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3.1 DEVELOPMENT
 Development refers to economic, social, cultural or technological advancement of a
country. Two ways of measuring development are economic development and human
development.
 Economic development is a measure of a country's wealth and how it is generated (for
example agriculture is considered less economically advanced than banking).
 Human development measures the access the population has to wealth, jobs, education,
nutrition, health, leisure and safety - as well as political and cultural freedom.
 Material elements, such as wealth and nutrition, are described as the standard of living.
 Health and leisure are often referred to as quality of life.
 Geographers use a series of development indicators to compare the development of one
region against another.

Define the following terms:

Gross Domestic Product (GDP) is the total value of goods and services produced by a
country in a year.
Gross Domestic Product (GDP) per capita is the total value of goods and services produced
by a country in a year divided by the total population of the country.

Gross National Product (GNP) measures the total economic output of a country, including
earnings from foreign investments.
GNP per capita is a country's GNP divided by its population. (per capita means per person)

DEVELOPMENT INDICATORS
 Health. A country where most of its population has access to advanced medical care is
more developed than a country where the majority do not have access to health care.
 Literacy/Education: the higher the literacy level, the higher the level of development. A
country with higher education is more developed than a country most people have lower
educaation
 Life expectancy - HICs/developed countries have higher life expectancy than developing
countries.
 Composite indices such as Human Development Index - the higher the development
index the higher the Level of development.
 Birth rate: high birth rate means the country is less developed while low birth rate means
the country is developed
 Industry: Less Economically Developed Countries (LEDCs) such as Zimbabwe focus on
PRIMARY INDUSTRIES, such as farming, fishing and mining. MEDCs focus on
SECONDARY INDUSTRIES, such as manufacturing. The most advanced MEDCs tend
to focus more on TERTIARY OR SERVICE INDUSTRIES, such as banking and
information technology. MEDCs also focus on QUATERNARY SECTOR which consists
of those industries providing information services, such as computing, ICT (information
and communication technologies), consultancy (offering advice to businesses) and
Research and Development (research, particularly in scientific fields).
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 GDP, GNP, GDP per capita, or GNP per capita - the higher the GDP,GNP, GDP per
capita or GNP per capita, the higher is the level of development in a country.
 Inflation measures how much the prices of goods, services and wages increase each year.
High inflation can be a bad thing, and suggests a government lacks control over the
economy.
 death rate/infant mortality rate - higher death rate/infant mortality means the country is
less developed while less death rate/infant mortality rate means the country is more
developed.
 transport facilities - LEDCs have low transport infrastructure while MEDCs have better
and modern transport infrastructure.
 water supply - a country where more people have access to safe and adequate water is
more developed than a country where less people have access to safe and adequate water,
 employment rate - the higher the number of employed people in a country, the higher is
its level of development whilst the lower the employment rate the lower is the level of
development.
 urban population - the higher the urban population the higher the level of development
but less people living in urban areas means low development. LEDCs have more people
living in the countryside than in towns.
 mobile/cell phone use - the greater the percentage of people in a country with cellphones
the higher the level of development whilst the lower the percentage of people with cell
phones the lower is the development.
 Nutrition - the higher the nutrition the higher is the level of development but the lower
the nutrition the lower is development.
 population per doctor - MEDCs have a low doctor-patient ratio (few people per doctor)
but LEDCs have more patients per doctor.
 fertility rate/birth rate: the higher the fertility rate/birth rate the lower the level of
development while a lower fertility/birth rate the higher is the level of development.
 % living in poverty - a higher percentage of people in poverty in a country, the lower is
its level of development.
 average age - a youthfull population means the country’s development is low while an
ageing population shows the country has higher level of development.
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HUMAN DEVELOPMENT INDEX (HDI)

HDI focuses on three things life expectancy, education and income
 Education – mean years of schooling and expected years of schooling
 Life expectancy component: Long and healthy life.
 Gross National Income (GNI) per capita adjusted to purchasing power parity standard
(PPP); a decent standard of living.

