1. Economic activity and energy
Unit B4:
Economic activity and energy

2. Economic activity and energy
Key idea 1: Economic activity sustains people and involves output from a number of different economic sectors.
Key idea 2: The location and growth of particular types of economic activity are influenced by a range of factors.
Key idea 3: Increased economic production creates a rising demand for energy and/or energy efficiency.

3. Key idea 1: Economic activity sustains people and involves output from a number of different economic sectors.
The classification of employment by sector: primary, secondary, tertiary and quaternary.
The relative importance of these economic sectors changes with development and varies between and within countries.
Informal employment: characteristics and causes.
Graphical representation of employment sector data.
A comparative study of sectoral shifts in one HIC and one LIC the textbook actually compares 3

4. Key idea 2: The location and growth of particular types of economic activity are influenced by a range of factors.
Factors affecting the location and growth of tertiary and quaternary activities (prosperity, new technology, accessibility, transport, government policy).
Factors affecting the changing location of manufacturing (TNCs, raw materials, labour, new technology, government policy).
Reasons for the location of factories or services (fieldwork opportunity).
Case study of the factors affecting the development and location of one high-tech industry.
Case study of recent employment changes within an area of a HIC.* could not see one of these in the textbook.

5. The rising demand for energy and the energy gap.
Key idea 3: Increased economic production creates a rising demand for energy and/or energy efficiency.
The rising demand for energy and the energy gap.
The concept of ‘precious’ energy and the need for energy efficiency.
The relative merits of using renewable (eg wind, solar and nuclear power) versus non-renewable sources of energy (eg fossil fuels).
Research into energy sources of home country.*
+ coursework bits already covered
* Have you done this one already?

6. These pictures are in a particular order because ….
What is the pattern? Primary, secondary, tertiary, quaternary economic activity
Can you name any other primary ec act? Mining, fishing,
What is special about primary? – they grow extract or otherwise acquire raw materials
Can you name any other secondary ec act? Any job that takes raw/processed materials and turns it into something else
What is special about secondary? – see above
Can you name any other tertiary ec act? Doctors, shop workers, transport workers
What is special about tertiary? – they provide services of all kinds – known as the service sector
Can you name any other quaternary ec act? Inventors scientists designers architects computer programmers consultants
What is special about quaternary? – they invent and make new things – develop new ideas – give advice
Dustbin is on

7. In the UK Things have changed a bit over the years
What are the changes?
Why have they occurred?
Preindustrial more than 2/3 work in primary - heavy on labour, light on machines
Industrial: secondary, tertiary increasing but primary decreasing fast - increased mechanisation is all areas
Post industrial tertiary the most important while primary and secondary become less important
Increased mechanisation means less people needed in agriculture - along side the industrial revolution - manufacturing moves into factories. Finally as a country gets more developed, costs increase and there are other better places to carry on production.
Economic sectoral shifts

8. The employment structure vary from one place to another
What kind of place do you think these 3 come from? Which is similar UK before the industrial revolution really got going? While it was an industrialized society? As a post-industrial society?
Do you know how the size of each sector varies between countries which have different levels of economic development?
Do you know why this is the case?
Use the example below to answer these questions
In LICs, more people are dependent on primary economic activity, such as agriculture. For example in Afghanistan 4/5 of the people work on the land. This is because in the main the farmers are subsistence farmers with little machinery. They have little to sell and what there is fetches very little, as primary products do not make good prices
Because of this they do not have the money build factories nor have full education and good health care, so few people are employed in tertiary activites
What kind of country is Malaysia? MIC What is its most important area of economic activity?
So in MICs more people are employed in the secondary economic areas in factories for instance?? ( In Malaysia 36% work in factories) How does this compare with the Australia? Australia is less 21% - so e.g. in Malaysia 36% are employed in factories compared with 21% in HICs

9. A point to be aware of-
These pie charts can show one of 2 variables – the previous page look at the employment structure, i.e. the number of people employed, but equally they could be about the % of GDP per sector – and this shows slightly different patterns but which when taken together explain a lot!
Look at the pairs on the next slide and see what it tell you!
WARNING make sure you know exactly what a pie chart about employment is showing you

10. Employment structure – people working
GDP – money made
Employment structure – people working
Ethiopia – more people working than money made – so lots of cheap labour – not very high productivity
Industry has fewer people working but makes double the money ( x2)
The tertiary industry makes lots of money with fewer people. (x 4)
South Korea:= and UK
Again agriculture is unproductive
Industry x 2
Tertiary also unproductive
What do you notice? What does it tell you?

