INDUSTRY AND

TOURISM
 SYLLABUS OUTLINE
• Industrial Location and relocation
• Industrial Linkages and Agglomeration
• Small and medium scale Enterprises
• Hi-tech industries
• Tourism industry
 Introduction
• Industry is any work that earns one a living
• Involves extraction, manufacturing and processing in factories and
also service provision
• Divided into primary secondary and tertiary industries
 Primary industries
• These are the extractive industries
• Primary industries are those that make use of the Earth's natural
resources:
• Farming
• Fishing
• Forestry
• Mining
• Quarrying
• Hunting
• Secondary industry
• Factory
• Secondary industries are those which take the raw
materials produced by the primary sector and
process them into manufactured goods and
products.
• Examples of secondary industries include heavy
manufacturing, light manufacturing, food
processing, oil refining and energy production.
• Tertiary and quaternary industry
• The tertiary sector is also called the service sector and
involves the selling of services and skills.
• They can also involve selling goods and products from
primary and secondary industries.
• Examples of tertiary employment include the health
service, transportation, education, entertainment, tourism,
finance, sales and retail.
 CONT-
• The quaternary sector consists of those industries
providing information services, such as computing, ICT
(information and communication technologies),
consultancy (offering advice to businesses) and research,
particularly in scientific fields.
• The quaternary sector is sometimes included with the
tertiary sector, as they are both service sectors.
• The tertiary and quaternary sectors make up the largest
part of the MEDCs’ economy, employing about 76% of the
workforce.
 Comparing employment structures

• The employment structure of a country shows how the labour force is

divided between the primary, secondary and tertiary sectors.
• Different countries have different employment structures.
• The employment structure of a given country can tell you quite a lot about
that country's economy.
• In the richest countries, for example, there will usually be more people
working in the tertiary/quaternary sector than in the primary and secondary
sectors.
• In the poorest countries, there tend to be more people working in the
primary sector than in either the secondary or tertiary sectors.
 About the pie charts
• In the richest country (USA), most people work in the tertiary sector.
• In the poorest country (Nepal), most people work in the primary
sector.
• In Brazil, the labour force is more evenly distributed between the
three sectors.
• Note that the quaternary sector has been included in the tertiary
sector.
• Agglomeration
• These are two 'special cases' of industrial location.
• Agglomeration is when a number of producers in the
same or related industries group themselves together.
• They do this to benefit from local skill pools, economies of
scale or the prowess of a locality in a particular field.
• An example is the large number of financial services
companies (e.g banks and insurance companies) which are
headquartered in the City of Harare and Bulawayo.
 FOOTLOOSE INDUSTRIES
• Footloose industries are those that are less dependent on factors that
tie them to a specific geographical location.
• Unlike manufacturing industries, tertiary or services companies do
not have to be near a source of raw materials.
• As long as they have suitable transport, energy and communications
links, they can locate themselves virtually anywhere in the world.
• Examples of footloose industries are computer software
development, telephone sales and call-centres.
 GLOBALISATION IN INDUSTRY
What is globalisation?
• Globalisation is the process by which the world is becoming increasingly
interconnected as a result of massively increased trade and cultural exchange.
• Globalisation has been taking place for hundreds of years, but has speeded up
enormously over the last half-century.

Causes of globalization:
• o Improvements in transportation
• o Freedom of trade
• o Improvements of communications
• o Labour availability and skills
Factors influencing globalisation include:
• ✓ Communications. TV, telephony and the internet have allowed information and
ideas to travel quickly.
• UK businesses can have a call centre in India answering calls from UK customers.
• ✓ Transport has become cheap and quick. UK people now holiday all over the
world.
• People from other countries can travel to the UK to seek better-paid jobs.
• Businesses can ship products and raw materials all over the world more easily -
making products and services from all over the globe available to UK customers.
• ✓ Trade liberalisation. Laws restricting trade and foreign investment have been
relaxed.
• Some governments even offer grants and tax incentives to persuade foreign
companies to invest in their country.
• The idea that there should be no restrictions on trade between countries is known
as free trade.
• Positive impacts of globalisation
• Globalisation is having a dramatic effect - for good or ill - on world economies and on
people's lives.
• Some of the positive impacts are:
• ✓ Inward investment by TNCs helps countries by providing new jobs and skills for
local people.
• ✓ TNCs bring wealth and foreign currency to local economies when they buy local
resources, products and services. The extra money created by this investment can be
spent on education, health and infrastructure.
• ✓ The sharing of ideas, experiences and lifestyles of people and cultures. People can
experience foods and other products not previously available in their countries.
• ✓ Globalisation increases awareness of events in far-away parts of the world. For
example, the UK was quickly made aware of the 2004 tsunami tidal wave and sent
help rapidly in response.
• ✓ Globalisation may help to make people more aware of global issues such as
deforestation and global warming - and alert them to the need for sustainable
development.
• Negative impacts of globalisation
• Critics include groups such as environmentalists, anti-
poverty campaigners and trade unionists.
• Some of the negative impacts include:
• Globalisation operates mostly in the interests of the richest
countries, which continue to dominate world trade at the
expense of developing countries. The role of LEDCs in the
world market is mostly to provide the North and West with
cheap labour and raw materials.
 Cont-

•✓ There are no guarantees that the wealth from inward investment

will benefit the local community. Often, profits are sent back to the
MEDC where the TNC is based. Transnational companies, with their
massive economies of scale, may drive local companies out of
business. If it becomes cheaper to operate in another country, the
TNC might close down the factory and make local people redundant.
• ✓ An absence of strictly enforced international laws means that
TNCs may operate in LEDCs in a way that would not be allowed in an
MEDC. They may pollute the environment, run risks with safety or
impose poor working conditions and low wages on local workers.
 CONT-
• Globalisation is viewed by many as a threat to the world's cultural diversity.
It is feared it might drown out local economies, traditions and languages and
simply re-cast the whole world in the mould of the capitalist North and
West.
• An example of this is that a Hollywood film is far more likely to be successful
worldwide than one made in India or China, which also have thriving film
industries.
• ✓ Industry may begin to thrive in MEDCs at the expense of jobs in
manufacturing in the LEDCs.
• Anti-globalisation campaigners sometimes try to draw people's attention to
these points by demonstrating against the World Trade Organisation. The
World Trade Organisation is an intergovernmental organisation that
promotes the free-flow of trade around the world.
 IN SUMMARY IMPACTS OF GLOBALIZATION
Positive impacts of globalization:

