Economic Activity Flashcards
What are the 4 sectors and what do they consist of?
- Primary sector- consists of economic activities working with natural resources
eg: farming, forestry, fishing, mining, quarrying - Secondary sector- consists of the economic activities concerned with making things mostly in factories (manufacturing)
eg: processing things such as food and minerals (iron ore), manufacturing (microchips), assembling (cars) - Tertiary Sector- involves providing services
eg: commercial (retail and banking), professional (solicitors and accountants), social (schools and doctors), entertainment (restaurants and cinemas), personal (hairdressers and fitness trainers, public private transport) - Quaternary sector- relatively new sector seen in developed and some emerging countries. It is concerned with information and communications (ICT) and research and development (R&D)
eg: research, design engineering, computer programming, financial management
Strength of each sector in different countries
Developing: rely mostly on the primary sector
Emerging: rely mostly on secondary sector
Developed: rely on tertiary and quaternary sector
How do we measure the relative strength of the sectors (2)
Employment: percentage of the workforce they employ in the sector
Gross Domestic product or Gross National Income: show how much the sector contributes to economic output of the country
What does the Clark-Fisher model show?
Shows how the sectors change with time over three phases, pre-industrial, industrial and post industrial.
The critical phase is the industrial one. This occurs when the secondary sector becomes more important than the primary sector, both in terms of employment and contribution to the GDP
Describe the process of the development staircase or pathway
Agriculture becomes mechanised and more commercial as it shifts away from subsistence farming (farming only for one’s own self). This releases labour to take on other forms of work and people move from the countryside into urban settlements and other forms of employment.
- Traditional craft industries are replaced by factories making goods for expanding markets. The wages earned in the factories lead to there being more disposable income and much of this is spent on services.
- Range of services available to people expands and the tertiary sector becomes dominant both in terms of employment and generating economic wealth.
- The quaternary sector appears when leading countries and major cities within those countries find that in order to keep ahead, they need to invest in higher education, research and development and new technologies.
- As countries move up the development staircase not only are there (i) sector shifts, but there is also (ii) a rise in the overall standard of living and (iii) the level of urbanisation.
What are reasons for growth in tertiary sector
- Due to decline in primary and secondary sectors as this frees up the workforce
- The older population is spending their money on shopping and holidays rather than saving it for their children. This has power and influence on the tertiary sector as money is spent on luxury services
- Use of technology: services are more accessible and this increases demand
Internet shopping (increased the demand for internet sales of all sorts of product) and banking (banking transactions easier)
Why are the tertiary and quaternary sectors growing with time in developed countries?
- Due to increase of prosperity and personal wealth
People can better afford social services
People’s taste changes, mobile phones, DVDs
Demand for more complex services has increased- ICT broadband, website designers, mobile phone networks, software programming
More growth in the education sector, in higher education has led to more people innovating, as they more equipped to research and develop new ideas and products - Countries and companies want to keep ahead of competition and so invest more in research and development into new products and processes
What are the location factors of the primary sector?
Cost of premises and space available, availability and skills of the workforce, need to be close to suppliers, transport links, financial help from government
What are some reasons why primary sector activity has moved from developed economies to developing economies
Cheap land means primary products can be grown cheaper
Lack of government regulations means that large amounts of forest can be cut down
Cheaper and widely available labour low production costs to be low
Developed road networks and ports allow products to be exported easily
Well developed transport networks means that transportation is cheaper rates
World’s manufacturing is concentrated on developed economies. Why?
They have a lot of resources and a large population that provide a large workforce
They have good technology and infrastructure that makes the process more efficient and cheaper
Where is the world’s manufacturing changing to and why (5)?
To NICs (Newly Industrialised Countries)
1. Trans National Companies: global companies have emerged with the capital and scale to locate different parts of their operations in different countries. They manufacture where labour is cheap and locate their sales departments in big markets.
2. Containerisation and easier transport – Now heavier and bulkier raw materials can be easily shipped or flown in
3. Low labour costs – labour costs is cheaper in developing and emerging economies than developed economies
4. New technology: internet allows communication for TNCs across the world
Energy is cheaper in developing countries
5. Government policies: governments of emerging and developing countries offer big incentives to companies to locate there such as tax breaks and ready-made factories
Where do tertiary businesses locate (1)(use urban land use model)?
Where they are accessible to customers, urban transport networks converge from rural and urban areas. Customers come from within the town or the city’s sphere of influence
So they often locate in CBDs
What is decentralisation
People and businesses have been moving out from the CBD and inner city, past the suburban ring to the RUF- rural-urban fringe
What are reasons for decentralisation
- Cheap land
- Room for expansion
- Attractive environment, little pollution
- Good accessibility- good road networks to the out-of-town areas
- Workers and work close by- due to suburbanisation trends
- Plenty of car parking space
- Government policy: the relaxation of green belt regulations
What is the informal sector?
Fifth sector in some parts of the world, which employs millions of people, but is not recognised by official figures produced by governments