WHY HDI IS A GOOD INDICATOR

 it is a composite index / it is not based on income alone / it includes three different
indicators; life expectancy / income / education;
 it can be used to directly compare countries / allows you to rank countries;
 Values can be used to note changes over time.
 An overall score is calculated between 0 and 1; the higher the score the more developed
they are.

Suggest reasons why HDI might vary within a country.

Life expectancy can vary within a country due to differences in
 food supply,
 medical facilities,
 disease and pests
 social services like water and sanitation
 natural disasters such as floods, earthquakes, tsunami,

Literacy/education can vary within a country due to differences in

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 wealth/investment,
 level of education and skills
GNI can vary within a country due to differences in
 natural resources,
 climatic factors,
 soil quality,
 degree of industrialisation,
 stability of government/war,
 remoteness/accessibility,
 government focus
 regional multiplier effect,
 migration,
 tourism,

DEVELOPMENT STATISTICS

 Geographers compare the statistics for different countries to see if there is a

relationship or correlation between the data for different countries.
 A correlation helps to show what factors contribute to development. For
example, GDP per capita can be compared to adult literacy rate in a scatter
graph.
 The plotting for each country does not show much on its own, but together they
show a pattern.
 The scatter graph will show that there is a correlation between the wealth of a
country and their adult literacy rate.
 A scatter graph shows three types of relationships/correlation; positive,
negative and no relationship.
 The line which defines the type of relationship is called the BEST FIT LINE/ LINE
OF BEST FIT
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Classification of production into different sectors

• Primary Sector: The exploitation of raw • Secondary Sector: The purification and
materials from the land, sea or air e.g. processing of primary materials into
farming, mining, fishing, forestry finished products e.g. car manufacturing,
food processing or construction
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• Tertiary Sector: The providing of services to • Quaternary Sector: The

individuals and other businesses e.g. teaching, generation and sharing of hi- tech knowledge.
banking, retailing, tourism, insurance, These industries involves research, innovation
transport, driving, health care etc and development e.g. medical research, Google
glasses development or web page
design, food research etc

Put the following these industries Primary –

• Secondary – Tertiary – Quaternary
Car Manufacturing, clothing retail, Coal Mining, Iron And Steel Industry, Teaching,
Farming, iPhone App Design, Dentistry, fishing, tourism, food research, forestry,

• NB all the four types of production are linked.

Employment Structure in LICs such as Nepal, Zimbabwe

LICs typically have a higher percentage of primary industry for several reasons:
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• Low capital costs/requirements for fishing and farming.

• Lots of natural resources in many LIC countries
• Low level of education needed to work in these industries, skills are passed on to younger
generations as they start working.
• Generate foreign income as many products are sold to other countries.
• LICs have smaller secondary and tertiary industries due to the high cost of establishing them
and the need for skilled workers in technology, finance, medicine etc

Employment Structure in HICs such as USA, Japan etc

Employment structure Japan

Developed countries tend to have very small proportions of their population employed in
primary industry due to,
 Mechanisation;
 Movement of people to urban areas;
 Primary work is hard/can be dangerous/may be unreliable;
 Exhaustion of resources/raw materials run out/soil exhaustion;
 Loss of farmland to urbanisation;
 Import of food/raw materials;
 Country industrialises/more factories are built/more services are provided or demanded;
 More or better pay in factories or more reliable work in factories/services or example or
 low pay in primary;
 People become more educated etc.

Globalisation
What is globalisation?
 Globalisation is the process by which the world is becoming increasingly
interconnected as a result of massively increased trade and cultural exchange.
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Characteristics of globalization

- An increase in world trade and the availability of goods and services from other countries
eg banking, insurance, education and tourism.
- Countries more affected by economic changes in other countries eg the world financial
crisis of 2008-2009 which began in USA and spread around the world.
- Cultures in different countries becoming more similar in terms of languages, food, music
and clothing.
- There has been a change in location of some manufacturing industries from MEDCs
such as UK, USA and Japan to LEDCs and NICs
- International population migration has increased and people are more likely to travel
between countries.
- Some of the world’s great cities such as London, Tokyo, New York, Paris and Shanghai
are now global cities since they have become important beyond the boundaries of their
own country.