• Economies of scale, cost per item reduced when operating on a larger scale
• TNCs helps countries; provide new jobs & skills for local people
• TNCs bring money and foreign currency to local economies
• Allows for sharing of ideas, experiences and lifestyles of people and
cultures
• Increases awareness of events in far-away parts of the world
 Negative impacts of
globalization:
• Globalisation operates mostly in interests of richest countries
• No guarantees that wealth from inward investment will benefit local community
• Profits are sent back to the MEDC where the TNC is based
• TNCS, with massive economies of scale, may drive local companies out of
business
• If cheaper in another country, TNC might close down factory making locals
redundant
• Absence of laws may allow TNCs to operate in LEDCs in ways not allowed in
MEDCs
• Threat to the world's cultural diversity, such as the traditions and languages
• Industry may begin to thrive in LEDCs at expense of jobs in MEDCs.
• Transnational corporations (TNCs)
• Globalisation has resulted in many businesses setting up or buying
operations in other countries.
• When a foreign company invests in a country, perhaps by building a factory
or a shop, this is called inward investment.
• Companies that operate in several countries are called multinational
corporations (MNCs) or transnational corporations (TNCs).
• The US fast food chain McDonald's is a large MNC.
• It has nearly 30,000 restaurants in 119 countries.
• In Zimbabwe we have Falcon Gold, LonRho, Bata, Anglo American
Corporation etc
•Factors attracting TNCs to a country may
include:
• ✓ Cheap raw materials.
• ✓ Cheap labour supply.
• ✓ Good transport.
• ✓ Access to markets where the goods are sold.
• ✓ Friendly government policies.
• Industrial pollution
• Any large-scale economic activity may have a negative impact on the
natural environment.
• Manufacturing industries in particular can cause air, water and noise
pollution.
• Industrial pollution can affect the environment in a number of ways:
• It may damage the well-being of humans and other species - for example,
it can pollute drinking-water supplies or poison plants and animals.
• It may interfere with natural processes - for example, it could change
local climatic conditions or destroy wildlife habitats.
• It may impact on people's livelihoods - for example, pollution of the sea
will hurt people who are involved in fishing and tourism.
• Some governments have introduced legislation to try to cut down on
avoidable pollution and to encourage industries that are more sustainable.
These laws need to be enforced by courts.
 Industrial Location and relocation
• Industrial location is the position of an industry
in relation to factors that force it to be in that
area.
 Industrial location factors

• Different industries require different inputs. Industries are more likely to

locate where these inputs are readily and cheaply available.
• Factors that influence where an industry locates include:
• ✓ Power supply

• ✓ Communications - including transport, telecommunications.

• ✓ Labour supply - including workers with the right skills.

• ✓ Access to market - where the goods are sold (perishability and weight
gaining industries.
• ✓ Grants and financial incentives - usually from governments.

• ✓ Raw materials – weight loosing industries (sugar cane refining)

