Changing Economic World

globalisation

the growth and spread is of ideas around the world. this can involve the movement of cultures, people, money, goods and information.

post industrial economy

an economy where the manufacturing industry has been replaced by the service industry/tertiary jobs.

growth corridor

an area that follows a major transport route and is seeing the biggest economic growth happen. e.g. the M4 growth corridor between Bristol and London

pros of globalisation

• goods transported (LICs can access more)

• skilled workers can travel

• ideas travel - different sectors can start to develop

• economic development (technology transfer)

• boosts world trade

• goods are cheaper (access to more materials)

cons of globalisation

• decline in secondary sector (more goods imported)

• loss of jobs

• economic disparities (wealthier countries benefit more)

• environmental degradation

• over-dependence on global markets

why did the M4 develop as a growth corridor?

• beautiful countryside (people want to live there)

• close to main London-Bristol railway

• land prices/rents are cheaper outside London

• Heathrow airport (international connections)

• near to universities - highly educated workforce

science park

a group of scientific and technical knowledge based businesses located on a single site (contains quaternary companies)

business park

an area of land occupied by a cluster of businesses (can also contain manufacturing companies)

benefits of Cambridge science park

• 152 acres of parkland (peaceful environment)

• encourages people to travel sustainably (electric pool bikes for free hire, car sharing scheme, >22% commuters cycle to work)

• revenue of £37billion a year

disadvantages of Cambridge science park

• expensive area to live in and this could further increase house prices

• brain drain effect of other areas as all skilled workers will go here

• increased demand for transport, congestion

what are causes of economic change in the uk?

• government policies

• de-industrialisation

• globalisation

how can industrial development be more sustainable?

• technology to reduce harmful emissions

• desulphurisation (can remove harmful gases from power station chimneys)

• heavy fines for pollution incidents

• conserve, protect and restore (encourage biodiversity)

• monitor and regulate industrial operations

counter-urbanisation

people move to the countryside for a better quality of life. this can lead to a housing shortage and a pressure on the government to allow building on the greenbelt.

social effects of population growth in South Cambridgeshire (4)

• commuters continue to use services in place where they work so negative effect on local economy

• young people can’t afford high house [rices and move away

• 80% car ownership lead to congestion on narrow roads

• gentrification of old farms and breakdown of community spirit

economic effects of population growth in South Cambridgeshire (4)

• lack of affordable housing

• high fuel prices due to high demand

• decline in agricultural employment and farmers sell their land for housing development

• increasing number of migrants leads to pressure on services

social effects of population decline in the outer Hebrides (3)

• the number of school children is expected to fall, may result in school closures

• young people are moving away so there are fewer people of working age

• increasingly ageing population with fewer young people to support them, may lead to care issues.

economic effects of population decline in the outer Hebrides (2)

• most crofts (small sheep farms) can only provide work for up to 2 days a week

• current infrastructure is unable to support the scale of tourism needed to provide an alternate source of income

example of a road development in the uk

A303 ‘super highway’: a £2 billion investment of road widening to be undertaken over the next 15 years. this will create better links between roads, and includes building a tunnel under Stonehenge.

advantages of road improvements

• provides thousands of jobs in construction (boosts local and regional economies)

• congestion will be eased

• makes commutes and the movement of goods easier

disadvantages of road improvements

• causes disruption to commuters and the movement of goods while in progress (improvements are scheduled over 15 years)

• job opportunities may be only temporary

example of a port development in the uk

LIverpool2: a new container terminal at the Port of Liverpool. the scheme involved the construction of a deep-water quay at about £400 million.

advantages of port development

• Liverpool2 has more than doubled the port’s capacity to over 1.5 million containers

• created over 5000 jobs

• boosts economy of the north west

• reduces the amount of freight traffic on the roads

disadvantages of port development

• expensive (costs about £400 million)

examples of rail developments in the uk

HS2: a £98 billion plan for a high speed railway to connect London, Birmingham, East Midlands and Manchester

London’s cross rail: a new railway across the capital that links Reading and Heathrow to Shenfield and Abbeywood (west to east) at a cost of £19 billion

advantages of rail development

• improves journey times

• eases congestion

• offers better connections

disadvantages of rail development

• HS2 caused a lot of opposition from locals and environmentalists (route cuts through ancient woodlands and historic villages north of London)

example of airport development in the uk

the government commission’s project to expand London’s airports:

• a new runway at Heathrow

• a new runway at Gatwick

• increasing the length of an existing runway at Heathrow

advantages of airport development

• benefits passengers

• boosts regional economy by £61 billion

• creates up to 77,000 local jobs

disadvantages of airport development

• expected to cost in the region of £19 billion

• noise pollution for local people

• rivers will have to be diverted

• hundreds of homes will be demolished including the entire village of Longford

• roads moved e.g. M25 re-routed (disruption)

the north-south divide

the north-south divide refers to the real or imagined cultural and economic differences between the south of England and the north of England/the UK

what caused the north-south divide to widen?

