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Changing Economic World

Think about how phones are designed in the USA, raw metals are extracted in Guinea, shipped and manufactured in China, and sold in stores throughout Europe. Pretty cool, right? What about how India is now one of the world's fastest-growing economies? The world is becoming increasingly interconnected through Globalisation, and development is increasing across the globe. These are great examples of how our changing economic world is taking shape. This is the beginning of an entirely new topic, where we'll be exploring examples of world economic change, and challenges in the global economy. This explanation will outline the topics you'll learn about in simpler detail, but make sure you read the explanations linked throughout! Let's dive right in.

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Changing Economic World

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Think about how phones are designed in the USA, raw metals are extracted in Guinea, shipped and manufactured in China, and sold in stores throughout Europe. Pretty cool, right? What about how India is now one of the world's fastest-growing economies? The world is becoming increasingly interconnected through Globalisation, and development is increasing across the globe. These are great examples of how our changing economic world is taking shape. This is the beginning of an entirely new topic, where we'll be exploring examples of world economic change, and challenges in the global economy. This explanation will outline the topics you'll learn about in simpler detail, but make sure you read the explanations linked throughout! Let's dive right in.

Changing economic world definition

Economies and Economic Activity vary from place to place and country to country, and have been rapidly changing over time. This is the definition of our changing economic world.

The economic activities that take place around the world can be understood as the world economy.

Through processes such as Globalisation and development, our economic world has and is continuing to change. In this topic, you're going to learn about Globalisation and the economy, as well as development across the world.

Globalisation

Globalisation has had a huge impact on the economic world that we live in.

Globalisation is the way that the world has become more connected, through increased flows of people, technology, goods etc.

Globalisation has impacted economies across the world; cheaper products, improved standards of living, expanding markets, improving innovation, and the list goes on. Take a look at the Economic Impacts of Globalisation explanation for information on how the UK has been impacted by globalisation processes.

Development

As geographers, development is a super important theme within geography. Development refers to the progress of a country's economy, living standards, and quality of life. As countries develop, the economic world changes.

Development indicators

Development indicators are measurements to show levels of economic and social development within a country, or quite simply, how developed a country is. These indicators are measurements like the Gross Domestic Product (GDP), Human Development Index (HDI), Life Expectancy, literacy rate, and many others. Make sure you take a look at the Development Indicators explanation for more details on what these indicators mean and what they measure.

Some countries have high levels of development, while others have lower development levels. To better understand how they compare to each other, the World Bank publishes information on the income and economic development of each country. They categorise countries into three classifications:

  • Lower Income Countries (LICs)
  • Newly Emerging Economies (NEEs)
  • Higher Income Countries (HICs).

This means that there is a big difference between LICs and HICs in their levels of development. This difference is known as the Development Gap. With this gap, it is clear that development across the world is uneven.

Uneven Development

Uneven development is the varying levels of development between countries. Uneven development contributes to the development gap and global inequality.

Global inequality is unequal access to resources and services across the world. HICs tend to have more of these than LICs or NEEs, creating inequality among each other.

The causes of uneven development across the world can be split into three categories; physical, economic and historical.

  • Economic factors: the cycle of poverty, global trading systems.
  • Physical factors: climate, natural resource curse theory, coastal vs landlocked countries.
  • Historical: colonialism.

As a result, uneven development can cause wealth disparities (between countries and within countries), health disparities (changes in Life Expectancy), and international migration (as a result of push and pull factors).

The consequences of uneven development are issues that not only residents in LICs and NEEs experience, but also HICs. This is because the world economy is closely linked (globalised), with uneven development occurring in one place and the consequences having a ripple effect throughout the world.

Make sure you read the explanation on Uneven Development, for more details on causes and consequences!

Population and development

Population levels are a pretty big part of development. Generally, higher populations are found in less developed countries, whilst lower population rates are found in more developed countries. This can be demonstrated by Demographic Transition Model (DTM). This is a graph demonstrating the different development stages a country may go through over time, based on population measurements (birth rates, death rates, and total population). These 5 stages are outlined in detail in the Demographic Transition Model explanation!

Population Pyramids can also show this; these are graphs demonstrating the population structures of a country. As a country develops socially and economically along these stages, different population structures can take place.

Changing Economic World Demographic Transition Model and Population Pyramids diagram StudySmarterFig. 1 - the Demographic Transition Model and population pyramids

Make sure you read the explanations on Population and Development and Rapid Population Growth for more on how population and development are intertwined.

Challenges in the Global Economy

A big challenge in the global economy is the development gap, and how it can be closed. The global development gap is a pretty big issue, which is why finding strategies to close the gap, is super important. Some of these methods include:

  • Investment
  • Tourism and industrial development
  • Money; aid, debt relief, microfinance loans
  • Intermediate technology
  • Fairtrade

Now, closing this gap brings some pretty big challenges. Some countries just happen to be more vulnerable to things like Natural Disasters or climate change or may be so tied up in conflict and corruption, further development is difficult. Even tourism and TNC investment have their problems.

Take a look at the Closing the Development Gap explanation for more on strategies and challenges.