Orientation of industries
• Power-oriented industries have large power requirements e.g an
aluminium smelter
• Labour oriented industries rely on large labour force e.g. garment
manufacturing and computer assembly
• Market oriented industries need direct contact with customers e.g
bakery
• Raw material oriented industries located close to raw materials
considering quantity, availability and costs of raw materials.
 Examples of raw material oriented industries
in Zimbabwe
• Sugarcane milling in Chiredzi and Triangle
• Saw milling in the Eastern Highlands
• Food processing industries such as fruit canning in Mutare
• Meat canning in West Nicholson
• Milk processing at Dendairy Farm in Betrice
 Material Index (M.I)
• This is the ratio of the weight of the original raw material to the weight of
the final manufactured product
𝑤𝑒𝑔ℎ𝑡 𝑜𝑓 𝑜𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑟𝑎𝑤 𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙
• 𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙 𝑖𝑛𝑑𝑒𝑥 =
𝑤𝑒𝑖𝑔ℎ𝑡 𝑜𝑓 𝑓𝑖𝑛𝑖𝑠ℎ𝑒𝑑 𝑝𝑟𝑜𝑑𝑢𝑐𝑡
Example
•81
tonnes of sugarcane is require to produce 1 tonne of sugar therefore MI =
= 0,125.
8
• This means that only one eighth of sugarcane is useful in sugar production,
seven-eighths is waste
• Such an industry become raw material oriented to avoid transport costs
• Other industries are tea, tobacco and wood pulp processing.
 Interpreting Market Index
• When the MI is greater than 1, then it should be a raw
material oriented industry
• When the MI is smaller than 1, then it should be a
market-oriented industry
• When the MI is equal to 1, the it can locate at any
point between the market and the raw material
source.
 Industrial relocation in Zimbabwe
• Industrial relocation is a situation where an industry shifts from its
original site to locate to a new area or different site.
CAUSES
• Government policy.
• Environmental pollution.
• Raw material exhaustion.
• Changes in market demand.
• Harsh economic environment.
• Political unrest or civil wars.
Effects of Relocation in source region
• Unemployment
• Increase in crime and prostitution
• Economic decline as shops close down
• Creation of ghost towns
• Deterioration of infrastructure
• Reduction in standards of living
• Social and family problems caused by loss of jobs
 Effects of Relocation in source region
• Employment creation
• Increased levels of pollution
• Increase in land rates and rents
• Development of infrastructure
• Increase in revenue from taxes
• Induction of capital
 Theories of industrial location such as Weber
• Published by Alfred Weber in 1909
• Aimed to explain the spatial location of industrial activities in terms of
two economic factors
a. Transport costs
b. Labour costs
He based his theory on the following assumptions
 Weber’s Assumptions
1. Uneven distribution of natural resources on the plain. Fuel, water
and raw materials required for industrial production are only found
in given locations
2. Location and size of markets are fixed
3. Fixed locations of labour where given wage rates operate
4. A homogeneous country or plain where climate, soil, culture, race,
political and economic systems are uniform throughout the plain.
5. Investors are busy people who would seek to maximise profits by
maximising total production costs
 CONT-
6. A uniform system of transport over the flat plain where transport
costs are a function of weight and distance only
7. Perfect competition where resources and markets are unlimited at
their given locations
8. No regional variations in the costs of land, building, equipment,
interest and depreciation of fixed capital
• Production costs are affected by
a. Raw material costs
b. Transport costs
c. Labour costs
• Raw material costs vary due to the nature of deposits and the difficulty of
running them.
• Such costs are reflected within the cost of transporting the materials,
thereby reducing Weber’s regional factors to:
a. Transport costs
b. Labour costs
 Describe how , according to Weber, transport costs,
labour costs and agglomeration can influence industrial
location.
• Weber’s concern was to locate at those points where
transport costs were minimal
• He sought to ascertain how cheap labour and
agglomeration economies, available at a certain
location, might draw production away from the least-
transport location
• Weight loss affects the plant location
• In doing so, Weber considered the following cases:
Case 1 = one raw material and one market
In this case three are 3 possible locations:
• Market-oriented = if the raw material is ubiquitous
• Raw material-oriented = if the localised raw material undergoes
weight loss during production, and assuming that the weight loss is
50%
• Either raw material or market oriented or between the two – a
situation that occurs if the raw material is pure and the cost of
transporting the raw material and the finished product are equal
Case 2 = Two raw materials and one market
Such a situation has 4 possible locations according to Weber:
• Market oriented = if both raw materials are ubiquitous
• Market oriented = when one raw material is localised and the other is
ubiquitous. Here transport costs are incurred from one raw material source
only.
• Market oriented = when the raw materials are localised and pure
• Lowest transport cost isodapane when the two raw materials (R1 and R2)
are gross, so that the raw materials are transported a minimum distance to
the manufacturer
• Manufacturing reduces their bulkiness, making it cheaper to transport the
final product to the market
Weber showed the effect of three basic principles:
• Point of least-transport costs
• Deflective effect of labour costs
• Deflective effect of agglomeration economies

Agglomeration and deglomeration

• Weber went further to identify another locational factor of
agglomeration or deglomeration economies
Agglomeration economies
• These are savings to individual plants that result from operating in the
same location
• The savings come from:
a. Common use of facilities such as auxiliary industries, financial
services and public utilities
b. Industrial linkages between firms where goods flow between plants
c. The development of specialist labour force
d. Large-scale marketing of products
In a single firm location, these processes and services are borne by the
firm at great cost
 BENEFITS OF AGGLOMERATION

• Reduction of time taken to visit linked industries

• Less costs of producing items
• Provision of a pool of skilled labour
• Co-operation between plants – sharing specialized equipment
• Sharing benefits – e.g. social services for workers
• Transporting finished products in large quantities at low costs
• Importing raw materials in large quantities at low prices
• Greater division of labour
• Large scale purchasing and marketing
Deglomeration economies
• These involve the weakening of agglomeration economies, and may
be due to the increase in the cost of land owing to such clustering of
firms.
• This can also occur when a nucleus grows too big for its production
due to:
a. Congestion
b. Rising of land prices if two roads are joined
c. Increase in clearing costs due to pollution of firms
d. Congestion that results in transport delays
 Industrial Linkages
•A linkage industry is an industry which is
associated or connected to other industries
in such a way that the existence of one is
dependent on the other, or it enhances the
other’s production process. These industries
are also referred to as ‘spin-off’ and
‘screwdriver’ industries.
 TYPES OF LINKAGES

• Linkages are grouped firstly as, INTERNAL (local) or EXTERNAL

(international) and, secondly, either BACKWARD or FORWARD.
• Internal linkages are formed where all the industries that are
connected exist within the same country. These industries are often
sited near to each other.
• An external linkage is where one or more of the industries is located
in another country, for example, the motor car assembly industry in
Willovale is linked to the motor car parts manufacturers all over the
world.
• Internal and external linkages are also linked at different stages of
production and, therefore, may be either backward or forward.
 Backward and Forward Linkages
• A backward linkage exists when an industry OBTAINS raw materials from an
industry that is closer to the raw material stage than itself, for example, the
biscuit industry obtains flour from the flour mill.
• A forward linkage exists when an industry SUPPLIES another industry that is
nearer to the marketing stage than itself, for example, the agricultural
industry supplies the tourist industry.
 CONT-
• Hirschman introduced the concept of backward and forward linkages.
• A forward linkage is created when investment in a particular project
encourages investment in subsequent stages of production.
• A backward linkage is created when a project encourages investment in
facilities that enable the project to succeed.
• Normally, projects create both forward and backward linkages. Investment
should be made in those projects that have the greatest total number of
linkages.
• Hirschman called the industries with greatest complementarities as the
'leading sectors’.
• Projects with many linkages will vary from country to country
• Knowledge about project linkages can be obtained through input and output
studies.
 • CONT-