11. Why are so many people employed in primary industries in LICs?
LICs have a low income per person. This is mainly to do with the things that they sell have low value.
These are mostly primary products – raw materials – which have not been processed.
The richer countries and the traders have always paid as little as they can for raw materials.
This means that these countries cannot afford the machines to do the work but depend on poorly paid labour to do most of it instead.
This also explains why such a large % of the population is involved in growing/collecting and harvesting these raw materials.

12. Why do MICs have fewer people working in primary industries?
However, once a country begins to develop, it will not sell raw materials for low values, but will begin to process them themselves and so become richer.
As they become more industrialised, they will have more money to invest in machinery, which means that few people are involved in the production of raw materials.
It becomes increasingly pressing that more people are released from primary production as more and more people are needed in the secondary manufacturing industries.
So as industrialisation increases, then the number of people employed in primary production decreases. This does not mean that the amount of primary production decreases, just the number people needed to carry it out.

13. Why does the number of people in tertiary industry increase with development?
As a country becomes richer, an educated work force becomes more important, so there is more invested in education (tertiary).
As fewer people are producing their own food, then services to provide food to the industrial workers also increases (secondary – food processing and tertiary – distribution network shops and transport).
Industries are most economical in urban areas so you need roads, water, police (all tertiary). So the general trend is that as a country becomes more industrialised, the greater the tertiary activity is.
When a country becomes richer still, then services likes banks, insurance, widespread healthcare and many others employ more and more people.

14. Do you know what informal employment is, where it occurs and why?
When we look at the pie charts, this records what the government of that country knows about the work people are doing – the formal economy
But in every country there are people working that the government does nothing about – informal employment. They pay no tax and have no contract of employment and no-one is there to protect their safety. Any rules about hours of work and minimum pay are disregarded.
It used to be rife in the UK and parts of Europe and was known as the ‘black economy’ – in particular it involved the building trade.
More recently immigrants (in particular illegal ones) are taken on by ‘gangers’ who sell their labour to fruit and veg farmers. The farmers then pay the ganger who pays the team workers not very much. Usually the ganger gets the gang poor overcrowded lodging which he charges them for – so they end up with very little money.

15. Do you know what informal employment is, where it occurs and why?
Does anyone remember the Morecombe Bay tragedy, when 23 Chinese drowned while picking cockles up off a dangerous sand bank?
All such activity is now illegal and the gangers must register and provide basic pay and make sure that health safety is adhered to.
However in LICs/MICs there are many thousands who make up the informal economy. Street hawkers of snacks or simple services, such as shoe cleaning, pickers on rubbish tips who collect and sell recyclables are examples of the type of thing they do.
What are the problems? There is no unemployment pay or medical insurance. There are no health and safety rules to protect from injury. The hours are long and the pay is low.
Often children are employed below the legal age for work – where it is often said they are apprentices and so receive no pay beyond board and food – their parents may have received pay when they left home in the villages – so to all intents and purposes they are slaves.

16. Why do they do it?
Rural to urban migration is a major cause. Many leave the villages to earn what they have heard are much better wages and conditions. There ARE more jobs but there are also more working age people than jobs. This leads to underemployment and unemployment – this puts employers in a position to set the wages very low – not enough to survive on. So workers need to find a way to make up the difference by informal employment.
Why do they do it? Because there are no regular jobs.
It is often dangerous usually underpaid but if that is the only choice you have, you take it.

17. Factors affecting the growth of tertiary and quaternary activities
The 2 of them provide a large range of services
Quaternary services include providing expertise to others – research, design, IT systems, financial advice
Both sectors grow with economic development (see over) – which in turn generate jobs and money
With development, more social services are expected, e.g. schools hospital etc.
Quaternary activities require high level of skills and technology – both of which become available with development.