Examples of World Economic Change

As different countries' economies continue to develop, many changes occur within their country as well as internationally. These changes are caused by major shifts in technology, the economy, and politics. In the next section, we'll take a brief look into examples of economic changes that have been occurring in the UK, a developed country, and Nigeria, a developing country.

UK Economic Growth

The Changing UK Economy has been visible throughout history, and the place of the UK in the World is pretty important. The UK's economic growth began well before the 1800s. Like many countries at the time, most people took up jobs in the primary sector e.g. farming, fishing, or mining. However, after the 1800s, a strong period of industrialisation shifted the economic structure towards the secondary sector.

Industrialisation is the process of an economy changing from the primary sector to the secondary sector through increased manufacturing.

After the industrial period (around the 1960s), jobs in the tertiary and quaternary sectors began to dominate. Currently, the tertiary and quaternary sectors dominate most jobs available, employing over 80% of the UK workforce. This is usually the case for most HICs.

Economic sectorWhat does it do?
Primary sectorJobs that include extracting raw materials from the land (e.g. farming and fishing).
Secondary sectorJobs that process raw materials (e.g. manufacturing).
Tertiary sectorJobs that provide services (e.g. grocery store clerk, nurse).
Quaternary sectorJobs that provide information (e.g. research, software development).
Table 1

The UK economy has been changing as a result of quite a few different factors:

  • Deindustrialisation; the reduction of the industrial and manufacturing sector of an economy.
  • Government Policies Affecting the Economy, like privatisation, deregulation, austerity policies, and other investment policies, like Changing Transport Infrastructure.
  • Economic Impact of Globalisation.

These changes are not unique to the UK. They are reasons for a changing economic world.

What is very interesting about the UK, is that the country is economically uneven. The south of the UK is significantly more economically developed than the north, creating a North-South divide. Rural Change is also occurring in the UK, with some areas experiencing growth, and others experiencing a decline.

Changing Economic World Nigeria

Some NEEs are also experiencing significant economic change and rapid growth. Let's briefly outline how economic development is occurring in Nigeria. Nigeria is rapidly developing, however, issues such as corruption and conflict may hold them back from developing further. Take a look at the explanations on the Development of Nigeria, Environmental Development of Nigeria, Social Development of Nigeria, Economic Development of Nigeria, and Nigeria Country Profile for more!

Changing Economic World - Key takeaways

  • Through globalisation and global development, our economic world is changing.
  • Levels of development in a country can be shown by development indicators. Uneven development is an issue globally, resulting in a development gap. Closing this gap brings many challenges.
  • Population and development have an intertwined relationship.
  • The UK and Nigeria offer great examples of economic change.

References

  1. Fig. 1: demographic transition model and population pyramids (https://commons.wikimedia.org/wiki/File:Demographic-TransitionOWID.png), by Max Roser (https://ourworldindata.org/world-population-growth), Licensed by CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0/). Changes made by Bugefun.

Frequently Asked Questions about Changing Economic World

Development and globalisation are the main reasons for the change in the world economy. 

There are several changes going on, for example, uneven development, de-industrialisation, and globalisation. 

NEE stands for Newly Emerging Economy in Geography. Examples include India or Nigeria. 

Economic change is important because it can indicate increased development or increased globalisation.

The UK economy has moved away from the secondary sector and primarily has jobs in the tertiary and quaternary sectors. This is due to de-industrialisation, globalisation, and government policies. 

Final Changing Economic World Quiz

Changing Economic World Quiz - Teste dein Wissen

Question

Why is Nigeria referred to as the "giant of Africa"?

Show answer

Answer

Nigeria is known as the "giant of Africa" because it has the continent's largest economy and population.

Show question

Question

________ is a Nigerian megacity and the largest urban area in Africa

Show answer

Answer

Lagos

Show question

Question

(True or False) Nigeria’s Muslim North is wealthier and more developed than its Christian South

Show answer

Answer

False

Show question

Question

How many ethnic groups and languages does Nigeria have?


Show answer

Answer

250 ethnic groups and 500 languages

Show question

Question

By 2050, Nigeria’s population is projected to reach and surpass____million

Show answer

Answer

400

Show question

Question

(True or False) Most of Nigeria’s earnings from oil go to fund its government.


Show answer

Answer

True

Show question

Question

What types of conflict are common in Nigeria?


Show answer

Answer

ethnic and religious

Show question

Question

When government officials steal public funds, this is called_______


Show answer

Answer

corruption

Show question

Question

What place in Nigeria has been largely destroyed by the oil industry?


Show answer

Answer

Niger Delta

Show question

Question

(Choose one: Females or Males) have much lower literacy rates in Nigeria


Show answer

Answer

Females

Show question

Question

The number of MSMEs in Nigeria’s informal economy sector is approximately _____


Show answer

Answer

40 million

Show question

Question

Nigeria can be considered a middle-income country because

Show answer

Answer

Its GDP is #27 in the world

Show question

Question

(True or False) Most of Nigeria’s agricultural production is for export.