• Most underdeveloped economies are primarily

agrarian.
• Agriculture is typically at a primitive stage and
hence possesses few linkages, as most output goes
for consumption or exports.
• Therefore, it is said that underdeveloped countries
are lacking in interdependence and linkages.
 CONT-
• Industrialization can create more backward and forward linkages and should be the first step taken.
• Industries that transform semi-manufactured goods into goods needed by final demand are called
"last industries" or "enclave import industries".
• In underdeveloped countries, industrialization takes place through such industries, through plants
that add final touches to unfinished imported products.
• Examples are metal fabricating industries, pharmaceutical laboratories and assembly and mixing
plants.
• Such industries have many advantages, as they often require the smaller amounts of capital available
in such economies and without having to rely on unreliable domestic producers.
• Therefore, underdeveloped countries set up such "last industries" first. These industries create long
chains of backward linkages. Colombia, Brazil and Mexico are examples of countries that followed
this path.
 CONT-
• The Last Industry Strategy has disadvantages.
• It can slow the creation of domestic production.
• Industrialists who have begun working with imports may not accept domestic
alternative products that reduce demand for their output.
• Creating last industries first can create loyalty toward foreign products and
distrust of domestic products and their quality.
• Banks may get used to extending credit for shorter, smaller capital
requirements.
• Disadvantages
• Disadvantages of the last industry strategy include inhibition of domestic
production as domestic demand grows.
• This is because industrialists who work with imported material will often be
hostile to the establishment of domestic industries because:
a. domestic goods are of lower quality
b. the number of domestic suppliers is small
c. downstream competition may intensify once inputs are available
domestically and competitors may be able to locate closer to the upstream
suppliers
OPPORTUNITIES FOR THE FORMATION OF
LINKAGES
• There are many opportunities for the development of linkage industries,
especially:
a. where there are idle raw materials
b. where there are large amounts of unemployed persons
c. where relationships have developed between the various productive
sectors, for example, primary with secondary sectors.
• Also, because many of these industries are in proximity to each other,
linkages have been encouraged.
• However, with the development of transport, this has become a less
important factor.
• In instances where knowledge can be shared, linkages are also formed.
 BENEFITS OF LINKAGE INDUSTRIES
• 1. Resources are more efficiently used.
• 2. More unemployed persons are able to find work.
• 3. Investment, national income and standard of living increase with the formation of
linkage industries.
• 4. Countries are able to save on imports and increase exports through items
produced by linkages. This will improve the balance of payments of countries and
boost their economic development.
• 5. Linkages can encourage large-scale production, which can meet local as well
as foreign demand.
• 6. Innovation and new technology can be promoted through linkage
industries.
• 7. Self-sufficiency and self-reliance is encouraged.
 DISADVANTAGES

Problems experienced where the formation of linkages is

concerned include:

a. Acquiring of capital to develop linkage industries.

b. Access to foreign markets is not guaranteed.
c. Availability of local raw materials in some cases is limited
and these may have to be sought from abroad using
scarce foreign exchange.
 EXAMPLE OF LINKAGES
• An example of an industry that has excellent forward and backward
linkages is the steel industry.
• Backward linkages include coal and iron ore mining.
• Forward linkages include items such as canned goods.
• While this industry has strong linkages, it is not a good leading sector.
• Any industry that has a high capital/output ratio and causes
significant costs to other businesses has the potential to hurt the
developing economy more than it helps it.
 Some examples of linkage industries are:

• Agriculture linked to tourism.

• Bagasse linked to sugar cane refining.
• Bauxite linked to aluminium.
• Petrol (gas) linked to crude oil refining.
• Agriculture linked to the canning industry.
 Economies and Diseconomies of scale.

• Refers to economies of growth resulting from the expansion of the

scale of production capacity of an industry leading to increased
output and decrease in its costs of production per unit of output.
• Maximum operating economies are obtained when the scale of
production is sufficiently large to allow each stage of production to be
operated at its optimum level.
Types of economies of scale
Internal Economies of scale
• These are advantages of a large scale production that can be achieved by
an industry
• They arise from the actual processes of production and organisation of
processes.
Types of Internal Economies of scale
1. Technical – arise where there is large scale production.
• This occurs when production is broken into different parts or separate
tasks.
• Many will be fully employed on full time basis
• E.g in a clothing factory – A. cuts, B. takes the various pieces together, C.
makes button holes and D. sews the buttons on
Advantages
• Division of labour
• Specialisation
• Maximum use of machinery
• Maximisation of labour
• Technical help in linkages
• Specialised plants are located on one site by serving a particular
purpose
2. Managerial economies of scale
• These are important when production increases
• Organisers spend time organising work – low workers to routine.
• Export administrators are in charge of sales and transport
• There could be accountants, marketing managers, advertisement
experts, salesmen and production engineers
• All these people devote their attention to a small part of the
company’s work and there will be increase in productivity
3. Social economies of scale
• They attract customers
• They involve recreational facilities, pension, bonuses etc
• Workers are made to feel that they are the integral part of the firm
• They develop loyalty to the firm
EXTERNAL ECONOMIES OF SCALE
• They are the original location factors for industrial concentration
• These have to do with industrial agglomeration
• Plants in the same industries but performing different operations may
locate in a cluster
• There will be a concentration of linked industries in the area
• This results in mutual benefits
• Are responsible for continued industrial growth of an industry
Advantages of external economies of scale
• Common services such as marketing organisations can be set up.
• Roads and social amenities can be jointly provided
• Technical schools can be provided
• Industries can be located where markets exist.
How a plant benefit from economies of scale
• Fixed overhead costs are spread over many units of products and so
minimise production cast for each unit.
• Cheaper raw materials are obtained as a result of bulky buying
• Savings are made in selling large quantities
• Industrial linkages occur whereby a large factory is able to sub-contract
other smaller factories
• High turnovers are obtained
• Improved efficiency in production occurs due to division of labour and
specialisation
• It enables introduction of better methods of production by promoting
research and development.
• The scale of production is not an independent variable since the size of
the plant is influenced by
a. Raw material supply
b. Nature and size of the market
c. Capital
d. Management
e. Labour
f. Technological change
g. Historical influence
 SMALL AND MEDIUM SCALE
ENTERPRISES
WHAT ARE SMEs?
• Small and medium-sized enterprises (SMEs) are non-subsidiary,
independent firms which employ fewer than a given number of employees.
This number varies across countries. The most frequent upper limit
designating an SME is 250 employees.
• Small firms are generally those with fewer than 50 employees, while micro-
enterprises have at most 10, or in some cases 5, workers.
 Measuring Small and Medium scale
enterprise
• According to World Bank, since 1976, firms with fixed assets (excluding
land) less than US$250,000 in value are Small Scale Enterprises.
• USAID in the 1990s - Firms with less than 50 employees and at least half
the output is sold.

