UK Economy and the Wider World (Edexcel GCSE Geography: B (1GB0))

• Over the last 50 years, the UK's population has grown by nearly 20% (10 million people)
• Growth is due to 2 processes:
  • Natural increase: where births are exceeding deaths
  • Net migration: where in-migration exceeds out-migration
• Migration can be split into 2 types:
  • Internal or national migration
  • International or external migration

What is migration?

• Migration is the movement of people across an official boundary, either internationally or nationally, with the intention of creating a permanent place of residence
• The UN defines the term 'permanent' as a change of residence for more than 1 year

Impact of national migration on the UK

• Migration has shaped the UK and has impacted economically, culturally, politically and environmentally 
• The UK's economic development was the largest impact on the population density
• Prior to the 18th century the majority of UK residents lived in rural areas, relying on agriculture as their main form of employment
• During the 19th century the industrial revolution saw a rapid rise in the number of people concentrated in cities as they migrated from the rural regions seeking employment in the better paying secondary sector 
• Now in the UKs post-industrial phase, the population is spread around the cities, with urban sprawl a common feature 
• This internal migration has led to the population density of the modern UK, where the majority of people live in urban areas

Impacts of international migration on the UK

• The UK has always experienced waves of migrants
  • During the 1850s Irish famine
  • 1950s from West Indies, seeking employment
  • From eastern Europe after EU enlargement and removal of barriers
  • Refugees from Syria and Ukraine etc.

Out of the 59.6 million usual residents in England and Wales in 2021, 49.6 million (83.2%) were born in the UK and 10.0 million (16.8%) were born outside the UK. This means that about one in six people in England and Wales were born outside the UK - ONS 2021 census - International migration, England and Wales - Office for National Statistics (ons.gov.uk)

• India is still the most popular country of origin, with significant migration from Pakistan, Ireland and Poland

Table of the Effects of Migration 

Positive	Negative
Skills gaps are filled	Pressure on services, housing and infrastructure
Culture is enriched	Discrimination and racial tensions (immigrant seen as stealing jobs)
Birth rates are boosted	Overcrowding and congestion
More low-wage workers	Job competition
Support family in country of origin through remittances	Language barriers and cultural assimilation
Government tax revenue increases	Gender imbalance - more men tend to migrate than women
Education opportunities as universities are found in UK cities	Migrants tend to be located together in large city areas
Youthful, single population and vibrant nightlife	Families and retiring couples move out looking for a quieter, safer and less polluted environment

• Not all UK citizens believe that immigration and multiculturalism are good for the UK
• This was one of the main points of the Brexit vote of 2016
• It has created tensions and conflict between communities, along with hate crimes against ethnic minorities

Regional Differences

• Most immigrants settle in urban areas due to job opportunities
• This has contributed to the UK's urbanisation over the last 50 years
• London is the most popular destination for immigrants
• More people left Northern Ireland than in-migrated in 2016
• The UK's south coast is a popular retirement area due to warmer than average UK temperatures

Immigration and age structure

• Most immigrants are young with young families of their own
• This impacts the UK age structure (source: ONS 2022):
• In 2021, 28.8% of live births were to non-UK-born women; a decrease from 29.3% in 2020 
• The total fertility rate (TFR) increased for UK-born women to 1.54 children per woman; the TFR for non-UK-born women remained at 2.03 children per woman
• In 2021, the most common country of birth for non-UK-born fathers was Pakistan; and Romania was the most common country of birth for non-UK-born mothers
• The UK is becoming an ageing population 

The changing age structure of the UK's population, 2005 and 2015

• Monitoring and managing the rate of population change in a country is a key issue for any government
• Migrants bring positive and negative benefits to a country:
  • Positive: boost falling populations and declining economic growth
  • Negative: illegal immigration and fear of migrants taking jobs and housing in the host country
• Many governments try to manage migration in a way to meet its changing demographic and economic needs
• Governments can either encourage or discourage natural growth and immigration depending on circumstances:
  • When economies are struggling, immigration rules become harder
  • An economic upturn will see rules being softened
• Successful management of migration needs to:
  • Maximise the positive benefits of migration to both the host country and country of origin
  • Prevent illegal migration through border controls
  • Promote legal migration channels

UK's management of immigration since 1950

• After the end of the second World War there was a serious shortage of labour to help rebuild the country 
• The UK encouraged immigration from Commonwealth countries especially:
  • British colonies such as the Caribbean, India, Pakistan and Bangladesh
• By 1971 over a million people had migrated from Commonwealth countries
  • The UK implemented controls to reduce the number of future migrant arrivals
• By the 1990s the UK found itself short of labour once again
• The collapse of communism in Eastern Europe led to influx of people looking for work and a decent wage
• When the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia joined the EU in 2004, many made their way to the UK
  
  • The majority of these migrants were young (aged between 18-34 years) and half came from Poland 
  • During the 2009 recession, job opportunities began drying up and many Eastern Europeans returned home
• Free movement within the EU meant that the UK had no control over their borders
• Because of this, many UK nationals began blaming these economic migrants for taking their jobs and abusing the UK's benefits system
• With net immigration running at 300,000 a year, the control of immigration was one of the key issues in the UK's Referendum to leave the EU in 2016
• However, critics ignore the fact that:
  • Migrants contribute to the economy through paid taxes and do the jobs others don't want
  • Many migrants are employed in low-paid, menial jobs such as factories, hotels, farming and care homes
  • Migrants have a strong work ethic which benefits employers, although some employers exploit this
  • Less than 5% of economic migrants receive any form of state benefit
• Currently the UK operates a points-based system
  • People are awarded points depending on their skills, previous income and age
  • This system gives some people visas to allow them entry into the UK for work

