Globalisation

Globalisation describes the way in which the world has become more interconnected.
Globalisation has led to an increase in world trade, foreign investment, communication
between different countries and the sharing of ideas.

Globalisation has led to an increase in world trade, foreign investment, communication

between different countries and the sharing of ideas.
In the past, the UK economy was based on activities that took place within the country
and within Commonwealth countries. The growth of globalisation has meant that the
UK economy is now more dependent on other countries. An example of this is the
manufacturing industry. In the 1900s, 55% of the UK population worked in secondary
jobs. The 2011 census showed that this figure had dropped to just 9%. Globalisation has
allowed people to connect with other countries - it is possible to send orders abroad,
locate factories abroad and get products shipped in to UK ports.

Deindustrialisation
The UK has experienced deindustrialisation. There has been a decrease in the amount
of manufacturing taking place in the country and a growth in
the tertiary and quaternary sectors. Traditional industries, such as ship building and
textiles, have declined. This has happened for two main reasons:
1.A global shift in manufacturing to new emerging economies (NEEs), where wages are
lower, working hours are longer and trade unions are sometimes banned.
2.An increase in the number of machines used to carry out work. This is
called mechanisation.

HOW HAVE TRADITIONAL INDUSTRIES DECLINED IN THE UK?

De-industrialisation is the reduction of industrial activity or capacity in
a region or economy, especially of heavy industry or manufacturing
industry. De-industrialisation is one of the most significant economic
processes to occur in the UK. De-industrialisation in the UK has
involved the decline of heavy industries such as coal mining,
shipbuilding and steel manufacturing.
During the twentieth century, the UK went from over 3000 coal mines
to just 30. The last working deep coal mine in the UK closed in
December 2015. The graph below shows the rapid decline in
employment in coal mining in the UK due to mechanisation, increasing
costs of extraction and growing availability of cheap imports.
Government policies
The government manages the UK economy through the Treasury. Each year a budget is
produced, which sets out things such as the minimum wage, spending on public services
and levels of tax.
During the 1980s the UK was performing better than most other European countries.
Several things helped this growth:

•Many state-owned businesses in the UK were privatised, eg British Telecom and British
Gas. They had been owned by the government, but they were sold to individuals or other
companies. This made a lot of money for the government.
•Markets were deregulated. This means that the government became less involved in
running things and some companies had to find better ways to make a profit.
•Lots of factories and coal pits were closed. The government said that they could no
longer compete with foreign countries where wages are lower. This is when UK jobs first
began to go overseas.
•The service sector grew. Wages in the service sector are generally very good.
The UK economy continued to grow into the 1990s. The government had decided to keep
taxes low so people had more money and could afford to buy more things.
In 2008, there was a global financial crisis and the UK entered a period of recession.
Many of the UK's banks, eg RBS and Lloyds Banking Group, were helped out using
government money. This was very expensive for the country and the level of
national debt grew.
Since 2010, a programme of austerity has been in place. The government has made
spending cuts to save money and has carried out quantitative easing, which involves
creating more money. There are attempts to improve productivity so that the UK can
earn more money. There are 24 Enterprise Zones across the UK, eg Birmingham and
Manchester. These locations have incentives for businesses to locate themselves there,
such as reduced taxes and relaxed planning rules.

De-industrialisation is the reduction of industrial activity or capacity in

a region or economy, especially of heavy industry or manufacturing
industry. De-industrialisation is one of the most significant economic
processes to occur in the UK. De-industrialisation in the UK has
involved the decline of heavy industries such as coal mining,
shipbuilding and steel manufacturing.
During the twentieth century, the UK went from over 3000 coal mines
to just 30. The last working deep coal mine in the UK closed in
December 2015. The graph below shows the rapid decline in
employment in coal mining in the UK due to mechanisation, increasing
costs of extraction and growing availability of cheap imports.
WHICH TYPES OF INDUSTRY ARE GROWING IN THE UK?
A post-industrial economy is one that replaces manufacturing with service industries (also
known as tertiary industries). A new sector, the quaternary industry, is now developing in the
twenty-first century UK. The quaternary sector is sometimes called the ‘knowledge economy’
because it involves research and development. This sector includes IT, new creative industries
and biotechnology. Estimates suggest 10-15% of the UK workforce is employed in quaternary
sectors, though it is hard to determine because it overlaps with the service sector.

