Economic World 3 - Economic futures in the UK Flashcards
What do major changes in the UK economy affect?
-Employment patterns
-Regional growth
What are the causes of economic change?
-Deindustrialisation and decline of traditional industries
-Globalisation
-Government policies
What is meant by the ‘industrial structure’ (of a country)?
The percentage of a country’s workforce employed in different sectors of the economy.
What are the different sectors of the UK economy?
-Primary
-Secondary
-Tertiary
-Quaternary
Primary sector
The resource sector - involves the collection of raw materials
Secondary sector
The manufacturing sector - involves manufacturing goods into products
Tertiary sector
The service sector - includes finance, teaching, research and development (R&D)
Quaternary sector
The knowledge sector - includes high-tech research and design (R&D), scientists
When talking about trend in economy, what words would be a good idea to use?
-Grown
-Declined
Which model summarises the economic growth of the UK?
The Clarke-Fisher model (paper flashcard)
By 1990, what percentage of jobs in the UK were in secondary industry?
55%
This was during the industrial revolution, when the UK’s economy was dominated by manufacturing.
What % of the UK’s workforce were working in the tertiary and quaternary sectors in 2017?
83%
What declined from the 1960s? (UK)
Secondary industries.
This means the UK now has what we call a ‘post-industrial’ economy.
Causes of economic change - Deindustrialisation and decline of traditional industries
The UK’s industrial base declined as increased automation (use of machines) led to job losses in manufacturing industries.
As other countries industrialised, they could produce goods more cheaply than the UK. This increased competition which meant that some manufacturing industries in the UK were forced to close. More of the UK’s goods now have to be imported from overseas.(costly?)
Automation of farming during the industrial revolution.
-Reduction in the need for manual labour on farms = redundancy
-Farmers sought employment in urban industries with the promise of higher wages = a better standard of living
-So rural to urban migration occurred
Causes of economic change - Globalisation
-Trade has been made easier because of containerisation (where there are standard sized containers allowing for faster transportation and therefore less money wasted)
-Many manufacturing industries have moved overseas where labour costs are lower e.g. M&S to India and China
-Some TNCs have now moved some of their tertiary & quaternary operations to the UK e.g. apple which employs nearly 6500 people (UK)
-Improved communications (internet, zoom)
What proportion of the UK’s GDP comes from foreign trade?
69%
(World Bank, 2022)
(from 38% in 1965)
Causes of economic change - Government policies 1945 - 1979
Industries were run by the state (for example GWR, British gas, British rail, British coal).
Working practices were outdated…
Causes of economic change - Government policies 1979 - 2010
-Key manufacturing industries (previously own and run by the government) were privatised (e.g. steel, ship building)
-Many related areas regenerated into financial centres (e.g. the paintworks, Bristol)
-This led to major job losses but increased efficiency
-Multiple companies fought for customers e.g. rail lines. This competition increased investment and led to more innovation, which ultimately led to better quality services.
Example of government policies 1979-2010
In 1984, PM Margaret Thatcher took down British coal because the industry was too reliant on money from the government
Causes of economic change - Government policies 2010 onwards
The government has carried out lots of deregulation (removing restrictions and taxes on businesses to encourage entrepreneurs and investors to move to the UK.)
Which has led to the growth of more tertiary and quaternary industries.
What has made it easier for UK companies to operate across the world?
(even moving manufacturing overseas!)
Membership of trade agreements, and organisations.
What were the impacts of automation?
-A lower labour cost which increased profit made by secondary industries.
-However, this was at the cost of many people losing their jobs.
Marks and Spencer have moved their clothes manufacturing to India and China to make bigger profits. This has led to economic change because…
…their main manufacturing industries in the UK declined, which has led the proportion of people working in Tertiary and Quaternary sectors to have grown (to 83% of the UK’s workforce).
Since the 1980s, the government has been deregulating industry, removing taxes on businesses. This has caused economic change because…
..the privatisation led to competition between small companies which increased investment and led to more innovation and growth, which ultimately led to better quality services.
BUT it has also led to debates about the balance between economic freedom and the need for regulation to protect consumers and workers.
The UK is a member of the World Health Organisation, which makes it easier for companies in the UK to operate around the world. This has caused economic change because…
…it promotes international trade and collaboration, opening new markets and opportunities for UK businesses while encouraging the exchange of ideas and innovation on a global scale.
=Economic growth, because UK companies can sell more products and services. More business means more jobs and higher incomes for people.
=Better products and services. The exchange of ideas drives innovation and improvement.
=Diversification: Operating in multiple markets means that companies can still thrive if the UK market/ economy faces challenges - by selling in other markets.
=Consumer Benefits: International trade can lead to more competition, which often results in better quality products and lower prices for consumers.
TNCs are moving some of their tertiary and quaternary operations to the UK. This has caused economic change because…
…ever- more people are working in these sectors (83% in 2017), which has helped the UK develop into having a post-industrial economy.
These sectors result in a higher amount of money circulating for the government to invest.
Example of a quaternary TNC based in the UK.
Apple employs 6500 people across the UK.
What are the impacts of industry on the physical environment?
-Pollution
-Use of natural resources
-Damage to nearby habitats
What does growing the economy improve?
The economic and social wellbeing of the people.
Many countries view secondary industries as…
…the first step in economic development. However, they have many negative environmental impacts.
Pollution
-Factories can create soil, air, water, noise, and visual pollution as they operate.
-Air pollution has global impacts.
-Many factories release pollutants as a by-product when processing raw materials or manufacturing goods.
-These can contaminate water resources and the soil, which damages ecosystems. Damaging ecosystems has major knock on effects such as a reduction in biodiversity.
