GCSE Revision: Economic change

Click on the following link to download the revision notes: GCSE Revision notes Unit 3 Economic change

A- The relative importance of the primary, secondary and tertiary sectors in countries at different levels of development; change over time and space.
Define the term:

  • Primary industry is the extraction of raw materials from the ground or the sea. It includes farming, fishing, forestry and mining.
  • Secondary industry is the manufacturing of goods using the raw material from primary industry (e.g. a TV or a car) or construction (e.g. a house, a road or new airport)
  • Tertiary industry does not produce anything, but involves the provision of different services to people and to other industries, e.g. schools and hospitals.
  • Quaternary industry: New sector mainly found in HICs (high income countries) which is concerned with information and communication technology (ICT) and research and development (R&D). Universities are part of it. (For GCSE, this sector is part of the tertiary sector.)

What is meant by….Include an example in your answer.

These sectors change with time over three phases as the Clark-Fisher model shows:

  • The pre-industrial phase– the primary sector leads the economy and may employ more than two-thirds of the working population. Agriculture is the most important activity.
  • The industrial phase– the secondary and tertiary sectors increase in importance. The primary sector declines.
  • The post-industrial phase– As the tertiary sector becomes the most important sector, the secondary sector declines and the primary sector employs a small percentage of the active population.

Study Figure 1, which shows the Clark-Fisher model.

The Clark-Fisher Model

The Clark-Fisher Model

Describe how the importance of each sector changes over time. Use data in your answer. (4)

The relative importance of each sector can be used to compare the levels of development between countries.
How are countries classified? By using the GNI per capita.
Gross National Income (GNI): Total value of goods and services produced within a country (i.e. its Gross Domestic Product), together with its income received from other countries less similar payments made to other countries.
For example, if a British-owned company operating in another country sends some of its income (profits) back to UK, the UK’s GNI increases. Similarly, the repatriation of profit from a US-owned company operating in the UK will count towards US GNI, but not count towards UK GNI.

Classification of Countries from the World Bank, July 2012, on the basis of 2011 GNI per capita:
1 – Low income: $1,025 or less
2 – Lower middle income: $1,026 to $4,035
3 – Upper middle income: $4,036 to $12,475
4 – High income: $12,476 or more

Add to this classification the term “Newly industrialised country” (NIC) which  is applied to countries that are experiencing industrialization and rapid economic growth, such as China, India, Brazil, Malaysia, Philippines and Thailand.

  • In an LIC, such as Mali, a high proportion of the active population works in primary industries, especially in farming. This type of country is in the pre-industrial phase.
  • China is an NIC and has a strong manufacturing sector. It is in the industrial phase.
  • HICs, such as Germany, are in the post-industrial phase.

Skills: How to present employment structures?
Pie graphs, divided bars and triangular graphs.
You may be asked to complete one of these graphs and to describe what it shows.
Graphs which show changes over time:
– Line graph and pictograms
– Compound line graphs

How do employment patterns differ between countries?

  • The relative importance of the sectors of industry in countries depends on their level of development.
  • The economy of many LICS is still dominated by primary activities, mainly farming.
  • Typically more than 50 per cent of the workforce is employed in agriculture.
  • The least developed countries, such as Mali, are still in the early stages of economic development.

B- Reasons for the decline in numbers employed in the primary sector in the UK
1- Depletion of resources

  • Decline of mining industry b/c many raw materials used up
  • Reflected in the decrease of the workforce: 1913: > 1 million people employed in coal mines. Now, only 5,500.

2- Cheap imports

  • Cheaper to import raw materials from abroad as raw materials left in the UK difficult to mine.
  • E.g. iron ore from Norway and coal from Russia which used to be mined in South Wales.

3- Mechanisation

  • Need for agricultural workers reduced as machinery has replaced many jobs formerly carried out by men.