• Industrial structure refers to the percentage of employment in the primary, secondary, tertiary and quaternary sectors of the industry within an economy
• An economic activity is the production, purchase or selling of goods and services
• Economic activities can be grouped into four sectors:
  • Primary: Mining, fishing, farming etc.
  • Secondary: Factory workers, clothing, steel production etc.
  • Tertiary: Nurses, lawyers, teachers, shop assistants, chefs
  • Quaternary: Hi-tech scientists, research and development

• The UK’s economy has changed over time and place and the most significant changes came during the industrial revolution between 1750-1900
• The changes can be divided into 3 stages:
  • Pre-industrial stage: Most people worked in the primary sector: Farming or mining
  • Industrial stage: More people moved into the secondary sector of manufacturing
  • Post-industrial stage: Emphasis is on service based tertiary sector and quaternary sectors of research and ICT

Clarke-Fisher-model showing UK economic change over time

• The UK is in the post-industrial stage of the Clark-Fisher model
• It was the first country to experience the Industrial Revolution
• In the 1800s jobs in primary economic activities were rapidly declining reaching 15% in 1900
• In 1900 most people (over 60%) worked in secondary economic activities and tertiary economic activities were also steadily increasing
• By the 1950s tertiary economic activities overtook secondary economic activities as the main employment sector
• In 2021 over 70% of people in the UK are employed in tertiary economic activities
• Some of the reasons for this increase include:
  • The UK has become an important financial and business centre
  • An increasing population needs more services
  • Increasing income leads to more employment in leisure and tourism 
  • Higher education levels mean people are qualified for jobs in finance/legal/medicine
• These changes have both positive and negative impacts

% Employment in Economic Sectors 2020 - UK

Positive Impacts

• Deindustrialisation has led to improvements in the environment and decreased levels of pollution
• UK has developed expertise in secondary and tertiary economic activities which are in demand around the world
• London is the second most important financial centre in the world after New York

Negative Impacts

• Deindustrialisation led to high numbers of job losses particularly in the north of the UK
• Job losses in the secondary industry led to large areas of deprivation especially in inner cities such as Liverpool and Leeds
• Increasing numbers of transnational corporations (TNCs) have moved their factories and offices to emerging and developing countries

• There are 3 main causes of economic change in the UK:
  • De-industrialisation saw the decline in the UKs traditional manufacturing industries and growth in the tertiary and quaternary sectors due to:
    • Global shift of manufacturing to developing countries where labour costs are cheaper, longer working hours and trade unions have no influence
    • Mechanisation reduced production costs and the need for manual labour 
  • Globalisation and increased world trade with cheaper imported goods;  contributing further to a decline in manufacturing
    • Markets have become deregulated and companies have to find ways to make a profit through change and innovation
    • Service sector has grown and wages increased

• • Government policy changes:
    • 1945 -1979 state-run industries were created after WWII to boost the economy, with the government supporting many unprofitable industries
    • 1973 the UK joined the European Union (called the 'common market' at that time)
    • 1979 - 2010 with political change came privatisation and many of the state: run businesses were either sold or closed down and this is when UK jobs first began to go overseas
    • 2010 - 2016 a ‘rebalancing’ of the economy through austerity measures, inward investments and improvements to infrastructure
    • 2016 onwards - Brexit, although it is unknown at present what the full impact of the UK's decision to pull out of the EU will be

• Globalisation is where the world has become more interconnected through the processes of economics, culture, politics, trade and tourism
• Globalisation is nothing new as trade between people, business and countries have always existed
• Whereas trade would have taken weeks, month or even years in the past, modern transport and communications has made trading and interaction almost instantaneous - time-space compression 
• Globalisation has effectively removed the political borders of countries, making them more interdependent on each other, with the more powerful countries and business empires affecting decisions in other parts of the world 

Global investment in the UK

• Globalisation, free trade policies and privatisation have all increased foreign direct investment in the UK
• Foreign direct investment is where individuals or firms (Transnational Corporations - TNCs)  from abroad invest in another country
• Investment can be in people, research or products
• Finance: UK is the world’s leading centre for financial services and accounts for about 10% of the UK’s GDP
• Development of information technology: Over 1.3 million people work in the IT sector and the UK is one of the world’s leading digital economies
• Service industries: The UK services sector has grown rapidly since the 1970s, and contributes over 85% of the UK’s GDP
• Research and development (R&D): This sector employs over 100,000 highly qualified people and contributes over £13bn to the UK economy e.g. British Antarctic Survey: employs over 500 skilled and professional staff from several areas of expertise in Cambridge, Antarctica and the Arctic
• Science parks: Tap into research and employ recent graduates with scientific and technical knowledge. They are usually based on a single site and linked to a university, allowing the use of research facilities. There are over 130 UK science parks that employ over 120,000 people
• Business parks: Areas of land occupied by a cluster of businesses located on the urban fringes where land is cheaper and readily available with less congestion, and businesses can benefit from collaboration e.g. printing companies can provide materials for other businesses in the park

Role of TNCs in the UK Economy

Advantages	Disadvantages
Over £1 trillion has been invested by foreign companies into the UK, generating thousands of new jobs	TNCs can outcompete UK companies due to their massive economies of scale
Foreign companies bring new technology	Overseas economic problems impact UK production with threats of closures and job losses
TNCs invest in infrastructure, eg new roads	TNCs are able to reduce their tax liability on sales in the UK by setting up their HQ in low or zero tax countries