Revision Work for Economic Activity & Energy

Topic:
Key Questions that you need to be able to answer in this topic:
1. How can economic activity be classified?
2. How can economic activity classification be graphically represented?
3. What factors affect the location of industry?
4. How does the type of economic activity vary between places and over time?
(Comparative study between sectoral shifts within one HIC and one LIC)
5. What is informal employment and why does it happen?
6. What affects the location of tertiary and quaternary activities? (Case study of the
development and location of one high tech industry)
7. What affects changes in the location of manufacturing? (case study of recent
employment changes within an area of an HIC)
8. Why is there a demand for more energy and why is there an energy gap?
9. What is the concept of precious energy and how does this help us think about
energy efficiency?
10. What are the relative merits of renewable wind, solar and nuclear) v nonrenewable fossil fuels?
11. What are the sources of energy in your country? What do people think about
renewable and non-renewable energy?

For some good revision notes/videos/animations etc go to:

http://ih-igcse-geography.wikispaces.com/

1. How can economic activity be classified?

Info: we basically divide economic activity into 4 sectors, primary secondary, tertiary
and quaternary. However, within this divide there are subsections and cross over as
many businesses around the world work in multiple sectors.
Task: match the heads with the tails for the definitions of the 4 sectors of economic
activity:
Sector
Definition
Examples
Primary
This is concerned with research and
Car steel, chemical, food
development along with technological
production. Anything that
improvement and scientific research
includes manufacturing
industries.
Secondary
This is concerned with the extraction of
Teaching, Finance, Doctors,
minerals and the growth of products in their
Nurses, Lawyers.
raw state
Tertiary
This is concerned with the production of goods
Medical and technological
for sale from raw materials. Value is added to
research, new technologies
raw materials here.
etc
Quatrterna
This is concerned with the service sector and
Farming, Fishing, Mining,
ry
jobs where people offer their skills and
Quarrying
knowledge to consumers
Secondary Industry:
This can be split into two sectors, heavy and light, these are:
Heavy: older more traditional industries that produce large goods out of heavy and
bulky raw material, good examples are car, steel, petrochemicals, ships. Location of

these industries often linked to raw materials, e.g. old steel industry located near iron
ore, coal and limestone deposits, more modern steel plants locate near coast to have
these delivered.
Light: newer more modern goods, often hi-tech, that are made using small raw
materials and are a smaller and more easily transportable. Examples are mobile
phones, white goods (washing machine, fridge etc), TVs etc. they do no rely so
heavily on being near raw material sources, but transport links are key to them to get
the materials in and finished goods out. Often goods are made in multiple countries
around the world, each country making/adding one section of the machine.
Task: list some example companies that produce in the heavy and light
manufacturing sectors:
Heavy
Company

Light
Products

Company

Products

Companies that cross over the boundaries for the different types of
industry:
Complete the table for the companies below and say how they have different parts of
their company in the 4 industrial sectors.
Company
Nike

BP

Nokia

McDonalds

Primary

Secondary

Tertiary

Quaternary

2. How can economic activity classification be

graphically represented?
Info: there are many ways to show the industrial breakdown of a country or countries.
The easiest three we use are a pie chart, divided bar graph and a triangle graph.
These allow us to show the dominance of each of the sectors and to compare the
breakdown of industry in different countries.
Triangle Graph

Task: Add the following to the triangle graph

Complete the numbers on the axis
Label the axis with Primary, Secondary and Tertiary
Country A: P = 70%, S = 20 % and T = 10%
Country B: P = 10%, S = 60% and T = 30%
Country C: P= 5%, S = 15% and T = 80%
Task: what does the triangle graph tell you about the different countries expected
level of development and wealth?

Pie Chart:

Task: describe the Pie Chart shown above:

Divided Bar Graph:

Task: identify the following and explain your choices:

1. The poorest 3 countries on the graph

2. The countries most likely to be considered NICs (newly industrializing countries)

3. Why is Japan not a full 100%/has a fourth sector?

3. What factors affect the location of industry?

Info: industry chooses its location due to a number of factors; these factors vary in
importance depending on the type of industry and the goods/services it offers. These
factors also change in importance over time and as the methods of producing the
good/service change as well.