Globalisation has resulted in:

 increased international trade

 a company operating in more than one country
 greater dependence on the global economy
 freer movement of capital, goods, and services
 recognition of companies such as McDonalds and Starbucks in LEDCs

Although globalisation is probably helping to create more wealth in developing countries

- it is not helping to close the gap between the world's poorest countries and the world's
richest.

Factors which have increased globalisation

 Improvements in transportation - larger cargo ships mean that the cost of transporting
goods between countries has decreased. Economies of scale mean the cost per item
can reduce when operating on a larger scale. Advances in transport particularly in air
travel which has become more cheaper and accessible to more people.
Containerisation of freight has allowed large volumes of goods to be moved efficiently.
 Freedoms of trade - organisations like the World Trade Organisation (WTO) and
European Union promote free trade between countries, which help to remove barriers
between countries.
 Improvements of communications - Advances in communication infrastructure, such
as the internet and cellphones, allow the rapid movement of knowledge and information
between people in different countries..
 Labour availability and skills - countries such as India have lower labour costs (about
a third of that of the UK) and also high skill levels. Labour intensive industries such as
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clothing can take advantage of cheaper labour costs and reduced legal restrictions in
LEDCs.
 The growth of transnational corporations which enable certain products to be found in
many parts of the world

Transnational Corporations (TNCs)

 Globalisation has resulted in many businesses setting up or buying operations in
other countries.
 When a foreign company invests in a country, perhaps by building a factory or a
shop, this is called inward investment.
 Companies that operate in several countries are called multinational
corporations (MNCs) or transnational corporations (TNCs).
 The US fast-food chain McDonald's is a large MNC - it has over 34,000
restaurants in 119 countries.

Examples of multinational corporations

Shell
Shell petrol station in the UK
The majority of TNCs come from MEDCs such as the US and UK. Many multinational
corporations invest in other MEDCs. However, TNCs also invest in LEDCs - for
example, the British DIY store B&Q now has stores in China.

Factors attracting TNCs to a country may include:

 cheap raw materials
 cheap labour supply
 good transport
 access to markets where the goods are sold
 friendly government policies
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 Low cost of land;

 Few labour restrictions/limited trade union activity;
 Lack of environmental restrictions;
 Cheaper to build factory
 Increasing literacy/skill level/educated;
 Workers prepared to work long hours/strong work ethic;
 Ease of global transport of components/products by air/sea/easy to import and export;
 Government incentives eg low taxation;

Positive impacts of globalisation

 Inward investment by TNCs helps countries by providing new jobs and skills for local
people.
 TNCs bring wealth and foreign currency to local economies when they buy local
resources, products and services. The extra money created by this investment can be
spent on education, health and infrastructure.
 The sharing of ideas, experiences and lifestyles of people and cultures. People can
experience foods and other products not previously available in their countries.
 Globalisation increases awareness of events in faraway parts of the world. For example,
the UK was quickly made aware of the 2004 tsunami and sent help rapidly in response.
 Globalisation may help to make people more aware of global issues such
as deforestation and global warming and alert them to the need
for sustainable development.

Negative impacts of globalisation

 Globalisation operates mostly in the interests of the richest countries, which continue to
dominate world trade at the expense of developing countries. The role of LEDCs in the
world market is mostly to provide the North and West with cheap labour and raw
materials.
 There are no guarantees that the wealth from inward investment will benefit the local
community. Often, profits are sent back to the MEDC where the TNC is based.
Transnational companies, with their massive economies of scale, may drive local
companies out of business. If it becomes cheaper to operate in another country, the
TNC might close down the factory and make local people redundant.
 An absence of strictly enforced international laws means that TNCs may operate in
LEDCs in a way that would not be allowed in an MEDC. They may pollute the
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environment, run risks with safety or impose poor working conditions and low wages on
local workers.
 Globalisation is viewed by many as a threat to the world's cultural diversity. It is feared it
might drown out local economies, traditions and languages and simply re-cast the whole
world in the mould of the capitalist North and West. An example of this is that a
Hollywood film is far more likely to be successful worldwide than one made in India or
China, which also have thriving film industries.
 Industry may begin to thrive in LEDCs at the expense of jobs in manufacturing in the UK
and other MEDCs, especially in textiles.