4- Social change

  • Major change in people’s attitude towards primary sector jobs often seen to be dirty and physically demanding.
  • Fewer career prospects.
  • Better paid and less physically demanding jobs in the tertiary sector (more regular hours/located in urban areas)

5- Government attitudes to the value of primary industry

  • Vary from place to place and over time.
  • LICs: whole of the country’s economy based on primary industry =  high value of primary industry.
  • As countries develop over time the value of primary industry decreases as more secondary industries spring up.
  • In oil-producing countries such as Saudi Arabia, still high value of primary industry.
  • In many HICs, primary industries such as farming are of value to feed their population but the main sector of industry is tertiary.

Primary industry in the UK has declined in recent years. Suggest reasons why. (4)
Explain why the numbers employed in the primary sector in the UK have declined over the last 50 years. Use examples in your answer. (4)

C- Reasons for the decline in the secondary sector in the UK

1-Cheaper production in LICs and MICs

  • Relocation of many manufacturing industries to MICs and LICs. Why? Lower production costs. Why? Cheap labour e.g. China
  • Lack of rules and regulations in the productive process.
  • Government grants to help the establishment of industry. E.g. Brazil and Fiat

2- Globalisation

What is globalisation?
It is the growing economic interdependency of countries worldwide which has been brought about by technological advancements. The world is becoming increasingly interconnected as a result of massively increased trade.
The biggest companies are no longer national firms but multinational corporations with branch plants in many countries.

Reasons for globalisation

  • Firms can keep in contact with producers easily and quickly using the internet.
  • Developments in transport technology: goods can be moved around the world quickly and easily.
  • Development of aircraft and containers, efficient motorway networks which cross Europe.

Named example: Marks and Spencer

  • Many products are made in Portugal where land and labour costs are less and then transported to the UK by lorry using the European Motorway system.
  • Other manufacturing plants in Sri Lanka, Morocco, the Far East and Middle East

Globalisation has caused a decline in secondary industry in the UK. Suggest reasons why. (4)

3- Mechanisation
Increased use of machinery and advances in technology  (robots)= large decrease in the number of people employed. E.g. Car industry

4- Government policies

  • Withdrawal of government help to industries. For instance:
  • In 1967: Formation of the British Steel Corporation, a nationalised company, owned and run by the government to protect the production of steel in the country and to keep employment high in the declining industry.
  • Since British Steel was a main employer in depressed regions, it had to keep many mills and facilities operating at a loss. Therefore, the company was sold back in 1988. Under private control the company has dramatically cut its work force.

5- Government attitudes to the value of secondary industry

  • Vary from place to place and over time.
  • HICs: As much of the manufacturing is done abroad in MICs, the government of some countries, for example the UK, has tried to keep some manufacturing in the country by offering development grants to foreign manufacturers. E.g. late 1980s, Toyota were offered incentive to set up their plant in the UK.
  • Change of attitude: the UK government now concentrates on the development of tertiary industry.
  •  Over the last twenty years: China has put a high value on the growth of secondary industry to help the country to develop.

Suggest reasons for the decline in the secondary sector in the UK. (4)

D- The growth of the secondary sector in China.

China (UMIC): GNI per capita: $5,680 in 2012/ population: 1.351 billion (2012)
A- Reasons for growth: (6)

1- Physical factors

  • Raw materials: Great wealth of natural resources: coal, oil and natural gas.
  • Location: Geographical position beneficial for its development: markets in South Korea, Taiwan and India/ on major trade routes.

2- Human factors

1- Workforce:

  • Plentiful supply of workers
  • Rural-urban migration: people moving from rural areas to find a job due to the modernisation of agriculture.
  • High unemployment of 25% therefore lowest salaries in the world

2- Changes in government policy:

  • Laws which used to stop people investing in China abolished.
  • Many companies from foreign countries have factories in China.

3- Education:

  • Increase of literacy levels over the past 20 years: 90%.
  • China has both large numbers of unskilled workers and a growing numbers of highly skilled workers.
  • E.g. China trains 600.000 new engineers every year.

4- Private enterprise:
In the past: manufacturing was state-owned. Nowadays: 20% of firms are privately owned.

5- Energy: Development of hydroelectric and nuclear power stations.