Definition for Developing Countries:

• Large - firms with 100 + workers
• Medium - firms with 20 - 99 workers
• Small - “ “ 5 - 19 workers
• Micro - “ “ < 5 workers
 CONT-
• The dynamic role of SMEs in developing countries as engines through which
the growth objectives of development can be achieved has long been
recognized.
• In view of the importance and place of SMEs in an economy, it is imperative
that SMEs should be given the priority it deserves.
• The general belief is that the investment environments have not been friendly
to the survival and development of SMEs.
• This is evident from the rate of mortality of these small scale ventures; and of
course a reason for high poverty level.
• Studies are needed to enhance the performance of SMEs, creating stable jobs
for the teeming population which will bring about poverty reduction.
• Moreover, studies of this type will contribute in no small measure to the
knowledge needed globally.
 •CONT-
• SMEs are primarily expected to serve as bedrock of supply of promising
entrepreneurs who would be ready to take calculated chances to explore
new ideas or favourable market development.
• They are also expected to assist further entrepreneurship and skill
development.
• In most developing economies, unemployment is the greatest threat to
economic growth and development.
• Hence, the proliferation of virile SMEs could be an antidote to large-scale
unemployment in these economies.
• This could be especially helpful in mitigating the rural-urban drift, a
burgeoning socio-economic problem in the developing economies.
ADVANTAGES OF SMEs
• Though small, SMEs create employment.
• Add to the country’s GDP
• Produces cheaper commodities
• Can be done from home
• Relaxed working time and duration
 Disadvantages of SMEs
• Little contribution to gvt revenue (untaxed)
• No fixed working time and hours
• Uses cheap raw materials to maximise profits.
• Are too mobile – difficult to trace
 MEASURES TO ENHANCE SMEs
• Giving them credit facilities from both the bank and non-bank financial
institutions (loans and grants)
• Infrastructural development ( eg Glen View area 8 – Makomva or Magaba)
• Technologically supports (machinery).
• Education and training on how to run their small businesses.
• However, there is unavailability of credit or financial support for the SMEs
due to stringent and high interest payment on credit and loans.
• In addition to the above, there is no or very low credit facilities to SMEs by
the banks due to banking business of borrowings for long term and lending
for short term especially to the sectors that are considered risky.
 High Tech Industries
Definition - What does High Tech mean?
• High tech is an abbreviation of "high technology," which is a
generic term referring to a broad range of industrial classifications
and innovation. A study funded by the Workforce Information
Council identified the high-tech sector to be that which includes a
high concentration of workers in what is referred to as STEM
(science, technology, engineering and mathematics).
• high-tech ˌindustry is an industry using or involving advanced
methods and the most modern equipment.
 Products Manufactured in High-tec Industries
• High-tech manufacturing focuses on technology.
• It includes the manufacturing of personal and commercial computer
products.
• The companies that work in the sector also manufactures the elements that
make the computers run, including fibber optics cables, electron tubes,
circuit boards, capacitors and more.
• Part of the industry is geared toward creating the equipment used to
manufacture the high-tech goods as well.
• The machinery used to fabricate and build the computers, circuit boards,
etc. are manufactured by high-tech manufacturers in the same industry.
 Processes Used in High-tec Industries

• Companies in the high-tech manufacturing industry use much of the same

processes that others do.
• They rely on the forming, casting, moulding and machining that other
industries use to make products.
• Extensive laser engineering is utilized, along with manual work on some of
the more delicate details.
• Part of the high-tech manufacturing industry creates the circuits, chips and
tools to be used in other goods manufactured in other sectors.
• Such goods forgo the extensive assembly processes
 Special Considerations for High-tec Industries
• A great deal of the parts used in high-tech manufacturing is imported from
companies in other countries who can create the parts needed at a much
lower price.
• For these reasons, some of the companies that manufacture personal
electronics, for example, have assembly as their primary process, using the
imported parts.
• High-tech manufacturing is charged with creating the technology that the
world has come to depend on.
• It is rapidly growing and changing, as innovation and new technology drives
this industry more than others in the manufacturing sector.
• It is also the industry that is probably most dependent on global relationships
in order to keep the cost of goods low enough for customers to manage.
• Understanding this industry is important for the consumers of the high-tech
goods and their parts.
 What are the main characteristics of high-tech (high
technology) industry?
• High-tech industries are more predominantly found as part of agglomeration
economies, where they locate next to each other helping to link to other companies
on site.
• The industry is mainly situated on sites that have room for further expansion so as the
industry develops so can the size of firms.
• High-tech industries have to be easily accessed for both workers and for the imports
and exports of goods.
• The techniques of this industry involve micro-electronics but can also include medical
instruments, biotechnology and pharmaceuticals which all belong into the quaternary
sector, demanding high inputs of information, expertise and research and
development.
• They are footloose industries as they are not tied to their raw materials and therefore
they can have a free choice of location. They mainly locate in areas of maximum
profit.
 Tourism industry
•Importance of Tourism
•Trends in Tourism
•Local tourism
LOCAL TOURISM
 TOURISM IN ZIMBABWE
• Sometimes referred to as the “world of wonders”, Zimbabwe is one of
the worlds top travel destinations.
• With a myriad of natural and cultural wonders as well favourable
year-round climate conditions, Zimbabwe’s tourism sector is a great
option when considering investing in Zimbabwe.
• It is arguably Zimbabwe’s most exciting industry in that it is the fastest
growing sector, providing and ever increasing 6.1% to the countries
GDP.
• Employing over 90,000 people, the tourism sector provides countless
business opportunities in Zimbabwe.
 Natural Tourism in Zimbabwe:
• Zimbabwe is home to over 26 game parks and safari destinations in which a
variety of rare animal and bird species can be viewed. In fact, over 400
different species of bird reside in the country.
• In addition, the Zimbabwe boasts several world renowned sites such as
Mana pools, Matopos, Kariba dam, the Eastern Highlands and the mountains
of Nyanga.
• Victoria falls, one of the most popular tourist destinations, and being an
UNESCO World Heritage site is home to several world famous hotels that
include activities such as golf courses, river cruises and game drives.
• Activities such as white water rafting and bungee jumping are provided for
tourist entertainment.
 Cultural tourism in Zimbabwe