Employees of an assembly factory, making T-shirts in Honduras

A TNC Case Study- NIKE

 Nike’s global headquarters is located in Beaverton, Oregon, USA
 Nike employs more than 700,000 contract workers in over 700 factories worldwide.
 The list includes 124 plants in China, 73 in Thailand, 35 in South Korea and 34 in
Vietnam. More than 75% of the workforce is based in Asia.
 Nike uses six main raw materials to manufacture its products and these are polyester,
rubber, EVA foam, cotton, synthetic leather and leather.
 It is engaged in designing, research, development and worldwide marketing of footwear,
apparel, sport equipment and accessories. The products are then shipped to the rest of
the world with the highest shippments going to North America, followed by Europe,
Middle East and Africa (EMEA) and then Greater China.
 Like many TNCs, Nike subcontracts or uses independently owned factories in different
countries to produce its products.
 Often this takes place in less economically developed countries (LEDCs) where labour
costs are lower than in MEDCs.

How the TNC works...

The costs
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 The figures supplied by Nike for its cost/price chain are as follows: – Contractors are
paid an average of $18 a shoe by Nike.
 This is made up of $11 for materials, $2 for labour, $4 for other costs, and $1 for profit.
 Nike sells the shoes to retailers for $36. The mark up of 100% accounts for the costs of
design, research and development, marketing, advertising, shipping, production
management, other sales and business costs, taxes and of course a profit.
 Retailers mark up another 100% to $72 (on average) to cover wages, shrinkage,
insurance, advertising, supplies and services, depreciation, taxes and profit.

Expansion
 In mid-2003 Nike paid $305 million to acquire retro shoemaker Converse.
 Most large TNCs grow by acquiring other businesses as well as generating their own
growth.

Impacts on host country (Indonesia)

POSITIVE/BENEFITS NEGATIVE/PROBLEMS
• Sets new standards for indigenous • Workers at nine Nike plants in Indonesia
companies (including Jakarta) have been found to suffer
• Outsourcing creates substantial from sexual and verbal abuse, lack of
employment in Indonesia. medical attention and compulsory overtime.
 Nike pays (slightly) higher wages • Suspicions have been raised over the use
than local companies. of child labour.
• Improves the skills base of the local • Company image and advertising may help
population. to undermine national culture.
• The success of the global brand may • Huge demand on water resources & use of
attract other TNCs setting off cumulative fossil fuels.
causation. • Concerns have been raised about the
• Exports are a positive contribution to the political influence of large MNCs such as
balance of payments. Nike
• Contribution to local tax helps pay for • In the late 1980s labour costs in South
new and improved infrastructure. Korea rose, so Nike decided to move
production to Indonesia where costs were
lower.

Impacts on country of origin (USA)

POSITIVE/BENEFITS NEGATIVE/PROBLEMS
• Positive employment impact and stimulus • Nike does not manufacture in the US which
to the development to high level skills in leads to indirect loss of jobs and negative
design marketing and development in impacts on balance of payments as
Beaverton Oregon. footwear is imported.
• Direct and indirect contribution to local and • Trade unions complain over an uneven
national tax base. playing field because of the big contrast in
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working conditions between LEDCs and

MEDCs.

Future
 In 1993, Nike setup a Reuse-a-shoe program to encourage people to recycle
their old shoes.
 Benefits both the environment and community
 Old shoes recycled to make material that can be used for sports surfaces such
as basketball courts, running tracks and playgrounds.