• north of the UK are hills and mountainous upland regions, making it harder to develop (poses challenges over climatic conditions)

• the manufacturing industry thrived in the north until deindustrialisation

• higher unemployment levels in the north (many industries have declined)

• slow population growth as more people move south for better jobs (service sector based in London)

• house prices are lower due to less demand for housing (house prices are rising in the South)

strategies to reduce north-south differences (5)

1. assisted areas

2. the northern powerhouse rail project

3. money invested in transport improvements e.g. electrification on the TransPennine railway, HS2, Liverpool2

4. local enterprise partnerships

5. enterprise zones

assisted areas

places the government has identified would benefit from additional help to secure business investment and development

benefits of assisted areas

• could help to distribute wealth more evenly

• could create a positive multiplier effect (increased job creation → increased income tax → local economies boosted → services/businesses can maintain and expand their positions)

problems of assisted areas

• investment may not be sustainable

• businesses might take advantage of the support and then move out of the area

• some of the investments may not benefit local people (e.g. resource extraction)

• some people may be critical of others coming in and ‘taking over’

what is the aim of the Northern Powerhouse Rail project?

to help balance the wealth and influence of London. it is forecast to boost the economy by £14 billion a year by 2060 and will create 74,000 jobs

what are local enterprise partnerships and what is their aim?

LEPs are voluntary partnerships between local authorities and businesses. their aim is to identify business needs in local areas and encourage companies to invest

what is the aim of enterprise zones?

to encourage the establishment of new businesses, creating jobs.

what are benefits of the Commonwealth games for countries who are members?

• construction of facilities provides employment

• cultural integration

• opportunities for discussion e.g. Glasgow benefitted economically from athletes and spectators visiting the city

what are some factors affecting the development of a country?

• healthcare

• education

• soil fertility (← climate)

• natural hazards

• potential corruption

• trade

• war

• income

the development gap

the difference in standards of living between the world’s richest and poorest countries (can also exist within countries)

how can you measure development?

• GDP

• GNI

• HDI

the DTM (demographic transition model)

a theoretical model that shows changes in population information over a period of time

give an example for each stage of the DTM (5)

1. Amazon

2. Afghanistan

3. Nigeria

4. USA

5. Germany

standard of living

the level of wealth, comfort, material goods and necessities available to a certain socioeconomic class in a certain geographic area

physical causes of uneven development

• weather and climate

• landlocked countries

• relief

• water shortages

economic causes of uneven development

• poverty

• trade

top down development

large scale projects with inputs from governments, global institutions and TNCs. the benefit will ‘trickle down’ through the economy so everyone benefits

bottom up development

small scale- community/individual level development. the benefit will grow from the bottom (if people have more money, they will spend more in the local economy so others will benefit too)

short term aid

emergency help usually in response to a natural disaster

long term aid

sustainable aid that seeks to improve resilience e.g. wells to reduce the effects of drought

multilateral aid

richer governments give money to an international organisation (e.g. the World Bank) which then redistributes the money to poorer countries

bilateral aid

aid from one country to another

tied aid

may be given with certain conditions

voluntary aid

money donated by the general public in richer countries and distributed by NGOs

quotas

a limit on the quantity of goods that can be imported

strategies to reduce the development gap

• debt relief

• industrial development

• intermediate technology

• microfinance loans

• aid

• trade and fairtrade

• investment

positives of debt relief

• money saved can be used for basic infrastructure

• money can be used to import vital food supplies

negatives of debt relief

• some countries will still have debt that they will struggle to repay

• countries may get into further debt, expecting that this will also be cancelled

• corrupt governments may keep the money

positives of industrial development

• provides job opportunities

• long term help to the economy and it creates/builds the secondary sector

negatives of industrial development

• not suitable for countries which are already relatively developed

positives of intermediate technology

• provides higher paid occupations

• improves quality of life for locals (provides resources and a source of income)

negatives of intermediate technology

• not suitable for countries which are already relatively developed

positives of microfinance loans

• as small businesses thrive, employment opportunities increase and incomes rise

• allows women to lift themselves and their families out of poverty

negatives of microfinance loans

• loans often go to the less poor because of the emphasis on repayment (interest rates have risen making it harder to repay)