6- Infrastructure improvement: building of many new roads and new factories

7- Globalisation

  • Companies in HICs have goods produced in LICs at a fraction of the price of the manufacturing process in the HICs.
  • China has a large workforce which can be employed cheaply.
  • Easy transport around the world.

B- Impacts of growth (positive and negative) (6)
– Economic (positive)

  • Unprecedented growth:  With a population of 1.3 billion, China recently became the second largest economy and is increasingly playing an important and influential role in the global economy.
  • GDP growth averaging about 10 percent a year has lifted more than 500 million people out of poverty.

– Social

  • Very little spending on social structure. E.g. spending on health lower than in the 1980s
  • However, positive input in education: decrease of illiteracy (see bullet point 3 above)
  • Few laws to protect the workers, particularly the migrant workers (200 million). Why?

Under the Chinese hukou (residence permit) system, most migrants still maintain rural resident status – even those who may never have lived in or even visited the rural villages to which their hukous are tied. This hinders migrants’ access to critical social services and benefits (like health care, education, and credit) in their de facto home cities.

– Environmental

  • 16 of the world’s 20 most polluted cities are in China. Why? 75 per cent of China’s energy is still produced from coal.
  • In the whole country there are 760,000 recorded deaths a year from air and water pollution.
  • 80 per cent of rivers are below the standard for fishing and 90 per cent of underground water in urban areas is polluted.

E- Reasons for the dramatic growth of the tertiary sectors.

1- A rise in the demand for services linked to an increase of disposable incomes
Disposable income is the amount of money which an individual has available to spend on non-essential items after essential bills have been met. The average disposable income doubled between 1987 and 2006. Rise in luxury services such as beauticians and health clubs.

2- The development of new technologies and services

  • Computing and telecommunications sector
  • High demand for mobile phones
  • Development of the Internet and websites
  • Call centres which answer calls from numbers given on internet sites or make unsolicited calls. There are 5,675 call centres in the UK employing 1,125,000 people. That means 4 per cent of all workers are now employed at call centres.

3- Decrease in employment in the primary and secondary sectors;
More people employed in the tertiary

4- Demographic changes

  • People in their late twenties:

Late marriage and fewer children: more disposable income and more free time to spend on services such as entertainment, socialisation and beautification services.

  • Ageing population (more people living longer)

Increasing number of wealthy retired people with money (the ‘grey pound’) and time to spend on leisure and tourism.

Saga offer an array of products and services exclusively for the over 50s, including insurance, home care, holidays and the UK’s bestselling monthly magazine.

Outline how disposable incomes and demographic changes have caused a growth in the tertiary sector since 1970. (4)

1.2 Factors affecting the location of primary, secondary and tertiary activity, illustrated by reference to an activity in each sector.
Nearly every economic activity is found in a particular place for good reasons:
Location factors:

  • Labour supply
  • Accessibility
  • Raw materials
  • Distance to market
  • Government incentives
  • Power supply

A- Primary industry: Factors
Main factor: Physical factor

Availability of raw materials
Economic factors
Market and accessibility

Case study: China clay extraction in Cornwall
Kaolin, also called china clay, is a soft white clay that is an essential ingredient in the manufacture of porcelain and is widely used in the making of paper, rubber, paint, and many other products.
Factors which explain its location
Kaolin only found in the south-west of England.
Demand for kaolin for the production of porcelain from the 19th century.
Pottery manufacturer Josiah Wedgwood based in Stoke-on-Trent èmarket for kaolin
Way of transporting the raw material to the factory where it was made into the finished product.
train to ports on the south coast of Cornwall
Ships took raw material to Liverpool
Transport by barge along the Trent and Mersey Canal to Winsford in Cheshire
Last 30 miles to Stoke-on-Trent by packhorse
Nowadays
80 per cent of the China clay extracted is used by the paper industry
12 per cent by the ceramic industry
The rest in products such as toothpaste and paint
Still transported by train to ports