Show answer

Answer

False

Show question

Question

_____ is the major importer of Nigeria’s oil, and _____ is Nigeria’s largest source of imports.


Show answer

Answer

India is the major importer of Nigeria’s oil, and China is Nigeria’s largest source of imports.

Show question

Question

Which are NOT features of Nigeria's economy?

Show answer

Answer

Net food exporter

Show question

Question

Population ___ show the population numbers, including gender and age.

Show answer

Answer

pyramids.

Show question

Question

What can a population pyramid show?

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Answer

Birth rates

Show question

Question

Population pyramids stay the same forever

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Answer

True

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Question

What are dependants?

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Answer

The young and elderly who rely on the economically active age groups to support them

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Question

What do young dependents need?

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Answer

Education

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Question

What do elderly dependents need?

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Answer

Retirement payments

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Question

How many population pyramid stages are there?

Show answer

Answer

5

Show question

Question

What is Stage 2 characterised by?


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Answer

High birth rate, high death rate, high population growth, growing population size

Show question

Question

What is Stage 3 characterised by?

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Answer

Rapidly declining birth rate, slowly declining death rate, high population growth rate, increasing population size

Show question

Question

What is another term used for Stage 2?

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Answer

Expansive

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Question

What stage(s) are HICs usually in?

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Answer

Stage 1

Show question

Question

What stage(s) are LICs usually in?

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Answer

Stage 1

Show question

Question

What stage(s) are NEEs usually in?

Show answer

Answer

Stage 1

Show question

Question

What stage is this population pyramid in?


The birth rate and death rate are low and vary. The population growth rate is back to nearly zero with a high population size. 


Show answer

Answer

Stage 1

Show question

Question

What stage is this population pyramid in?


high birth rate and a high death rate.  May also be experiencing high infant mortality rates and high child mortality rates.

Show answer

Answer

Stage 1

Show question

Question

What stage is this population pyramid in?


high birth rate and a rapidly declining death rate. The population growth rate is very high and the population size is rapidly increasing. 

Show answer

Answer

Stage 1

Show question

Question

What stage is this population pyramid in?


Birth rates are slowly falling while death rates are low. This means population growth rates are negative, and the population size is slowly falling.

Show answer

Answer

Stage 1

Show question

Question

What is Stage 4 characterised by?

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Answer

Low birth and death rate, low population growth rate, stable population size

Show question

Question

What is uneven development?

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Answer

The differences in development across the world, and how development takes place at different speeds.

Show question

Question

What is the standard of living?

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Answer

The amount of wealth or goods that people have.


Show question

Question

What is the quality of life?


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Answer

The access to health, or the amount of comfort/leisure and feelings of safety.

Show question

Question

How do we know if a country is developed?

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Answer

Using development indicators or measures of development.


Show question

Question

True or false: the development continuum helps to show a scale of development, with the least and most developed countries, and the countries in between. 


Show answer

Answer

True

Show question

Question

What are some physical causes of uneven development?

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Answer

  • Climate
  • Natural resource curse theory
  • Coastal vs landlocked countries

Show question

Question

What is another name for natural resource curse theory?

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Answer

The paradox of plenty.

Show question

Question

How can disease limit economic growth?

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Answer

Disease causes sickness (and death), meaning people cannot go to work. This reduces the workforce and limits its levels of productivity, limiting economic growth.

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Question

What are some of the economic causes of uneven development?

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Answer

  • The cycle of poverty
  • Global trading systems

Show question

Question

What are raw materials? 

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Answer

Materials that other things are made from. Coffee beans are a raw material. Coffee is the product.


Show question

Question

What is colonialism?

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Answer

The control of countries by other countries. 

Show question

Question

What are some consequences of uneven development?


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Answer

  • Wealth disparities
  • Health disparities
  • International migration

Show question

Question

What is the GDP of America? 


Show answer

Answer

Over $19 trillion.

Show question

Question

True or false: life expectancy is often higher in LICs. 

Show answer

Answer

False

Show question

Question

What are push and pull factors?

Show answer

Answer

Push factors are the reasons that people move away from a country. 

Pull factors are the things that attract people to a new country. 



Show question

Question

What causes changes in the economic world?

Show answer

Answer

Development and globalisation

Show question

Question

Development classifications are set forever

Show answer

Answer

True

Show question

Test your knowledge with multiple choice flashcards

By 2050, Nigeria’s population is projected to reach and surpass____million

Nigeria can be considered a middle-income country because

Which are NOT features of Nigeria's economy?

Next

Flashcards in Changing Economic World359

Start learning

Why is Nigeria referred to as the "giant of Africa"?

Nigeria is known as the "giant of Africa" because it has the continent's largest economy and population.

________ is a Nigerian megacity and the largest urban area in Africa

Lagos

(True or False) Nigeria’s Muslim North is wealthier and more developed than its Christian South

False

How many ethnic groups and languages does Nigeria have?


250 ethnic groups and 500 languages

By 2050, Nigeria’s population is projected to reach and surpass____million

400

(True or False) Most of Nigeria’s earnings from oil go to fund its government.


True

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