Task: Define each factor and give an example of how it has affected the location of
industry (using a specific company example)
Factor

Definition

Example of how has affected the

location of industry

Capital
Government
Raw
Materials
Transport
Energy
Site Needs
Labour
Market
Communicat
ion

Task: for the following businesses pick the 3 most important factors and explain why
they are so important to those businesses:
Coal Mine
Department Store:

3. How does the type of economic activity vary

between places and over time? (Comparative study
between sectoral shifts within one HIC and one LIC)
Info: over time and level of development the makeup of the employment structure
and economic activity changes in a country. Normally as a country develops less
people work in the primary sector of industry, the number of people working in the

secondary sector rises and then falls and the number of people working in the
tertiary sector rises. Often if the country becomes a very high level HIC the
quaternary sector starts to employ people, especially high quality graduates. The
Clark-Fisher models shows what happens to a country as it develops and goes
through these employment changes, although it is not a predictive model as it
charted what happened to the UK pre, during and post the industrial revolution, it can
be used as a good estimate of the changes in the employment structure of an
economy as the country develops.
Clark-Fisher Model

Comparing the UK and China

The number of people working in primary industry in the UK was 1.4% in 2006, it is
unlikely to go any lower. However, in China it is 20% but will continue to fall.
The secondary industry peaked in the UK
in 1900s before falling. In China,
secondary production is increasing at a much faster rate than it did in the UK.
In China secondary industry is still increasing and already higher than the UK.
In UK
most people work in services (Tertiary) In China the tertiary sector is
increasing
Both China and UK have increasing numbers involved in tertiary and quaternary
production

4. What is informal employment and why does it

happen?

Info: employment is split into two sectors the informal and formal sectors, each has
its place in the working environment and have many similarities. However there are
major differences between the two sectors, this links in with urban environments in
LICs (esp. Shanty Towns).
Task: Define and give examples of the informal and formal sectors:
Formal:

Informal:

Task: complete the Venn diagram to look at the differences and similarities of the two
sectors:
Formal

Both

Informal

Task: list the reasons why the formal sector occurs and put the factors in order of
importance

Task: explain your choice of order

5. What affects the location of tertiary and quaternary

activities? (Case study of the development and
location of one high tech industry)
Info: the location of tertiary and quaternary industries varies very heavily from
secondary and primary. They are what we term footloose which means that locate in
areas with goods transport links and access to skilled employees (esp. for
Quaternary). However if transport links are good people can travel to these business
from large distances, meaning that on the whole transport becomes the most
important factor that they look for.
Case Study: Hi-tech industry: The M4 Corridor

New industrial regions in Britain have tended to grow up along main communication
routes. The best example of this is the "Sunrise Strip", which takes in the area
around motorways such as the M11, M23, M3 and, most importantly, the M4.

These industries are described as being footloose. They have generally grown up
over the last 25 years in "growth areas", along communications routes. Although they
do bring prosperity to regions, the new industries actually employ few people in
comparison to the older, declining, heavy industries. Traditional location factors have
been super-seeded by newer ones.
As access to raw materials is relatively unimportant nowadays, location, although
dominated by communications considerations, also can increasingly take into
account the social needs of its employees. Thus climatic, scenic, health and
entertainment factors have to be included. In turn the industries try to locate near to

