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changing spaces; making places (4) - continued (positive multiplier effect…
changing spaces; making places (4) - continued
global shift
refers to the "relocation of manufacturing across the globe", the shift also came as globalization lead to transfers of knowledge - which allowed LIDCs and EDCs to set up their own manufacturing rather than them simply selling raw materials
combined with the growth of TNCs this led to the new international division of labour whereby traditional manufacturing countries of the west became more focussed on service industries, such as finance; manufacturing moved to EDCs
impacts of global shift:
positive impacts:
cheaper labour costs for companies leads to reduced prices of goods ex. Primark
cheap land (brownfield sites) and falling wages, (high unemployment) leads to Foreign Direct Investment. Companies like Nissan invest in Washington near Sunderland is an ex.
improved environmental quality in urban areas due to the closure of heavy industries
creation of more relevant, more efficient and more productive industries for the future such as the specialisation of the Sheffield Steel Industry in the development of high quality steel rather than mass produced steel (the steel used on most of the world's best ice skates now comes from Sheffield)
negative impacts:
as manufacturing has moved overseas, the old manufacturing regions in the UK and other westernised countries have suffered from deindustrialisation
how does economic boom / recession impact on place and people?
firstly, the cycles may affect different places at different times. when the closure of the steel industry was taking place in sheffield, at the same time steel making in South Korea was booming. globalisation meant the growth of one region at the expense of another falling
secondly, due to the interconnectedness of the world today, it is possivle to have global booms and recession periods. the global recession of 2008/9, was an example of such an event where vitually all of the world economies suffered, although some suffered more than others!
positive multiplier effect as a result of economic BOOM
....new economic activity ex. manufacturing plants open
many businesses supplying parts will benefit
more job opportunities are created
increased spending power
higher tax means more government spending power
the infrastructure of the area will improve
the area becomes a more desireable location
more businesses are attracted to the area....
negative multipler effect as a result of deindustrialisation
deindustrialisation and factory closures
fewer jobs means that the unemployment levels rise
spending power decreases
decline of the area ex. rundown houses
more people leave (out-migration occurs)
the area becomes even more rundown meaning investors are not attracted to the are
different policies that the government can use to tackle social inequalities
taxation
- progressive tax systems where the better-off pay a larger proportion of their incomes in tax
subsidies
- free school meals, free child care for single parents, welfare payments
planning
- upgrading of council housing and services in the poorest areas
law
- discrimiation on racial, ethnic and gender criteria are outlawed. aims to give equal opportunities to all groups. the poorest groups of workers are protected by the minimum-wage legislation
education
- training programmes; also initiatives improve personal health ex. diets, obesity are targeted at the poorest groups in society