companies tend to gather together in "clusters."

Social and Spatial Differences

As explained by Diane Perrons, there are two main types of "New Economic Geography." One type (NEG1) uses complex models to explain why development is uneven and why industrial clusters form. It looks at forces that pull businesses together and push them apart, especially economies of scale (where making more of something makes it cheaper per item).

The other type (NEG2) also tries to explain why industrial clusters appear today. But it focuses more on the social and cultural parts of economic behavior, especially the importance of hidden knowledge. The main difference is that NEG2 pays attention to things that NEG1 sees as hard to measure.

Both types of "New Economic Geography" agree on things like transport costs, the importance of knowledge, and how productivity can increase. They also both focus on the company as the most important unit and on growth rather than overall development of regions.

However, focusing only on companies can limit the discussion. It can make it harder to see the bigger picture of how these changes affect countries and the world. Also, the "digital divide" shows how some regions attract skilled workers instead of helping local people develop new skills. Even with more internet connections, the world still has growing social and spatial differences, often affecting women and minority groups more. For example, women and ethnic minorities are often found in lower-paying service jobs. These differences in the new economy are hard to fix because there are few clear ways to move into higher-skilled work.

See also

In Spanish: Geografía económica para niños