places where a skilled workforce could be employed, such as around the university
towns of Oxford or Cambridge.
The Sunrise Strip has many locational advantages:
1. The motorway system, which allows easy access to all parts of the United
Kingdom.
2. Easy access, via the roads, to the Channel Tunnel and ports to allow export
abroad.
3. The close proximity of Heathrow, Bristol, Cardiff, Gatwick, Stanstead and
Luton airports, all of which could be used to export products.
4. The skilled workforce found in university towns of Oxford, Cambridge,
Reading, Cardiff and Bristol.
5. Close proximity and good access to London, where the major government
functions and financial trading occurs.
6. The concentration of other industries means that ideas and knowledge could
be shared, there will be a concentration of suitable skilled labour and
transport costs may be reduced between agglomerated industries (economies
of scale).
7. A very attractive natural environment, which would provide a very pleasant
place to live for the workers. Areas such as the Cotswolds and the Mendip Hills
are in easy reach of the Sunrise Strip.
Two other good examples of similar new industrial areas are:
1. Silicon Glen in Central Scotland.
2. Silicon Valley in California, USA.
Specific Case Study of Company in M4 Corridor: LG (Lucky Goldstar):
Newport, South Wales
Background
LG is a South Korean multinational (MNC), or transnational corporation
(TNC). Transnational corporations are companies that have operations in several
countries and they dominate the hi-tech industry.
Why did LG choose this particular location?
In a highly competitive global economy transnational corporations are looking for
new locations for their assembly factories that are near to their markets, where they
can sell their goods easily. They are also attracted to places where wage costs are
lower and motorways are close by. Newport is located on the M4, plus it has rail links
and is close to a busy port making it easy to transport goods. Available labour force
after the unemployment brought about by the closure of many traditional industries
in the area.
How did the area attract LG?
Keen to win the business, the government offers financial incentives to attract foreign
companies to Britain. The Welsh Development Agency (WDA) has an important role to
play in attracting new investment to areas in South Wales were traditional
industries have declined. LG has been given 180 million in subsidies from the
government which is the equivalent to 30 000 per job created. Plus it has ended up
with a factory inside the EU safe from tariff barriers and close to its European
customers. They are able to pay workers in Wales less than workers in Korea; the low
costs allow high productivity for LG.
In its 20-year history, the Welsh Development Agency has helped more than 1,000
companies establish operations in Wales -- more than 150 of them from North
America. The Agency is credited with making Wales one of the most attractive
regions in the UK to international businesses. Though Wales, about the size of New

Hampshire, is home to just 5 percent of the UK population, it has attracted about 12

percent of the nation's international investment.
How do these changes impact on people & the environment?
Impact on people:
6100 jobs created for local people directly in the new LG plants
Indirect employment created through links with the LG plants, in associated
industries which supply goods and services to the company
Area became a more attractive place for people to live. Disposable income for
many people increased. As a result, local shops and services benefited from
people spending more money
Increase in traffic on feeder roads, which affected the quality of life of local
residents as deliveries occurred 24 hours a day
Impact on the environment
Greenfield site chosen for location of new factory. As a result, habitats
destroyed along with an increase in impermeable surfaces which could
increase the flood risk to surrounding area
Increase in noise pollution due to cars and delivery lorries entering the site all
day and night.
Task: Answer the following 9 mark question:
Using an example of an area you have studied explain the reasons for the location of
tertiary or quaternary industries in a HIC (9)

6. What affects changes in the location of

manufacturing? (Case study of recent employment
changes within an area of an HIC)
Info: in HICs over the last 70 years the location of manufacturing has changed, this
has been due to a number of factors both in the HIC and in LICs and MICs. There have
been a number of factors that have linked to the change, but all of these are part of
the 9 factors that affect the location of industry (see earlier work).

Primary and Secondary industry (Coal and Steel): South Wales

South Wales has experienced both growth and decline as an industrial area. During
the 19th Century Southern Wales became a vitally important industrial area, for both