• Rich in cultural heritage and art, Zimbabwe is a popular destination for

tourists looking to explore interesting cultural sites.
• The Great Zimbabwe Ruins are some of the most inexplicable and ancient
ruins in the world, and is another UNESCO World Heritage site.
• The Zimbabwean government has placed emphasis on the act of preserving
important Zimbabwean art and artefacts.
• The famous Zimbabwean stone sculpture is of special interest to tourists.
• The National Gallery in Harare and Bulawayo were constructed to preserve
and present important Zimbabwean art, which is also displayed in various
international galleries around the world.
 VICTORIAL FALLS
• The largest waterfall in the world (when accounting for both width
and height).
• There is no substitute for seeing this thundering, frothing, life-
affirming natural wonder in person.
• Victoria Falls is on the border of the two countries of Zambia and
Zimbabwe, but 90% of the viewing points are in Zimbabwe.
• While you’re there, the town of Victoria Falls (which is, yes, in
Zimbabwe) has so much to do that you should stay here at least three
days to enjoy it fully.
• There’s white-water rafting, bungee jumping, Big Five safaris,
helicopter rides, river cruises, local village visits, steam trains and so
much more, set in exceptionally beautiful surrounds.
 KARIBA DAM
• It’s the world’s largest man-made lake (by volume) and its dam wall is an Italian-
designed feat of engineering.
• While that’s very impressive and all, you’ll visit this area for its extraordinary
natural beauty and prolific wildlife.
• The mountain-edged area around the lake is home to the Big Five, as well as
numerous other bird and animal species.
• One can rent a houseboat and enjoy home-comforts whilst travelling to different
parts of the lake.
• Alternatively, stay at a safari lodge or self-catering accommodation on one of the
peninsulas or islands of Kariba.
• Wherever you go along the lake, one thing is guaranteed: your view will be
accented by petrified trees jutting into the skyline and elephants wallowing in
sunset-hued waters.
 MANA POOLS
• Located along the forested floodplains of the Zambezi River in north-eastern
Zimbabwe, this UNESCO World Heritage Site is one of Africa’s last unspoilt
wildernesses.
• Perhaps not as easily accessible for tourists as Hwange National Park, there
are many pros for visiting Mana Pools: prolific wildlife, scenic vistas of the
Zambezi River, undergrowth-free forests, and fewer tourists.
• Many seasoned safari experts regard Mana Pools as the epitome of
authentic game viewing in Africa, as well as one of the top locations for
walking safaris and canoe safaris.
• You can self-drive, or stay in a guide-led lodge, both of which allow for
numerous opportunities to live at close quarters with elephant, hyena, lion
and hippo.
 MATOPOS NATIONAL PARK

• In this unique landscape of balancing rock formations and granite hills, rhinos
can be found meandering through the vegetation, whilst eagles soar overhead.
• The caves here have been inhabited my man for thousands of years, leaving a
legacy of rock paintings and legends for future generations.
• The spiritual atmosphere of Matobo National Park is felt by even the most
world-weary of visitors, and you shouldn’t overlook it in your visit to Zimbabwe.
• The nearby city of Bulawayo is also a historical icon; read posts about Matopos
and Bulawayo.
 GREAT ZIMBABWE
• For centuries, the structures at Great Zimbabwe have captured the
imagination of locals and explorers alike.
• They’re the largest, and second-oldest of their kind in sub-Saharan
Africa. The local name for the site was “Dzimba dza mabwe” (roughly
“Houses of Stone”) or simply “Zimbabwe”.
• These ruins are so important that when Rhodesia became independent in
1980, the nation itself was named after them.
• In addition, the soapstone bird carvings found at the Great Zimbabwe site
have become the nation’s emblem, and are a central feature on the
country’s flag.
• This, along with the size and scope of the ruins, makes the Monument a
fascinating and insightful place to visit
 HWANGE NATIONAL PARK
• Roughly the same size as the Serengeti National Park or the state of
Connecticut, Hwange is home to one of the largest elephant populations
on earth.
• This may sound trite, but when you see a 200-strong family of elephants
just footsteps before you, without any fences, bullhooks or ‘handlers’ in
sight, the term ‘wild’ will take on a whole new meaning.
• Not only that, but there are lion (it was home to the now-famous Cecil),
giraffe, cheetah, African wild dogs, and over 400 species of birds, all of
which make this a wildlife-viewing paradise.
• Due to Hwange’s easy access from Victoria Falls and Bulawayo, and a wide
range of accommodation options, this is the perfect place both for first-
time safari-goers as well as seasoned bush lovers
 HARARE CITY
• It has art galleries and historical relics, wildlife sanctuaries and natural beauty.
• It’s home to ladies-who-lunch and politicians, accountants and technology
whizzes; gardeners and doctors.
• You’ll see cyclists carrying firewood on their heads, “emergency taxis” weaving
crazily along pot-holed roads, and street vendors selling flags at traffic lights.
• The street lights often don’t work, yet certain suburban houses with generators
will be illuminated from every square foot.
• The cars range from brand-new Hummers to dilapidated VW Beetles.
• The city centre can look tired and brash, yet the north-eastern suburbs are
spacious and beautiful.
• Harare is the perfect mish-mash of contradictions to introduce you to
Zimbabwe before heading into the bush
 GONAREZHOU NATIONAL PARK
• This National Park is famed for its dramatic red sandstone cliffs, jutting into
the sky as if they were sealing the edge of the known world.
• The elephants here have a reputation for being larger and less tolerant of
humans than elsewhere in the country, due to a historical conflict between
hunters, local communities and authorities.
• More recently, innovative projects have gone a long way in improving
relationships with the local people and easing human-wildlife conflict. There
are two luxury lodges in this area, both of which are highly attuned to
sustainable community development and conservation.
• In addition, there are self-catering lodges and ‘undeveloped’ campsites for
anyone wanting to truly go back to basics.
• Game-viewing is less prolific and temperatures can be high, but this only adds
to the feeling of being in a lost world, isolated from modern distractions.
• The rewards are many: you’ll have the chance to see rhino, wild dog, long-
tusked elephant and rare king cheetah, without another human being for miles.
 VUMBA (VHUMBA) MOUNTAINS
• This lush, mountainous forest is a complete contrast to the savannah
ecosystems seen elsewhere in Zimbabwe, confronting many people’s
preconceptions about ‘typical’ African scenery.
• Vumba is a small but photogenic reserve, offering exciting walking trails
and mist-hued views into the neighbouring country of Mozambique.
• It’s one of the few places in Zimbabwe where you can see forest-dwelling
samango monkeys (as opposed to widespread vervet monkeys) and rare
bird species such as the jackal buzzard − all in a fairytale-like, Lord of the
Rings-style location.
• There are a number of picturesque lodges and hotels in the area, as well as
coffee plantations, an infamous coffee shop, a golf course and enchanting
botanical gardens.
 INYANGANI MOUNTAINS