18. Cycle of growth of tertiary and quaternary industry
More and better jobs
Greater demand for goods and services
Tertiary sector grows
More personal income
More personal spending
More D&T - quaternary
New inventions give more choice
People want the new hi-tech goods
Greater disposable income

19. Finally..
In HICs, while the demand for services increase, as we have seen, increases the relative importance of tertiary and quaternary industry, as secondary industry moves to MICs where the costs of running a business are much lower – see more later.

20. Factors affecting the location of tertiary and quaternary activities
Nearly every new enterprise is found in a particular place for good reasons.
It is just as true that there are distinct location factors for tertiary and quaternary industry.
Originally, most service industries were found where they could be reached by the customers – they were accessible – and that was in big centres of population right at the centre – in the CBD. It is still true that many services are still in the CBD of towns and cities, both in HICs and LICs, fir this very reason.
Recall though, the customers were not just town dwellers, people came from outside too. So this enlarged the sphere of influence -the area from which the service drew its customers – so good transport links were an important issue.
What is CBD?

21. But a lot of service industries and quaternary industry has moved to the rural urban fringe in recent years in HICs
Why might industry move there?
What is the rural urban fringe

22. Factors affecting the location of tertiary and quaternary activities
Much more commercial development has taken place on the rural urban fringe where:
The land is cheaper
It does not have to be cleared before building can take place
There are usually good transport links – ring roads – both for the workers and customers
There is plenty of space for car parks
The environment is cleaner and more pleasant

23. What are the out-of-town locations of tertiary and quaternary industry called?
Superstores and retail parks – large areas with one or more big stores and ample car-parking – often has a sphere of influence larger than the adjacent town
Industrial estates – areas of light industry and services laid out with its own road network
Business parks – combined retail, offices and leisure activities
Science parks – well laid out areas for high tech industry, usually close to a university or research establishment, that provides the ideas.

24. What do high tech industries need?
High-tech needs a highly trained workforce, up to degree level and beyond in many cases.
They need access to research establishments very often – this is where the new ideas are developed.
They like to hang together in groups – other firms may become suppliers, customers or collaborators.
They need good transport – road, rail & air
To attract the high-class workers, they are often sited in clean, healthy and pleasant environments – lets look at the M4 corridor
Also governments can help by giving incentives for firms to set up in one country/part of a country than another, where they was increased economic activity.

25. Which of the criteria just mentioned does the M4 corridor fulfil?
So the M4 corridor
Near the M4 and on a fast rail link to London with Eurostar links to the continent and with easy access to Heathrow
A large highly trained labour force – those who trained/worked in London will be happy to move out to a much pleasanter environment
Lots of high-tech industry sited in science parks that are close to the motorways on land that is cheaper than in city centres
Near to Bristol, Reading and Oxford universities
Attractive environment – Cotswolds, Mendips and Chilterns
Rich market concentrated around London and the South East.
There is also EU and local grants given as an incentive to encourage some of early start-ups.
* Notes below the slide

26. Case study of recent employment changes within an area of a HIC
This is what it used to be like:
Coalfields (primary)
One of the largest iron and steel works in the UK
Shipbuilding
What factors made this an attractive area for the 2 main secondary industries?

27. The UK coal mines were shut in the 1970s
Most were nearly worked out
Some were too expensive to mine – there was cheaper coal to bought in Eastern Europe.
Shipping was no longer important – there had been booms during both world wars, but shipbuilding in Korea and Japan was much more up-to-date and cheaper. The last ships were built in the 1980s.
The Jarrow marchers came from a shipyeard community that had 76% unemployment in the depression of the 1930s.
Being one of the poorest areas in the UK ….
…..the EU, the government and the local authorities did their best to bring employment.
They used many of the methods to entice investors:
The financial assistance is in the form of:
job creation grants
rates or rent free periods
assistance with preparation of the site

28. In addition …
These industries are attracted by the availability of a large, skilled labour force.
The attractions of the infrastructure include:
two international airports
six major ports with a full range of facilities
improved road and rail links to London and Europe
reservoirs in the Pennines providing constant water supply
available industrial sites, both brown and greenfield

29. Why is Nissan sited in NE England?
Recently new employment has been provided by overseas companies, as shown on the map below.
New employment in North East England
These developments have further diversified the types of manufacturing industry (motor, electronics, off-shore supplies), and have provided more opportunity for office and retail work. The region has been particularly successful in attracting call centres, which employ more than 30,000 people.

