Economic transition Flashcards
Primary sector
Produces raw materials from the land and sea.
Secondary sector
Manufacturers primary products into finished products
Tertiary sector
Provides services to businesses and people
Quaternary sector
Uses high-tech to provide information and expertise
What percentage of employment was in the primary sector in the USA in 1900
40%
Employment structure in LIC
- heavily dependent on primary sector -> most in agriculture and subsistence farming
- underemployment in densely populated areas
- working conditions generally difficult
- prone to shocks from fluctuating commodity prices
Process of outsourcing
Japanese and western TNCs seeking locations in second-generation NICs where improvements in physical and human infrastructure now satisfied their demands but where wages were still low
Causal factors of deindustrialisation
Technological change enabling manufacturing to become more capital intensive and mobile
Filter down of manufacturing industry from HICs to lower wage economies
Increasing importance of the service sector in the HICs
Positive vs negative deindustrialisation
Where employment in manufacturing falls due to rapid productivity growth and labour is/isn’t absorbed into the non-manufacturing sector
Gini coefficient of Finland and SA
Finland = 26, SA = 65
China ratio of urban vs rural average income
3 to 1
What has happened to the gap between rich and poor over the last two decades (OECD)
This gap has grown in more than three quarters of OECD countries
Cumulative causation
- pre-industrial stage, regional differences are minimal
- a period of rapid economic growth, characterised by increasing regional economic divergence
- a stage of regional economic convergence, when the significant wealth generated in the most affluent region(s) spreads to other parts of the country
Establishment of large manufacturing plant > expansion of local job opportunities and population > inflow of business and capital to satisfy increase in local demand (secondary and tertiary development > substantial rise in average income > higher tax base increases gov. spending power > improvements of physical and cultural infrastructure
Core-periphery
Growth of the economic core region labelled as polarisation
Periphery impeded by downward spiral
Term ‘trickle down’ was used to describe the spread of growth from core to periphery
Difference between cumulative causation and core-periphery
The core-periphery stressed to a far greater extent the effect of counterbalancing forces overcoming polarisation, eventually leading to economic equilibrium being established