• Swelling hills, pleasantly gurgling rivers, mountain waterfalls,

and green valleys greet visitors: all this barely three hours from
Harare.
• Nyanga is not the place to see the Big Five (although there are
smaller species); it’s the place for snuggling next to a fire in a
cosy cottage, walking along fern-lined mountain paths, and
going wild swimming in sparkling waterfalls.
 TOURISM TRENDS
• The tourism sector experienced rapid growth since the country gained
independence in 1980 with the period 1989-1999 registering tourist arrivals
growth averaging 17.5% whilst tourism receipts increased at an average
annual growth rate of 18%.
• However, the prevailing economic, social and political environment led to a
decline in tourism performance since 2000. The government attributed the
decline in tourism sector to
• a. the fast track land reform program
• b. illegal sanctions that were imposed on the country.
• c. United Kingdom and the United States of America the major source
markets for Zimbabwean tourism issued travel warnings against the country
reducing the amount of potential tourists coming to the country.
 TOURISM TRENDS CONT-
• 1999 was the year which recorded the highest number of tourists at Victoria
Falls
• December 2017 to January 2018 saw a sharp increase in arrivals at Victoria
falls of about 1 000 visitors per day.
• This was due to political reasons and removal of police road blocks
• Despite the economic challenges tourist arrivals have grown steadily over the
last decade. In fact, tourist arrivals have grown since 1964 from 198 000
visitors to over 2,4 million by 2015.
• By 2017 about 2,42 million tourist arrived in the country.
• In 2017, arrivals into Zimbabwe rose by 12% to 2,42 million from 2,17 million
in 2016.
 Arrivals and Tourism Receipts Trends

• Over the period 1980-1998, the tourism industry registered rapid growth. In
1980 for example, 237,668 tourists visited the country resulting in a total of
US$38.4 million in export receipts.
• This growth continued up to 1999 where 2,249,615 arrivals visited the tourist
resorts.
• Tourists’ arrivals grew at an average growth rate of 17.5% (ZTA, 2001).
• Growth rate in the sector however fell to 3% in 2007 as the hyperinflation
took its toll on all the sectors of the economy
Number of tourists arrival in Zimbabwe
(1980-2008)
Zimbabwe’s tourists receipts (1980-2008)
Investment in tourism (1999-2008)
 About the diagram
• Significant amounts were invested by the government in the tourism sector prior
to 1999.
• The economic crisis saw the government cutting down on the amount it was
investing on public sector investment projects.
• The decline in the amount of investment had a direct effect on the amount of
jobs that were created in the sector.
• In 1999 a total of 1358 jobs were created as a result of the government investing
Z$1.654 million, while the sector created 349 jobs with an injection of Z$ 225.3
million by the government in 2000.
• A total of 148 jobs and 183 jobs were created when the government injected Z$
244.4 million and Z$ 195.9 million in 2001 and 2002 respectively.
• By 2003 the government was running 7 tourism projects worth Z$ 21, 9 billion
creating about 313 jobs which was an 82% decline compared to 1999 when
tourism was at its best.
• In the year 2008 saw the number of projects drops to 3 indicating the declining
government fiscal space.
Tourism contribution to gross domestic
product, export, and employment
MORE TRENDS IN TOURISM
 TOURISM - INTRODUCTION
• Tourism is an important contributor to many countries' economies
but it can have negative impacts unless it is properly managed, and
the conflicting needs of interest groups are balanced.
• LEDCs in particular can become dependent on tourism, which is
dangerous if the tourists suddenly stop coming.
FACTORS: HUMAN AND PHYSICAL RESOURCES
• The human and physical resources found in a particular place often
influence tourism to a particular destination.
• Human resources are tourist attractions that have been made by
people, such as the Great Zimbabwe……..
• Physical resources are the attractions that have been made by
nature such as Vic falls…….
• Man-made tourist attractions include:
• ✓ Art