30. Reasons for Growth: (Physical and Human)
Availability of Greenfield sites
Availability of Brownfield sites (previously used industrial area)
These sites provide room for expansion.
Deepwater Ports are available for the IMPORT of raw materials and for the EXPORT of finished products- in particular to EU countries.
Good road infrastructure A1 (motorway) access from North/South UK
Airports for both business travel and movement of products - close proximity to Newcastle and Stockton on Tees Airports
Large supply of skilled labour available from Newcastle, Stockton on Tees and Middlesborough after the decline of traditional engineering industries.
Training opportunities available - local colleges and universities
Relatively low wages in comparison to other European developed nations
Few working constrictions in UK.
Being an assisted government area, local and national incentives and grants were available.
English language a benefit in EU/world market place
Multiplier effect for new supplier/component companies

31. Identifying Industrial Site and Location Factors from a map
The A 19 offers a major north-south transport route for the shipping in of components needed to build the cars and the export of the finished product to a European market.
This is the Nissan plant, attracted to the NE by government grants and a strong tradition of engineering in the region.
Additional land is available for expansion.
The site is close to the major cities of Newcastle and Sunderland, a handy and skilled workforce.

32. Identifying Industrial Location and Site Factors from aerial photos
The Nissan site was built on a brownfield, close to farming areas
The Nissan plant occupies a site of over 2miles2
The river Wear offers another transport option
This major transport axis is good for workers and the movement of finished products and components.
The room for expansion is clear here
A test track – fancy a drive?

33. How the government assisted..
In February 1984, Nissan and the British Government signed an agreement to build a car plant in the UK.
As an incentive, the land was offered to Nissan at agricultural prices; around £1,800 per acre.
The high unemployment caused by closures of mines, steelworks and shipp building, meant Nissan had a large, eager, manufacturing-skilled workforce to drawn upon.
NISSAN – A Japanese TNC Wanted a foothold in Europe (access to European market without paying import taxes).
Located in Washington (Sunderland) because:-
Large site for building (an old airfield) that was flat and had room for expansion.
The NE of England has a history of engineering skills from ship building that could easily be modified and staff trained to build cars the Nissan way.
Nearness of port (Tees) for import and export.
Globalisation helps companies avoid trade restrictions. eg Nissan gained access to the EU market by locating in Sunderland.

34. Energy is… One of the most important resources we have. We need it to:
Keep warm
Cook with
Light our homes
Run our factories
Provide us with transport
Fortunately, we do have a variety of sources

35. Dividing energy up It can be sorted into primary and secondary energy.
Primary energy sources provide energy without undergoing any changes – coal is one – can you think of any others?
But to get the energy from secondary sources, they need to be processes – petrol is refined from oil for example. Any others?
Which is electricity?
gas, fuelwood, water
Electricity, coke, charcoal

36. Another even more familiar way to divide energy up
Energy sources can be renewable or non-renewable
Non-renewable ones like coal and ..? As once they are used up, there will be no more
Renewable ones can one that can be used again and again. For this reason their use is sustainable.
And they will become increasingly important – what are they?
But there are 2 that are controversial …..
Controversy over nuclear power as a renewable energy source
In 1983, physicist Bernard Cohen proposed that uranium is effectively inexhaustible, and could therefore be considered a renewable source of energy. He claimed that uranium extracted from seawater could supply energy at least as long as the sun's expected remaining lifespan of five billion years.
Nuclear energy has also been referred to as "renewable" by the politicians George W. Bush and David Sainsbury.
But inclusion under the "renewable energy" classification could mean that nuclear power projects eligible for development aid. But nowhere has this happened.
Controversy over nuclear power as a non- or renewable energy source
In addition, it has not been established that nuclear energy is inexhaustible, and issues such as peak uranium and uranium depletion are ongoing debates.
There are also environmental concerns over nuclear power, including the dangerous environmental hazards of nuclear waste.
Some say that development of new plants cannot happen quickly enough to reduce CO2 emissions, so that many say that nuclear energy is neither an efficient nor an effective way of cutting CO2 emissions.
So where does this put nuclear power? Not sure that anyone has decided!
Controversy fuelwood as a non- or renewable energy source
If the trees are planted for using as fuelwood, then clearly it is renewable.
But much of the fuelwood used in LICs is from natural forests and is not replaced, then it is non-renewable.
However, in areas such as the Sahel, tree planting and maintenance is seen as a major way to counteract soil erosion and the provision of fuel wood that does not involve going ever greater distances is increasingly seen as a ‘good thing’, so more and more fuelwood is becoming a renewable resource.

