ECONOMIC TRANSITION NOTES
1. What is economic transition?
- It involves changing a nation's fundamental economic organization and
creating entirely new free market institutions. The process encourages
stabilizing the economy, reducing budget deficits, and expanding credit
availability. It will also allow prices of commodities to reflect supply and
demand.
2. The five employment sectors
- Primary sector - produces raw materials from the land and the sea.
- Secondary sector - manufactures primary materials into finished
products.
- Tertiary sector - provides services to businesses and to people.
- Quaternary sector - uses high technology to provide information and
expertise.
- Quinary sector - where top-level decisions are made by high-level
decision makers.
3. Clark-Fisher Model
,4. Variations in employment structures between places
- Employment structures vary globally due to a range of factors including:
+) The level of economic development of a country.
+) Economic policies that support specific industries within countries.
+) The ability for countries to trade.
+) Having access to and use of modern technologies in places.
+) The availability of unskilled and skilled workers (the labour force).
- Significantly, several key trends emerge when studying the spatial
variations in employment structures:
+) People in the world’s poorest countries are heavily dependent on the
primary sector for employment.
+) Newly emerging economies (also referred to as NICs) have benefitted
from the rapid growth of manufacturing and more recently, services.
+) Almost all high-income countries (HICs) are now post-industrial
economies; the majority of people work in tertiary employment, and
more recently, an increasing number in the quaternary sector.
5. What are the economic characteristics of LICs, MICs and HICs?
- The World Bank classifies a country’s level of economic development
according to its wealth. This is typically measured by GNI per capita.
- GNI per capita = a country’s average income (per year), by dividing the
gross national income (GNI) by the number of its population (per capita).
, 6. How do the different employment sectors contribute to economics
development?
- The primary sector is important in the initial development of a country’s
economy when a significant percentage of the workforce are employed
in agriculture (pre-industrial stage).
- Importance of primary sector diminishes as secondary employment
grows as countries industrialise.
- The secondary sector fuels economic development as products have
value added in manufacturing.
- As economies develop more skilled, knowledgeable and educated
workers in secondary and tertiary sectors. This can lead to a rise in
educational attainment and higher wages can lead to a positive
multiplier effect in the economy.
- Tertiary sector growth happens in post-industrial countries due to
growth of consumerism, wealth and expertise. This leads to further
economic growth and development, through higher wages, spending
and taxation.
7. What is development and how can it be measured?
- Development is a wide ranging concept that considers how quality of life
can be improved for people. It comprises numerous key dimensions.
- Development indicators are numerical measures of specific aspects of
the quality of life experienced in a place or the extent to which a place is
developed.
- Development indicators can typically classified as economic or social.
- Development can be measured between and within countries.
- Economic development indicators help us understand the economic
development of a country. This is sometimes referred to as the standard
of living.
1. What is economic transition?
- It involves changing a nation's fundamental economic organization and
creating entirely new free market institutions. The process encourages
stabilizing the economy, reducing budget deficits, and expanding credit
availability. It will also allow prices of commodities to reflect supply and
demand.
2. The five employment sectors
- Primary sector - produces raw materials from the land and the sea.
- Secondary sector - manufactures primary materials into finished
products.
- Tertiary sector - provides services to businesses and to people.
- Quaternary sector - uses high technology to provide information and
expertise.
- Quinary sector - where top-level decisions are made by high-level
decision makers.
3. Clark-Fisher Model
,4. Variations in employment structures between places
- Employment structures vary globally due to a range of factors including:
+) The level of economic development of a country.
+) Economic policies that support specific industries within countries.
+) The ability for countries to trade.
+) Having access to and use of modern technologies in places.
+) The availability of unskilled and skilled workers (the labour force).
- Significantly, several key trends emerge when studying the spatial
variations in employment structures:
+) People in the world’s poorest countries are heavily dependent on the
primary sector for employment.
+) Newly emerging economies (also referred to as NICs) have benefitted
from the rapid growth of manufacturing and more recently, services.
+) Almost all high-income countries (HICs) are now post-industrial
economies; the majority of people work in tertiary employment, and
more recently, an increasing number in the quaternary sector.
5. What are the economic characteristics of LICs, MICs and HICs?
- The World Bank classifies a country’s level of economic development
according to its wealth. This is typically measured by GNI per capita.
- GNI per capita = a country’s average income (per year), by dividing the
gross national income (GNI) by the number of its population (per capita).
, 6. How do the different employment sectors contribute to economics
development?
- The primary sector is important in the initial development of a country’s
economy when a significant percentage of the workforce are employed
in agriculture (pre-industrial stage).
- Importance of primary sector diminishes as secondary employment
grows as countries industrialise.
- The secondary sector fuels economic development as products have
value added in manufacturing.
- As economies develop more skilled, knowledgeable and educated
workers in secondary and tertiary sectors. This can lead to a rise in
educational attainment and higher wages can lead to a positive
multiplier effect in the economy.
- Tertiary sector growth happens in post-industrial countries due to
growth of consumerism, wealth and expertise. This leads to further
economic growth and development, through higher wages, spending
and taxation.
7. What is development and how can it be measured?
- Development is a wide ranging concept that considers how quality of life
can be improved for people. It comprises numerous key dimensions.
- Development indicators are numerical measures of specific aspects of
the quality of life experienced in a place or the extent to which a place is
developed.
- Development indicators can typically classified as economic or social.
- Development can be measured between and within countries.
- Economic development indicators help us understand the economic
development of a country. This is sometimes referred to as the standard
of living.