iron and steel production. The steep valleys, with their fast flowing rivers, provided
power and transport. The hills were rich with raw materials, such as coal, iron ore and
limestone, and the area was close to the ports of Cardiff and Swansea.
In 1860 there were over 30 iron works in the valleys of South Wales. They provided
vital employment for the local villages, which became almost solely dependent on
the new industries. During the next 40 years improvements in the smelting process,
meant that the production of iron was replaced by steel manufacture, which was
more profitable. The natural resources needed were the same.
By the 1990's only two steelworks were left in South Wales, and both of them were on
the coast. The resources had run out, only one coal-mine remained working and the
many small works in the valleys had closed down, causing huge social problems.
The new works were integrated steel works, which imported their raw materials from
abroad. These aimed to make the industry more efficient and competitive in a
growing world market. Not only is there competition from other countries but also
from other materials that are increasingly being used instead of steel. Materials, such
as aluminium and plastics.
An example of one is the integrated steel works at Port Talbot. Opened in 1954, it is
an integrated steelworks, which is one in which all processes of the steel making
industry occur under one roof.
The coal and iron ore deposits of South Wales have long since run out or become too
costly to get at, so both of these raw materials are imported from places such as
Africa and South America.
Port Talbot has many locational advantages. There is a large area of flat land, near
to the sea for importing and exporting purposes. Nearby is a large workforce and
access to the entire British market through the excellent motorway links. It has
created employment opportunities in the area, and has encouraged further
investment and growth.
South Wales is experiencing something of a recovery again, thanks to being at one
end of the M4 Corridor. Industrial Parks have been established outside of the main
cities, to benefit from the large workforce, good transport links and available land.
There have also been government grants and loans made available to encourage
industrial location in the area. Companies such as Sony, Bosch and Toyota have all relocated to South Wales.
The bullet points below show the main points needed to answer a question similar to
that shown. The example of the South Wales Iron and Steel Industry has been used.
Task: Answer the following 9 mark question
"Industries locate for many different reasons. Choose a secondary manufacturing
industry that you have studied. Explain how different factors have affected their
choice as to where to locate the industry and how these factors have changed over
time."
Notes:
Factors affecting choice:
Need to be near resources - coal / iron ore / limestone (these were found in
the large valleys of South Wales)
The factories need open flat land
Local water sources for cooling / powering machinery.
Flat land also needed for transportation by rail

Factories were often built near large populations, or large populations

clustered around the factories due to the large workforce needed and lack of
good transport
How these factors have changed:
Over time raw materials ran out and factories began locating near the coast raw materials were imported
Large ports grew up at points of the coast where there is deep water directly
offshore (e.g. Port Talbot)
Even more flat land is now needed for some large "integrated steelworks"
Factories have moved away from built up areas because people can commute
more easily
Answer:

Influence of the NICs

Info: over the last 50 years many poor countries have tried to develop by attracting
TNC companies (transnational companies/multinational companies) to manufacture
their goods in the poor country in order to try to increase the wages, employment
and size of the economy there. These countries have come to be known as NICs
(Newly industrialized countries), some are even known as RICs (rapidly industrializing
countries). They have all used a policy of rapid industrialization through export
orientated industrialization (EOI), which means that most of the goods they produce
are destined for foreign markets.
There are 3 basic waves of NICs:

Wave 1: Pre 1990

Wave 2: 1990s

Wave 3: 2000 onwards

Taiwan, Singapore, South

Korea

Malaysia, Philippines,
Thailand, Indonesia

China and India (RICs)

(There are others that industrialized at the same time but these ones are some of the
more well known ones)
Why do TNCs want to locate in NICs?
To a TNC and to any business the idea is to sell as many goods as possible, make as
much profit as possible and please as many shareholders as possible (possible crush
as many competitors as possible too!!!!!). To do this there are many different ways,
e.g.
Lower production costs (sell good at same price = increase profit)
Lower production costs (sell good at lower price = kill off competition)
Increase world market share (sell to more countries = make more money)
And so on .

Therefore by locating in NICs they can gain the following benefits:

Benefit
Wages are very low in NICs
All countries in NICs have
access to world shipping lanes
Due to low production costs,
goods are very competitive all
over the world
Sea transport can move large
amounts of products lowing
transport costs
Most products are made for
export, but many are now
consumed in local markets
Workers are often very reliable
and work hard for long hours
A growing population means a
large supply of workers
Governments will want to
export goods more goods than
they import

How it helps the TNC

Benefit
In order to attract companies,
incentives are offered to the
companies
NICs are often close to many
rich
countries
who
need
products to buy and sell
Governments in NICs have
improved road networks and
other transport networks
Low laws mean worker safety is
less important than in HICs

How it helps the TNC

Low laws mean that vehicles do

not have to meet the safety
laws of HICs
Governments
will
build
factories and offer cheap rents
to attract industry
Many major NIC cities are on
the
coast
=
good
for
exports/imports
As people get richer in NIC they
will be able to buy more goods
being produced by the factories