37. This shows the production by area per capita in barrels of oil – the book does it in kg of coal equivalent
What the 3 main world producers of energy?

38. This shows the production in % by type
What is the group name given to these 3 due to their origins?
What are the 3 largest sources of energy?
Are these renewable or non-renewable?

39. This shows the consumption by area per capita in barrels of oil
While North America and Europe use 70% of the energy produced, only 20% of the population live there

40. Energy demand The need for energy is constantly rising.
This causes, in part at least, by the rising population.
But as important, is the rising expectations of people in LICs, for electricity in the home, for cleaner cooking mechanisms, for transport etc.
The amount of energy used in a country is increasing used as an indicator of development.
The amount it uses is its energy consumption

41. I hope you noticed that ..
The major consumers are also among the major producers
The amount of energy a country uses has always been an indicator of the level of development – the more they use, the more industry they have and better the standard of living of the population.
As these countries have also produced a lot in the past, the availability of energy was one of the main factors that kick started their development in the first place.
However, many of their reserves are beginning to be exhausted and so they are looking to other parts of the world to import from.
In addition, environmental problems are leading many to look for alternatives and also to reduce their overall need for energy in an attempt to make better use of what they have

42. The energy gap
But an increasing number of countries are facing an ‘energy gap’ – what might that be?
An example is the UK – in the 1980s, the UK had more gas and oil coming out of the North Sea than it could use. Now this is fast running out and we are forced to import gas for example from other countries – this makes us vulnerable to political changes ( e.g. as in the old Soviet Union, when they cut their supplies to eastern Europe when they had a disagreement with one of their satellite states) and it also very expensive to ship in gas from further afield.
Yes, we still have coal, but much of it is expensive to mine, and there are increasing worries about the use of coal in power stations, given the pollution they give out, in terms of CO2, N0 etc.
So our sources of fuel to run power stations is changing – see over

43. What do you notice has changed about electricity production in the UK?

44. The energy gap is getting worse …
As we need more energy and are trying avoid the worse polluters ( e.g. coal), the gap between what we can harvest from within our own boundaries and what we need is getting wider.
However there still is plenty of coal, gas and oil (if you think 50 years worth is plenty), but these do cause issue of climate change and of a few holding a lot of power.
But whether we will reach crunch point with energy supplies is hotly debated – many think we will ‘technologize’ ourselves out of it, while there a number of groups – the transition town movement for example, who are quite certain that we will run out of oil and therefore need to be looking now for alternatives, while thinking about producing food and goods locally and not depending on a ready supply of imported goods.

45. But whether we are going run out or not …
.. we do need to make efficient use of what we have. As we could see from previous maps, the people in LICs use very little indeed and if they are to become more developed, they will need more than they currently use.
So we need to use it sparingly and with the utmost efficiency (quote textbook)
Non-renewables must be conserved. Wasteful use cannot continue as it is a precious resource (which means?)
But neither do we want to add to the pollution by burning it.

46. Energy conservation is an issue for everyone
Why are these pictures here?
Any others you can think of?

47. What has happened to consumption in the UK between 1990 and 2008?
The UK as an example of changing energy situation is in the textbook – they say that the overall use for making electricity has increased by 1/3 between 1990 and 2008 – not sure I agree it is quite that much, but ….

48. But why the changes in source materials?
1. For a while we had lots of gas and found this was far less polluting and so have continued to use it.
2. Coal is v. polluting and now our coal mines are getting hard to mine.
3. The Green renewables, while still small, are growing and will grow more.

49. The different types of energy
Use the textbook to look at all of the sources and make notes on the pros and cons of each.