THE DEVELOPMENT OF INFORMATION TECHNOLOGY

The development of information technology has transformed lives in the UK and has encouraged
economic growth. Examples of the impact of information technology on lives and economic
development include:

1.3 million people are employed in IT

Homeworking and self-employment due to the development of the internet
The UK is viewed as one of the top IT countries in the world and receives overseas investment as
a result. Investment in technology companies totalled £6.3bn during 2018
Technological developments have led to the growth of specialist manufacturing services along
with service and research
Information can be accessed anywhere using mobile devices
The turnover of digital technology companies grew by 4.5% between 2016 and 2017, compared
with 1.7% growth in UK GDP (this is 2.6 times faster than the overall economy)
London-based technology businesses raised £9bn between 2015 and 2018; in second place,
Cambridge picked up £583m of funding over the same period.
Already, the UK represents a global centre of technology talent, accounting for 5 per cent of all
high-growth technology workers employed globally. Only Germany, amongst the UK’s European
rivals, employs more people in the technology sector.
THE DEVELOPMENT OF SERVICE INDUSTRIES
Services provide support rather than manufacturing products. The service industry is the largest
sector in the UK economy both in terms of the number of people employed and economic
output.

Financial services employ over 2 million people and account for 10% of the UK’s GDP. The UK is a
leading financial centre, with London at its centre. Financial services are the most significant
contributor to job creation in the service industry. Insurance technology and financial
technology employers account for 24 per cent and 18 per cent of the high-growth workforce,
respectively.

THE DEVELOPMENT OF RESEARCH

Research and development is part of the rapidly expanding quaternary sector. It contributes
over £3 billion to the UK economy and employs over 60,000 educated people. Research and
development involve biomedical, computer and environmental sectors linked to UK universities.
The UK government and private companies conduct research. Cyber, artificial intelligence, and
cleantech businesses are now employing substantial numbers. All three sectors attract growing
amounts of investment, suggesting they may generate even more jobs in the coming months
and years.
SCIENCE AND BUSINESS PARKS IN THE UK
The development and growth of science and business parks have been an
important aspect of developing the UK’s post-industrial policy.

Science parks are typically located on the edge of university cities. They can be
found in Cambridge, Oxford and Southampton. They have good transport links
and usually have attractive environments. Sometimes, science parks are
located close to or within university grounds. An example of this is the
Newlands Science Park at Hull University.

Graduates are often employed to apply their knowledge and experience to

innovative businesses. Businesses often link closely to local universities and
tap into their research and development.

Over 100 science parks in the UK employ around 75,000 people.

BUSINESS PARKS
Business parks are areas with a small group of businesses in the same land
area. There are many hundreds of business parks across the UK. Business
parks are often located on the edge of major urban areas where there are
good communications, and the land is cheap.

Business parks can contain a range of businesses, from small-scale

manufacturing to research and development. Businesses can benefit from
supplying goods and services to each other.

What are the impacts of industry on the physical environment?

In the past industrial growth has had a significant impact on the environment.
Coal mining led to the creation of spoil heaps, vast mounds of waste material
removed during extraction. Burning coal, to generate electricity, led to
considerable air pollution in cities across the UK. Toxic waste materials from
heavy industry have polluted the land and water supplies.

Due to changing attitudes and strict environmental laws, modern industries

must be more considerate of their ecological impacts. The majority of
industries nowadays develop based on sustainable principles. You need to
know an example of how modern industrial development can be more
environmentally sustainable.
A rural area in the UK is defined as an area with a population of less than 10,000 people. Villages
become “towns" as soon as they pass this figure. Generally, a rural area is usually defined as one that is
relatively sparsely populated and either left as wilderness or with farming as a major economic
activity. We often describe rural areas as countryside.

Rural areas have many characteristics, and although many people view them as countryside area
where farming is the main economic activity, this is no longer the truth. There are a huge number of
economic activities in rural areas as the pie chart opposite shows, and rural areas can thrive in the right
circumstances.

Rural population decline

Rural areas which have a decline in population have been in REMOTE less accessible areas far from
major towns and cities. In these less accessible rural areas many of the younger population move out.
The reasons for this are known as push factors, and for the young people are the shortage of jobs and
a lack of social life.

If population shrinks or the population ages then the SERVICES available could decline. Shops and post
offices become less profitable because of rural depopulation. Bus services may decline leaving the
elderly cut off. This can result in a cycle of rural decline.

NEW DEVELOPMENTS IN INFRASTRUCTURE

The UK government is investing in infrastructure developments. These include new road, rail, port and
airport facilities. The Department for Transport is the part of the government that oversees all forms of
transport within the UK.