• the money loaned is not always used for business

positives of aid

• projects that develop water and sanitation can improve health and living standards

• provision of medical training, medicines and equipment can improve health and standard of living (reduces health disparities)

negatives of aid

• aid can be wasted by corrupt governments

• can fail if money runs out or if there isn’t enough local knowledge/support

• countries can become dependent on aid rather than developing

positives of trade and fairtrade

• free trade encourages poorer countries to join together to produce goods (producers are paid an agreed minimum price and premium to be invested)

• better price for exports means greater profit made, which can be used for projects which reduce the development gap

• more profit for poorer farmers (reduces wealth disparities)

negatives of trade and fairtrade

• focuses on fair price for farmers so doesn’t address issues of mechanisation and industrialisation

• can become a trap as farmers become dependent on shoppers in richer countries

positives of investment

• develops LICs and also increases profit for the countries that are investing

• improves quality of life in LICs, reducing the gap

negatives of investment

• corrupt governments in LICs might misuse the money invested by companies

• might not necessarily reduce the gap as richer countries/companies’ profit still increases

what was the impact of the rise of the Islamic fundamentalist group Boko Haram in Nigeria?

it created an unstable situation which had a negative impact on the economy because: there was a reduction in investment from abroad and a rise in unemployment. this hindered development.

what is one of Jamaica’s top sources of income and how does it affect its economy?

tourism is one of Jamaica’s top sources of revenue. the industry contributes over 50% of the country’s foreign exchange earnings and employs around 200,000 people (directly and indirectly).

how has tourism benefitted Jamaica?

• tourism benefits local farmers through the sale of produce to hotels (e.g. Sandals Resort Farmers Program distributing $3.5million worth of Irish potato seeds to local farmers so that hotels with buy from them rather than importing)

• investments in infrastructure to support tourists (ports, airports, and roads have been expanded, although ports were prioritised)

• people living in tourists areas like Montego Bay have benefited from an improved quality of life (poverty does still exist though)

• environment has benefited from landscaping projects and the introduction of nature parks

negative impacts of tourism in Jamaica

• cruises are popular but cruise passengers spend less money on the island

• jobs can be seasonal so income is low during low season

• roads+airport developments are slow, some parts of the island remain isolated (the south isn’t as developed)

• large numbers of people still live in poverty

• footpath erosion, excessive waste and harmful emissions

why is Nigeria important globally?

• major exporter of oil

• in 2020 Nigeria’s population was 2.64% of the world population and that number is increasing

• major contributor to UN peacekeeping missions around the world

• diverse economy e.g. telecommunications, financial services and media

• thriving global economic hub in Lagos

why do TNCs locate in foreign countries?

to take advantage of:

• tax incentives

• more relaxed environmental laws

• cheaper labour

• access to a wider market

advantages TNCs bring to Nigeria

• job opportunities stimulate economic growth

• increased tax revenue can be spent on developing infrastructure

• population has access to new consumer goods

• valuable export revenues earned (GDP)

• workers can learn new skills

• TNCs can invest in facilities

• could attract attention from HICs so foreign investment

disadvantages TNCs bring to Nigeria

• exploitation: low wages and poor working conditions

• damage to environment such as oil spills

• much of the profit goes abroad

• economic leakage (money gets sent back to HQ)

• money spent on attracting companies could have been spent on locals’ needs

• could make it harder for local smaller businesses to prosper

• management jobs often go to foreign employees brought in by the TNC

impacts of the Ogale oil spills in the Niger Delta (Shell)

• people have no access to clean water

• dirty water can cause major health problems (low hygiene/sanitation, people can no choice but to drink and cook with the dirty water)

  → strain on healthcare

• people used to rely on fish for food but now fish are dying

• destroyed livelihoods such as fishing, agriculture (contaminated soil+water)

• costs billions of dollars

• pollution, river is destroyed

• destruction of biodiversity

• degradation of natural habitats

• violent conflicts with locals

what is the economic impact of manufacturing?

• regular paid work for people

• manufacturing industries stimulate growth through close links with each other

• revenue from taxes increases as more people are employed

• thriving industrial sector attracts foreign investment

solutions to industrial growth

• building on brownfield sites

• stricter laws to reduce the amount of illegal industries

solutions to urban growth

• introduce stricter waste management

• provide affordable, permanent housing

• healthcare education

• invest in infrastructure

an example of aid which benefited Nigeria

• the NGO Nets for Life provides education on malaria prevention and distributes anti-mosquito nets

• the US AID-funded Community Care in Nigeria project provides support packages for orphans and vulnerable children