The Changing Economic World - Case Studies

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Economic and Industrial Change in Mexico

History and Landscape

The majority of people in Mexico identify themselves as Mexican, country has been heavily influenced by many different cultures which have been dominant in the country e.g. Spanish, European, American.

Number of indigenous groups (traditional societies which have existed for many centuries often separated from mainstream society). Often have their own language, dress and culture.

75% of Mexicans are Roman Catholic, affects beliefs about use of contraception.

Mexico located primarily 15 and 30 degrees north of equator.

Generally high temperatures.

3 major ecosystems : rainforest, grasslands and deserts.

Change in Employment Structure

Today, 65% of people in Mexico are employed in the tertiary sector.

Large number of people in rural areas still employed in the primary sector, sector continuing to decrease.

Secondary industry contributes to country's GNI.

Increased investment in infrastructure has encouraged tourism and manufacturing.

Industry

Mexico is the 15th largest economy in the world and generates more than $1 trillion per year.

Primary - Mexico produces 2 billion tonnes of limes a year. 25% are exported, generally $327 million.

Secondary - over 1 million Mexicans work in over 3000 maquiladoras (manufacturing plants). The majority of goods produced are sold across the border in the USA.

Tertiary - there are 32 million visitors to Mexico a year.

TNC's in Mexico : LG

North America Free Trade Agreement (NAFTA) was signed in 1994, making factories exempt from tariffs and taxes. Industry has boomed with an 86% increase in employment maquiladoras, which now account for 45% of Mexico's exports.

LG, a South Korean Company, has 3 large maquiladoras in Mexico, close to the border with the USA. The company make $25 billion in sales of TVs to the North American market annually.

Social Issues

More than 50% of maquiladora workers are able to afford their own home.

Workers rights are sometimes breached in order to make profits.

Economic Issues

Maquiladora workers are paid 40% less than factory workers in China.

Mexico has become dependant on TNC taxes, makes TNC's powerful.

Environmental Issues

Water disposal : chemicals buried underground leak into water courses.

Aid to Mexico

Controversial because of their high GDP. Suggested that government should do something for themselves.

Short term emergency aid was sent to Mexico after 1985 earthquake that affected Mexico City.

Long term development aid projects included Casa y Ciudad, an NGO scheme supporting residents build safe homes and learning a trade as a plumber and carpenter. Scheme improves quality of life and economic well-being.

International Monetary Fund (IMF) provided Mexico with debt relief in the 1980s. This multi-lateral aid provided a $4 billion bailout. This bailout was not free, Mexico was forced to remove trade tariffs.

Impacts of Development in Mexico

Improvements in quality of life. 1980 - life expectancy = 67, GNI per Capita = $680, fertility rate = 5. 2015 - life expectancy = 77, GNI per Capita = $9830, fertility rate = 2.5.

Regional inequality leads to rural to urban migration.

Leads to rapid population growth (300,000 per year) in Mexico City, leads to growth of slum settlements.

President Trump is endeavouring to reduce manufacturing in Mexico in order to increase secondary industry in the USA. In 2015 this led to Ford relocating their manufacturing plant away from Mexico.

Economic and Industrial Change in the UK

Industrialisation took place in the UK during the 1800s. Most early manufacturing industries took place in areas with coal fields which provided energy. This was a break of bulk location, reducing transport costs.

De-industrialisation is the decline in secondary (manufacturing) industries, and the subsequent growth in tertiary and quaternary employment.

The UK has experienced de-industrialisation changing into a post-industrial economy ; with more tertiary and quaternary industries. Secondary industries has moved to cheaper countries e.g. China.

Industry in the North East of England was characterised by heavy industry, including coal mines, iron and steel industry and ship building and petrochemicals. As raw materials were used up, and it became cheaper to produce steel and ships abroad, these heavy industries fell into decline.

The ICI plant in Middlesborough closed making 30,000 people reduntant. The Easington colliery closed in 1993 making 1400 people in a town of 5000 unemployed. A lack of transferable skills made it hard for these people to find jobs.

De-industrialisation as many socio-economic impacts.

High unemployment leads to the decline of services in affected areas. Reliance on benefits leads to a decline in housing quality. Life expectancy in de-industrialisation areas is lower than the national average. Average GCSE grades are also lower in these areas.

Modern Industrialisation Developments in the UK

For years UK thrived due to its secondary industries. However it is now a post industrial economy, one where most manufacturing jobs have been replaced by jobs in the service industries. A new sector that is growing rapidly is the quaternary industry. Quaternary jobs are those that involve skilled people who carry out research, provide information and give advice e.g. financial advisers, research scientists.

Cambridge Science Parks

Located to the north-east of Cambridge the site is home to over 1500 IT and bio-technology companies.

Location factors include closeness to a major junction of the A14 which provides rapid access to the M11, and Heathrow and London.

On cheaper land at the edge of the city. Land is flat and there is room for expansion.

Proximity to Cambridge University promotes strong working relationships and access to the best university graduates.

Toyota, Burnaston

1.5 million cars are manufactured in the UK by 7 large TNC.

Toyota are attempting to become more sustainable in a number of ways.

Have installed 17000 solar panels and introduced more efficient practices. Aim to reach zero carbon emissions at the plant by 2050.

They are reducing water use, using rainwater harvesting methods and ensuring that all water used is purified before being returned to the environment.

The North-South Divide

Most areas affected by de-industrialisation are in the north and the west of the UK.

Areas of industrial growth tend to be in the south and the west.

Divide has led to social and economical differences, unemployment in the north east is 5.5% higher than the south east.

Average pay is £4000 higher in the south and life expectancy is 2.5 years longer.

In attempt to reduce the differences between the north and the south, the government has supported a lot of schemes.

HS2 / HS3

High Speed rail links that will run from London to Birmingham, and then on to Manchester and Leeds.

Benefits : reduced travel times to the north will encourage the location of industry in the north. 100,000 jobs will be created.

Problems : the scheme will cost over £50 billion, leading to 600 homes being demolished, 150 nature sites being affected.

Roads

£6 billion will be invested in northern roads to reduce congestion.

Benefit : will encourage industrial location as it will reduce the cost associated with longer transport times.

Problem : should be discouraging road use.

Other UK Transport Improvements

London Gateway

Only 30 miles from Central London. It should handle 3.5 million containers per year.

Benefit : it will reduce the need for over 2000 lorries to collect and deliver from Southampton port.

Heathrow Expansion

Is operating at full capacity with 480,000 flights each year. A third runway, costing £20 billion will allow more flights.

Benefit : encourage more industry to locate in the UK.

Problems : cost, noise pollution and one village demolished.