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Uneven development (Measures (GDP is one of the primary indicators of a…
Uneven development
Measures
GDP is one of the primary indicators of a country's economic performance. It is calculated by either adding up the annual incomes of all working-age citizens or by totalling the value of all final goods and services produced in the country during the year. Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period.
GDP is not a good comparative figure alone- ignores population size and cost of living.
Investopedia
Globally Economic activity has centred around Japan, US and Western Europe who together add up to 11% of the world's land and 50% of its GDP
Recently there has been a shift as Asia has emerged as an economic power- ~12% of global GDP in 1990 compared to ~30% in 2010
Nationally By looking at examples such as China, the UK we can see that economic activity is contained within certain areas in countries. In the UK when looking at a map of GVA per person we can see that with a single exception the highest levels are concentrated in and around London and generally in the south. In China Shanghai has
Distance and Remoteness
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Debates
Death of distance- the cost of travel has been steadily decreasing making it cheaper to go to more remote places however distance still remains a barrier to trade: a 10% increase in ditsance lowers trade by 9% ad shipping prices rose by $400 per 1000km on average
Challenges facing landlocked countries 45 landlocked countries in the world have a lower average GDP compared to non landlocked countries perhaps to worse access to foreign markets. Shipping costs to landlocked countries were 75% more on average.
Implications
Massive increases in world trade: international trade count for larger percentage of economic activity- world export GP is at its highest
Fragmentation of production: process where different stages of production are fragmented and situated in different parts of the world
Industrial Clusters
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Explaining ClustersMarshall: Local External Economies saw three major advantages of clusters:
- Existence of specialised suppliers
- Labour market pooling
- Knowledge spillovers
Examples of LEE include emergence of dedicated infrastructure/reputational effects: having the right address
Schmitz: Collective efficiencyDescribes benefits gained from clustering
- The competitive advantage businesses enjoy from being part of LEEs and joint action e.g. having the right address
Explaining the location of clusters
Arguments explaining clusters imply concentration is self-reinforcing ('spatial concentration itself creates the favourable economic environment that supports further concentration') ---> the precise location of industrial districts can be influenced by historical accident
Persistence of cluster
Forces driving clustering of economic activities are as powerful as ever and one explanation is the continued importance of untraded interdepencies within a cluster
These are particularly important for the transfer of tacit knowledge as opposed to codified knowledge
Path dependence
Small events--->mechanisms of positive feedback or self reinforcement---> BIG consequences
Debates
Geographic unneveness is a basic feature of economic conditions under capitalism. MacKinnon and Cumbers, 2011
Whilst others prosper under capitalism others are less likely to do so. The dynamic process of uneven development unfolds at urban, national and global scales. Coe et al, 2007
There are 3 different explanations:
uneven development is “a temporary condition that will, naturally, be overcome” example can be seen in how space is shrinking between countries
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uneven development is the result of the “uneven distribution of the bounty of nature”
example can be seen in Landes' synthesis that 'nature is unfair and unequal and this is not easily remedied'
Some countries are endowned with natural resources such as oil and diamonds . There is however very little correlation between natural resource endownment and economic activity.
Another approach is to consider latitude: "Nearly all countries in the geographic tropics are poor, and almost all high-income countries in the mid- and high latitudes are rich.” However “Underdeveloped countries are poor. With poverty comes ill health. But the poor health is thought, incorrectly, to somehow stem from the natural environments of these regions, not from poverty” Also, many economists argue that lower GDP per capita in the tropics is due to poor governance and the legacy of colonialism