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Chapter 12: Sec. 5-7

Where are business services distributed?

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12.5 Hierarchy of Business Services

  • Every settlement provides consumers services to people in a surrounding area, but not every settlement of a given size has the same number and types of business services.
      • Business services disproportionately cluster in a handful of settlements

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2. Business services in world cities

    • World cities- play an especially important role in global business services.
      • Examples: New York, London, Tokyo

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12.5 Hierarchy of Business Services

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HIERARCHY OF WORLD CITIES

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12.5 Hierarchy of Business Services

3. Below the World cities are three other tiers of settlements according to type of business services.

  • Three lower tiers of business services
    • Tier 1: command and control centers
        • Have headquarters for large corporations
    • Tier 2: business-service centers
        • Back offices
          • a part of most corporations where tasks dedicated to running the company take place.
          • Service centers

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12.5 Hierarchy of Business Services

  • Tier 3: unskilled jobs
        • Resort, retirement, residential centers
        • Manufacturing centers
        • Military centers
        • Mining and industrial centers

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12.5 Hierarchy of Business Services

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BUSINESS SERVICE CITIES IN THE

UNITED STATES

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12.6 Business Services in Developing Countries

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OFFSHORE FINANCIAL SERVICE CENTERS

  • Business Services in Developing Countries

–Some businesses locate in developing countries, because they tend to offer supportive laws, weak regulations, and low-wage workers.

–Primarily there are two main types of business services offered in developing countries.

  • Offshore Financial Services

– Taxes

Tax breaks include little to no taxes on income, profits, and capital gains.

Privacy

Bank secrecy laws can help individuals and businesses evade disclosure in their home countries.

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12.6 Business Services in Developing Countries

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OFFSHORE FINANCIAL SERVICE CENTERS

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12.6 Business Services in Developing Countries

B.Business-Processing Outsourcing

        • Back offices
          • Aka Outsourcing
            • Clerical work (processing insurance claims, payroll management, transcription work)
        • Low wages
          • Most earn only a few thousand dollars per year
        • Ability to speak English
          • Call center workers must be able to understand North American customers

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12.6 Business Services in Developing Countries

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CALL CENTER, BANGALORE, INDIA

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12.6 Business Services in Developing Countries

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ADVERTISEMENT, BANGALORE, INDIA

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12.7 Economic Base

  • Basic industries
    • Export primarily to businesses and individuals outside the settlement
      • Example: Fruit orchard- fruit grown in the settlement, then shipped outside the settlement to provide growth in the economy

2. Nonbasic industries

    • Enterprises whose customers live in the same community-
      • They do not make money outside the settlement- They sell things to the community
      • Example- someone working at the hardware store

3. Economic base

    • A community’s unique collection of basic industries

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12.7 Economic Base

  • Specializing in specific services
    • General businesses
    • Computing and data processing
    • High-tech industries
    • Military activity support service
    • Management-consulting services
    • Entertainment and recreation
    • Medical services
    • State capitals
    • Lange universities
    • Military

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ECONOMIC BASE OF U.S. CITIES

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12.7 Economic Base

4. Distribution of talent

    • Individuals possessing special talents are not distributed uniformly among cities
      • Measured as the combination of:
        • Percentage of people with college degrees
        • Percentage employed as scientists or engineers
        • Percentage employed as professionals or technicians
    • Talent correlates with cultural diversity
    • Reciprocal relationship between talented and a city’s economic innovation

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