• ✓ Architecture

• ✓ Cultural monuments

• ✓ Museums

• ✓ Local traditions

• ✓ Food and drink

• ✓ Music and drama

 MEASURES TO MAKE TOURISM MORE
SUSTAINABLE
• Footpath maintenance - Some paths have been rebuilt or access
restricted to reduce the effects on paths and vegetation.
• Public transport - Visitors are encouraged to use the buses instead of
bringing their cars into national parks.
• Restricted parking zones have been set up and expanded in some
resorts.
• Parking on grass verges and near houses is restricted.
• Raising awareness of conservation issues for visitors with posters and
leaflets at tourist information and visitor centres.
• A 10mph speed limit must be introduced.
• The lake becomes congested with powerboats and water skiers
and noise from the speedboats can spoiling the lake for other
users such as swimmers and canoeists.
• Powerboats can caused shore erosion and that boats can
contribute to pollution and the disappearance of reed beds in
the lake.
• Conservationists welcome the new speed limit, but speedboat
owners, water-skiers, and boat companies around the lakes
object to the change saying businesses have been affected and
boat users have had to find alternative lakes.
 LOCAL TOURISM
• Zimbabwe was ranked 115/141 countries in the world despite having some
of Africa’s most amazing natural resources, including the majestic Victoria
Falls and the wildlife at Hwange National Park and Mana Pools.
• Very few countries in the world can boast such an array of activities for
tourists. Furthermore, Zimbabwe has good infrastructure when compared
to other African countries as well as a more literate population.
• However, Zimbabwe does have a challenging business environment, which
is where Zimbabwe scored poorly.
• As I have always argued, Zimbabwe desperately needs to create a
conducive business environment if it is to be successful. The tourism sector
plays a vital role in the long-term development of Zimbabwe.
 Tourism advantages and disadvantages
Advantages
• Foreign currency spent by tourists can be invested in improving local
education, health and other services.
• Jobs for local people are created and people can learn new skills in tourism
services.
• Construction creates jobs and develops skills for local people. Local
infrastructure is improved as water and sanitation facilities, roads, buses,
taxis and airports are provided for tourists.
• Visitors get an insight into local customs and traditions.
• Tourists see beautiful landscapes, wildlife and plants.
• They can also be educated about the dangers to fragile ecosystems in the
modern world.
 PROBLEMS
• Profits go to foreign companies, such as tour operators and hotel chains,
rather than to the local community.
• Foreign companies may bring foreign workers to do the skilled jobs; so local
people only do low skilled, poorly paid work.
• House prices rise when foreign companies and investors buy property for
hotels and holiday homes. This often makes houses too expensive for locals.
• Important projects for local communities might be side lined as infrastructure
developments are focused on tourists.
• If the aim of activities is to entertain, rather than educate tourists, this may
belittle the local people.
• Pollution and disruption to wildlife habitats could occur if tourism isn't
sustainable.
 ECOTOURISM

• Ecotourism are holidays that involve eco-related activities and are sustainable
e.g. hiking, bird-watching, horse riding, etc.
• It is a type of sustainable development.
• The aim of ecotourism is to reduce the impact that tourism has on naturally
beautiful environments.
• Any tourist destination can be harmed by increased tourism.
• If areas are damaged or destroyed, they will not be available to future
generations
• The ecotourism approach includes:
• ✓ Ensuring that tourism does not exploit the natural
environment or local communities.
• ✓ Consultation with local communities on planned
developments.
• ✓ Making sure that infrastructure improvements benefit
local people and not just tourists.
• Ecotourism now has the backing of the United Nations,
which made 2002 the "International Year of Ecotourism".
 Typical Ecotourism Activities
• Hiking
• Kayaking
• Bird watching
• Safari (animal watching)
• Cycling
• Beach cleaning
• Tree planting
• Completing bird and animal surveys
 How Ecotourist Resorts Can Be
Eco-friendly
• Use renewable energy sources
• Build using only local products
• Serve only local food, using locally sourced products
• Employ only local staff
• Recycle all waste
• Treat and clean all water
• Educate guests about the importance of protecting the environment
• Promote local culture
 Guidelines for ecotourists

• Ecotourism sets out guidelines for how tourists should behave when visiting
fragile environments.
• These include:
• ✓ Protect the environment - keep to footpaths, don't leave litter or start fires.

• ✓ Don't interfere with wildlife - don't scare or feed the animals.

• ✓ Protect resources - don't take too many showers or use air conditioning.

• ✓ Support local communities - stay in locally owned accommodation and buy

produce from local people.
 CONT-
• Eat local food and drink - avoid products that have been imported from
MEDCs.
• Respect local customs and traditions - some communities are offended
when tourists wear inappropriate clothes in religious places, strip off on
the beach or behave in a rowdy manner.
• Locals appreciate tourists who try to learn the language and show an
interest in their culture.
• Ecotourism is increasingly popular and many people appreciate remote
locations, small numbers of tourists and less sophisticated facilities.
• If a resort becomes over-developed then they will choose alternative
destinations.
 Contribution of tourism to economic dev of
Zim
• Zimbabwe seeks a seven-fold growth in tourism export earnings — as much as
$7 billion by 2030 to be achieved through effective marketing, product
development and facilitation and access, a strategy document has shown.
• Other pillars of growth include environmental sustainability, destination
management, information communication technology, and human capital
development, according to the National Tourism Sector Strategy (NTSS).
• The policy also seeks to increase the tourism sector’s contribution to the gross
domestic product (GDP) to $8,1 billion from the current $2,5 billion.
• The tourism sector accounts for over 10% of GDP and circa 20% of export
revenues.
• Tourism has grown steadily in Zimbabwe over the last decade generating over
US$856 million in export revenues in 2013.
Why invest in the tourism sector?
• Abundant natural resources
• Well developed infrastructure
• Access to international and regional markets
• Access to an educated and easily trainable labour force

Where to invest in the tourism sector:

• Development of tourist infrastructure, such as resorts, casinos and
accommodation.
• Development of airport infrastructure
• Tourism development zones in and around major attractions
• Partnerships with existing hotels/entertainment industries for
refurbishment of infrastructure.