Task: complete the table to show how the factors that cause the TNCs to locate in
the NICs helps the TNC
Task: Add in what factor of production they are.
Task: what are the 2 most important factors that cause TNCs to locate in NICs?
Explain why
NIC Case Study: South Korea
South Korea lacks natural resources, however it has a plentiful, cheap and flexible
workforce, and this has led to it becoming an NIC (Newly Industrialized Country), with
rapid industrialization occurring over the last 50 years. You need to know what the
CAUSES and CONSEQUENCES of this rapid industrial growth have been.
What were the CAUSES of South Korea's rapid economic growth?
- the government realized that agricultural production was not the route to economic
growth and as a result encouraged foreign investment e.g. from the USA and
themselves invested in large companies such as the state-owned Steel Works
(Pohang Iron and Steel corporation)
- South Korean firms (such as Hyundai, Samsung and Daewoo) were also protected by
high import taxes - this ensured that there was a sufficient market for goods, further
stimulating production.
- the government also developed its own research and development of hi-tech goods
- large TNCs (e.g. Sony from Japan) were attracted by low wages, low taxes and they
also bought know-how to South Korea
- a dedicated and substantial workforce was available, willing to work long hours
- firms were also attracted by a large consumer market of SE Asia (e.g. China)

What have the CONSEQUENCES of South Korea's rapid economic growth

been?
ADVANTAGES OF RAPID INDUSTRIAL GROWTH:
(i) South Korea became very successful competing with MEDCs such as the UK
(ii) More jobs were available, helping to reduce unemployment and with the rise in
income, there was more money available in the country for buying consumer goods
and helping to increase standards of living
(iii) The increase in purchase of consumer goods (e.g. cars / electrical goods), created
more demand for the goods and therefore led to a further increase in the market
(iv) More money was also available for leisure time (greater disposable income),
resulting in a growth in the countries service sector
(v) More money was invested in the infrastructure, improving road networks and
airports
(vi) The success of industrialization and the development of South Korea's industries,
led to South Korean TNCs (e.g. Samsung) investing in places such as the USA
(vii) South Korea became the leading producer of shipbuilding (due to low labour
costs / modern ship building yards)
(viii) The South Korean car industry flourished, with companies such as Hyundai and
Kia linking with industries in the USA / Japan and the companies have also invested in
LEDC countries.
DISADVANTAGES OF RAPID INDUSTRIAL GROWTH:

SOCIAL PROBLEMS
- unequal pay (women and immigrants paid only 50-75% the wages paid to men),
sweat shop working conditions for some and an increase in child labour
- working very long hours (an average of 52 hours a week)
- increased rural-urban migration (the most innovative began moving away from the
countryside into the nearby cities for work)
ENVIRONMENTAL PROBLEMS
- noise, air and water pollution increased due to the rapid industrialization
- the increase in factories led to smog over cities
- increased traffic volumes led to taxes on road use in the capital, Seoul
- in some areas which experienced an increase in population, services such as
sewage treatment were not able to cope
- rapid growth resulted in some instances in poor workmanship and there were
instances of deaths from collapsing buildings (e.g. the Sampoong Department Store
in 1995 (507 deaths))

Task: List the reasons for the changes in location of manufacturing in HICs
HIC factors
Influence of NICs

Task: which of the sections do you think is more important to the decline of
manufacturing in HICs? Give reasons for your answer

7. Why is there a demand more energy and why is

there an energy gap?
Info: as the world gets wealthier and grows in population we demand and use more
energy. As we get wealthier we use more energy hungry goods, we are able to afford
more, and to consume more energy. This means that the levels of energy demand in
a country grow and the issue of supplying it gets more difficult. With this in mind it is
becomes more of a problem as we look at the stocks/supplies of the energy we use
mostly for electricity generation, namely Coal/Oil and Gas.
Statistics for increased energy usage across the world:

Task: Describe the trends in the graph

Task: what are the positives and negatives of what the graph shows:

Reserves of Non-renewable energy sources:

Oil: According to British Petroleum, total identified or proven world oil reserves are
about 1200 billion barrels. Considering the present production rate of over 80 million
barrels per day, these reserves will last for about 41 years if there is no increase in
production.
Natural Gas: According to BP the total proven world natural gas reserves at the end
of 2004 were 179.5 trillion m3 (cubic metres). Considering the production rate of gas
in 2004, with no increase in production thereafter, these reserves would last 67
years.

Coal: According to BP, the proven recoverable world coal resources were estimated
to be 909 billion tons at the end of 2004 with a reserve to production ratio of 164
years.

