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).
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.
Fig. 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
| Economic sector | What does it do? |
| Primary sector | Jobs that include extracting raw materials from the land (e.g. farming and fishing). |
| Secondary sector | Jobs that process raw materials (e.g. manufacturing). |
| Tertiary sector | Jobs that provide services (e.g. grocery store clerk, nurse). |
| Quaternary sector | Jobs 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.
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