Roads
The Highways Agency are responsible for any new major roads in the UK. They are part of the
government and they collect money through Vehicle Excise Duty (VED). Smaller roads are managed by
local councils and roads in Scotland and Wales are managed by either Transport Scotland or the Welsh
Assembly.
The Highways Agency have an ongoing programme of resurfacing roads and building new roads. In
December 2014, the government announced that they would be spending £15 billion on improving
and expanding UK roads. This money involves building smart motorways that use technology to
manage congestion. Smart motorways are planned for busy routes between London, Birmingham,
Manchester and Yorkshire.
Rail network
Network Rail is responsible for running, maintaining and developing Britain's railways. The
number of rail journeys made have doubled over the last twenty years. As a result of this,
£25 billion is being spent to upgrade the network by 2019. Improvements will include
longer platforms that can cope with bigger trains and better stations.

High Speed 1 (HS1) is a fast train link between London and Paris. HS2 is a planned fast train
link between London and the north of England (Manchester and Leeds). It will dramatically
cut journey times, for example the current journey time from London to Birmingham will be
cut from an hour and a half to just 49 minutes. A further extension of high speed rail to
Scotland is possible in the future.

Ports
The importance of UK sea ports has declined over time. Many people now travel by air and
the Channel Tunnel has meant that lorries no longer need to drive to a port to travel
between the UK and France. Cargo ships do still arrive into UK ports,
but containerisation has meant that fewer workers are needed to load and unload them.
Larger ships are now used, which has made less accessible ports redundant.

UK ports remain the largest in Europe, in terms of volume of goods handled. UK ports are
modern and work well, and so the government are not currently planning any major
redevelopments.

Airports
The Airports Commission is the part of the government that deals with UK airports. The
Airports Commission produced a report in 2015, which recommended that the expansion of
UK airports was important for the country's prosperity. This is a controversial issue because
many people living close to airports don't like the noise and some lose their homes to make
space for runways. Airport expansion can lead to a reduction in house prices in nearby
areas.

A new runway has been proposed for Heathrow. The development will generate an
estimated £147 billion over 60 years and 70,000 new jobs by 2050. Flights will run to 40
new destinations. The cost of the scheme is estimated to be £18.6 billion. The proposal has
largely been backed by business groups. However, some special interest groups are
unhappy as there are concerns about the impact on noise and air quality on the
surrounding areas, and are considering actions such as a ban on night flights and a
guarantee that a fourth runway will not be built.

THE NORTH/SOUTH DIVIDE IN THE UK

It has long been recognised that there is a north-south divide in the UK.

What is the divide?

Although government spending on public services is roughly even across the country, many
businesses are choosing to set up in the south. This creates a large wealth divide and those
living in the north of the country can experience lower incomes, higher unemployment and
a lower standard of living than those living in the south.
Strategies to resolve regional differences
Resolving regional differences is a difficult task. The government have
agreed devolution measures, which gives additional power and money to
councils in the north. An example is the NTCA (North of Tyne Combined
Authority). The NTCA was established in the northeast of England in 2018.
It allows the area to make some of their own decisions about how to
spend money. The government have agreed a devolution deal, where an
investment fund worth £600m has been promised to the NTCA over the
next 30 years.
Some people believe that more professional jobs need to be created in
the north. The popularity of universities such as Manchester and Leeds
has encouraged professionals to settle in the north. The relocation of
some businesses and organisations can also help. For example, the BBC
moved some of its departments to the newly-built MediaCityUK in Salford
(Greater Manchester) in 2011. A recent report has suggested that
MediaCityUK has helped Salford to become a “creative and digital cluster."
It also found that employment in Salford grew by 142% between 2010 and
2019.

UK and the wider world: trading partners

The UK has undergone many changes and its position in relation to other countries is
changing.

The place of the UK in the wider world

The UK has strong political links with many countries. For example, the UK is a member of
the Commonwealth, which is one of the world's oldest political groups. The Commonwealth
is a group of 53 countries and it began when those countries were ruled by Britain. Current
membership is optional. The UK also has other political links, such as the Group of Seven
(G7). The G7 is made up of the United States, Canada, France, Germany, Italy, Japan, and the
United Kingdom. They meet yearly to discuss global economic issues.

The links that the UK has with other countries are based on a variety of factors:
Trade – the UK imports and exports goods from many countries. Over 50% of UK trade is
with EU countries. The UK's next biggest trading partners are found in Asia and Oceania.
Foreign exports also include money spent by tourists visiting the country. The UK's biggest
exports are machinery and transport equipment.

Culture – UK literature, music, cinema, sport, television, history

and architecture are important globally. Books, such as the Harry Potter
series, are sold worldwide. UK sports are showcased through events such
as the Olympics, the World Cup, Wimbledon, the Premier League and the
London Marathon. UK architecture can be seen in many commonwealth
countries. Tourists visit the UK to experience the culture and many UK
cities have been labelled 'cities of culture’.

Transport – increasing air travel is strengthening the UK's links with other
countries. In addition to this, the UK has modern port facilities and a high