Changes in UK Economy Case Study — UK Flashcards
Causes of Economic Change: Industrial Structure
Decline of secondary industry + increase in tertiary and quaternary industry;
Machines + technology replaced jobs;
Other LIC and NEE countries produce cheaper goods —> labor is less expensive;
Lack of investment, high labor costs + outdated machinery make UK products too expensive;
Traditional industries eg, coal mining, engineering, manufacturing, have declined —> now is world center for financial services, media, research and creative industries
Causes of Economic Change: De-Industrialization
North thrived in secondary sector, but now because it is declining, more businesses in tertiary and quaternary set up in the south;
UK covered in coal mines, but now they are no longer in use. Also, textile and steel manufacturing has declined;
Jobs lost —> businesses close and thus lead to towns with low income
Globalization
UK businesses owned by foreign companies and vice versa;
Economic growth —> UK economy grows by 1-2% in most years because of trade;
Cheaper goods and services —> Products bought are cheaper because they are produced in places where people own lower wages than citizens;
Foreign investment —> Foreign companies invest in the UK, bringing new ideas and technology, and provide more jobs;
High-value production —> UK specializes in high-value manufacturing;
Migration —> Migrants fill jobs where there is a shortage of skilled workers in healthcare and construction and many British people travel abroad for work;
Less manufacturing —> More imports from foreign countries, eg. China, means less goods produced in the UK. Factories close so jobs are lost;
Outsourcing jobs —> Jobs that used to be done in the UK are now done elsewhere, meaning a loss of jobs or lower wages for workers which are still in the UK;
Inequality —> The gap between low-paid unskilled work and high-paid skilled work is increasing. It is hard for low-paid workers to negotiate for high-pay when jobs can be outsourced
Moving Towards A Post-Industrial Economy
Definition: where manufacturing industry declines to be replaced by growth in the service sector and the corresponding development of quaternary sector;
From the 1970s;
10% to 15% of jobs in quaternary sector;
Cities with great potential must have: a number of quaternary industries; a highly skilled workforce, educated to degree level or above; new businesses with a potential to grow; good transport connections, including road, rail, and air;
Often the focus of growth corridors where fastest economic growth is happening;
Science parks: a group of scientific and technical knowledge-based businesses located on a single site — most associated with universities, enabling them to use research facilities and employ skilled graduates, may include support services, eg, financial services and marketing, offers many new jobs;
Business parks: an area of land occupied by a cluster of businesses — often located on the edges of towns because: land tends to be cheaper than in town center, with more available land, businesses can be extended, access is better for workers and distribution, using by-passes and highways, with less traffic congestion than in towns or cities, businesses can benefit by working together
Rural Areas with Population Increase: Economic
Most people shop in the nearby urban cities instead of the local town;
House prices increase;
Gasoline is cheaper than in urban cities;
Rural Areas with Population Increase: Economic
Most people shop in the nearby urban cities instead of the local town;
House prices increase;
Gasoline is cheaper than in urban cities;
Migrant workers suppress job wages;
More high-tech businesses;
Area attracts wealthy
Rural Areas with Population Increase: Social
Schools are overstretched; Loss of community spirit; More congestion/traffic; More foreigners; Proximity to big cities
Rural Areas with Population Decrease: Economic
Lack of part-time jobs —> limited pocket money;
Hard to find suitable workplace;
Young adults would need to move away for further education;
Adults struggle to support family due to lack of jobs;
Elderly struggle to survive on pension ;
Lack of medical care
Rural Areas with Population Decrease: Social
Few people to socialize with;
Lack of recreational activities;
Limited schooling options;
No services to take care of elderly
Improvements & Developments in Transport Infrastructure: Road Improvements
Aim is to increase the capacity and improve the condition of UK roads. They will create thousands of jobs and boost local and regional economies;
100 new road schemes by 2020;
1300 new lane miles added to highways and trunk roads to tackle congestion;
Extra lanes added onto main highways to turn them into ‘smart motorways’ and improving links betweenez London, Birmingham, and the north
Improvements & Developments in Transport Infrastructure: Railway Improvements
Electrification of the Trans-Pennine Express Railway between Manchester and York by 2020, reducing journey times;
Electrification of the Midland mainline between London and Sheffield by 2030;
HS2 - a 50 billion pound plan for a new high-speed rail line to connect London all the way to Manchester and possibly Newcastle and Scotland
Improvements & Developments in Transport Infrastructure: Port Improvements
Belfast - 50 million pounds invested in facilities to service offshore renewable energy sector. Land is available to accommodate manufacturing for wind, wave and tidal energy;
Bristol - 195 million pounds invested for bulk handling and storage facilities;
Felixstowe and Harwich - a new rail terminal at Felixstowe and upgraded cruise service facilities at Harwich
Improvements & Developments in Transport Infrastructure: Airport Improvements
Expanding London’s airports:
Adding a new runway at Heathrow;
Increasing the length of one of the existing runways at Heathrow;
Constructing a new runway at Gatwick
North-South Divide
People in South earn more per week, generate more wealth for the country, are less likely to be unemployed, + live longer than people in the North.
Industries during the industrial revolution were based in the North. The UK is now a post-industrial economy so businesses are interested in the south where it’s closer to the rest of the world + has less harsh weather
North-South Divide: Solutions
Foreign investment has been encouraged in the north;
Developing cities in the north to attract tourism (eg, Newcastle);
A new high-speed rail between London and the north;
Upgrading highways;
New Liverpool deep-water container port;
The Mersey Gateway — a new 6-lane toll bridge over the River Mersey to improve access to new deep-water port
North-South Divide: Local Enterprise Partnerships
Are voluntary partnerships between local authorities and businesses, aiming to identify business needs in the local areas and encourage companies to invest, thus boosting the local economy
North-South Divide: Enterprise Zones
Aim to encourage the establishment of new businesses and new jobs in areas where there were no pre-existing businesses;
Government provides a business rate discount;
Government ensures the provision of a super fast broadband;
Government provides financial allowances for plant and machinery;
Government provides simpler planning regulations to speed up establishment of new businesses
UK in Wider World: Economic Links
Most important with EU, then USA and China;
London Heathrow + Channel Tunnel between UK and EU + sea ferries
UK in Wider World: Political Links
EU: joined in 1973 — Financial support for farmers + EU laws and controls on crime, pollution and consumers’ rights + High unemployment and low wages in poorer EU countries may have led to mass migration of workers to the UK + EU is biggest single market in world + European Structural and Investment Funds has provided support for disadvantaged regions in the UK and sectors such as fisheries;
Commonwealth: UK part of 53 countries + Commonwealth Secretariat (delegate for Commonwealth) advises on human rights, social and economic development, and youth empowerment + Sporting connections