B- Location of secondary industry
Explain the reasons for the location of an activity in the secondary sector. (6)
Why did Toyota locate at Burnaston, near Derby?
5 main reasons
1- Accessibility
Excellent transport routes. On the junction of two main trunk roads. This allows easy transportation of parts and the finished product throughout the UK
2- Incentives
Derbyshire County Council offered to buy a £20 million stake in the company. It also pledged to improve the transport infrastructure.
3- Room for expansion
Location on the edge of the city. Greenfield site (an area on the edge of the city, which has never been developed in any way) with ample room for expansion. Large area of land: 280 hectares
4- Suppliers of component parts
The area has a tradition in car manufacturing. There are many suppliers of component parts and engineering components
5- Attractive location for managerial workers
Attractive village location such as Findern for managerial workers.
The Peak District National Park, which is closed by, has many opportunities for leisure activities.
C-Location of tertiary industry
Less dependent on geographical factors. Given good transport, energy and communications, tertiary companies can locate anywhere.
Case Study: David Lloyd Health Club in Hatfield-Reasons for its location in Hatfield
1- Accessibility
a- Excellent transport system including wide roads, bus route, cycle and pedestrian lanes.
b-Proximity to many large firms whose workers use the Health Club
c-Next to a large indoor shopping area, the Galleria. People can shop and go to the club with just one journey.
d- Within walking distance of Hertfordshire University, a potential  source of clients
2- Market
Salisbury Village. A large area of executive and middle class housing. Add 1b, 1c and 1d
3- Attractive location
Modern design to attract potential health club clients
Attractive landscaped area to attract workers

D- Explain how the factors affecting the location of industry can change over time. (3)
The location of much retailing has changed, moving from urban centre to urban fringe. The reasons for this shift are linked to accessibility, the rise of big supermarkets and lifestyle changes.
New supermarkets around the edges of towns and cities, often part of big retail parks or shopping complexes such as the Trafford Centre in Manchester.
Why not in the centres of towns?
They require a lot of space. Land is much cheaper on the edges of urban areas than in their centres.
Supermarkets want to be reached by as many customers as possible. Being on the edge of town will often mean that the supermarket can be fairly easily reached by people from nearby towns.
Urban centres suffer from traffic congestion and car-parking charges, and that tends to put shoppers off.
Bus services are provided to many of supermarkets.

E- The costs and benefits of de-industrialisation in rural areas.
In the past, a number of different industries could be seen in the countryside for instance mines and quarries. Many rural areas are no longer used for industry purposes.
Deindustrialisation has been a mixed blessing. There have been costs and benefits.

Costs
1-Loss of jobs in rural areas.
2-Break-up of rural communities, as people move to towns and cities to find work.
3-Derelict industrial buildings and disused quarries scar the landscape.
4-Need. to clean up old industrial sites-demolishing old buildings, filling in old pits and removing toxic waste
Benefits
1-Less environmental pollution.
2-Old industrial buildings that can be made into tourist attractions.
3-The opportunity to remove ugly industrial buildings from the landscape.
4-The chance to return land to farming (reagriculturalisation) or forestry-or to create new wildlife habitats.
5-The opportunity to use brownfield sites – area which is no longer used for industry -for new housing and services.

Named examples of costs:
3- The extraction of coal in South Wales left the area with many waste heaps which were potentially dangerous.
1- South Wales also suffered from a loss of employment in the mining industry which impacted on the iron and steel industry.
4- The extraction of sand and gravel around Reading in Berkshire left many dangerous water filled quarries.

Named examples of benefits:
Deindustrialisation in the Reading area (
extraction of sand and gravel)
Old quarries are now being used in a number of different ways.
4- Former gravel quarry now agricultural land.
2- Copthorne Hotel, next to 10 acre lake. The hotel has many sporting facilities including water sports. It provides a number of jobs for the local community.
5- Watersports centre for use by the general public.
Green Park, which is a science park covering 70 hectares and employing 7,000 people
Madejski  stadium, built on waste tip which was an old gravel quarry. The land cost £1.

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