8. What is the concept of precious energy and how

does this help us think about energy efficiency?
Info: energy is precious to us because of our lifestyles and the way we produce it. If
we continue to use fossil fuels to generate our energy we will soon run out of
electricity and the products that we need that require electricity to work will cease to
be of any use to us. However we do have a choice, we can use renewable energy to
produce electricity, use our fossil fuels more efficiently, or find alternatives to the
energy hungry lifestyles that as a world we have.
Way to
make
energy last
longer

How this can be achieved

Negative impacts of this

type of policy

Positive impacts of this

type of policy

Consumer
Less/Limit
Supply
Increase
Efficiency
(Domestic
and
industrial)
Increase
the levels
of supply
(find more)

9. What are the relative merits of renewable fuels v

non-renewable fossil fuels?
Info: the method of energy production is one of the most important issues facing the
world today, worth the potential of non-renewable running out and renewable not
being advanced enough to cope the world may face an energy crisis within the next
50 years.
Task: Define the two types of energy: Non-renewable and renewable:

Task: list the different types of energy:

Renewable

Both

Non-renewable

Task: why are there issues with wood and nuclear?

Task: complete the tables to show the arguments for and against the different types
of energy
Non-Renewable:
Argument For this type of
Example of specific type and how this works
energy

Argument against this type

of energy

Example of specific type and how this works

Argument For this type of

energy

Argument against this type

of energy

Renewable:
Example of specific type and how this works

Example of specific type and how this works

10. What are the sources of energy in your country?

The Bahamas depends on imported energy supplies for 99% of its consumer
demand
Demand for electricity is increasing due to tourism and industry growth
Heavy fuel oil generates 40% of our power a very dirty fuel in its release of
Sulpher and carbon dioxide, also inefficient
Very high fuel bills due to inefficiency of power generation and costs of
importing oil
Beginning to see a move towards renewable energy
Exuma - $6 million investment in Renewable Energy at two-square mile
island, north of Staniel Cay
One of the things we did was lower the duty rates on renewable energy and
equipment, so that was an investment there and encouraged the project from a
financial standpoint,
We looked at the cost of production in regards to the transfer of the equipment, the
cost to continuously supply diesel, and in fact when it was looked at in regards to the
project as a whole, the cost of renewable energy would have paid for itself in five to
six years, so this was a more feasible project. It is now coming to completion.

There are three permanent magnet wind turbines, producing sufficient electricity to
take care of all of the islands power needs.

Also a field of solar photovoltaic panels that is connected to a 540-battery backup

system. In addition there are standby diesel generators, securing an already
adequate electrical supply, in the absence of sufficient wind and sun. 160 workers
are employed by this project.

What do people think about renewable and nonrenewable energy?

Can you think of reasons for and against this type of energy generation in
the Bahamas:
People in Favour:
Why:

People against:

Why:

Glossary:
Accessibility The ease with which people can get to a particular place.
Economic sector A major division of an economy. Most commonly four sectors are recognized: primary
(agriculture, fishing, mining), secondary (manufacturing), tertiary (services) and quaternary (R&D,
information processing).
Energy (resources): the means of providing motive force, heat or light. They include electricity, gas,
steam and nuclear power, together with fuels such as coal, oil and wood.
Fossil fuel Combustible materials made from the fossilized remains of plants and animals, for example
peat, coal, oil and natural gas.
High-tech industry Manufacturing involving advanced technology, such as making or using microchips
and computers. It also includes genetic engineering, communications and information technology.
Informal sector This is largely made up of jobs over which there is little or no official control. It includes

jobs such as child minding, domestic cleaning and bar tending.

Non-renewable resource: A material that cannot be restored after use. Examples include fossil fuels
and minerals.
Raw material anything that occurs in a natural state and that is useful to people.
R&D: Research is the design of new components or improvement of old ones, while development is the
way the new ideas are tested out and applied to the product range.
Renewable resource A resource which is not diminished when it is used; it recurs and cannot be
exhausted (for example wind and tidal energy).
Transnational company (TNC): A huge enterprise which operates on a global scale and is involved in a
wide variety of businesses.
Transport Moving people and commodities from one location to another.