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Economic activities and energy

Economic activity and energy


What you need to know:


Economic activities – Videos BBC (click on the image below)



Economic activities and sectors

Industry can be classified using a four-way division. Over time, the percentage of the population of a country working in these different sectors of industry will change as the country develops. This is covered in the ‘Employment structures’ section.

Primary industries are classified as those which produce the raw materials for industry. Examples include mining, quarrying, farming, fishing and forestry, all of which produce raw materials that can be processed in to a finished product – this is the primary sector


Secondary industries are the manufacturing and assembly industries. They take raw materials and manufacture finished products from them. Examples include steel manufacture, bread making and food processing – this is the secondary sector.


Tertiary industries are service industries, and are the area of most growth in the HICs. Examples include doctors, teachers, lawyers, estate agents, travel agents, accountants and policemen – this is the tertiary sector.


Quaternary industries are the newest, most hi-tech sector of industry. They are the research and development industries. Examples include the development of new computer components and research into GM crops – this is the quaternary sector.



Changes over time and space

As a country develops the proportion employed in the primary sector decreases and the proportion employed in the secondary and tertiary sectors increases. Eventually the quaternary sector develops as the country becomes more scientifically educated.

The Clark-Fisher model demonstrates how countries move through the three phases (pre-industrial, industrial and post-industrial). The UK is an example of post-industrial society.

Employment structures can also change over time within the same country. In the UK in 1800 most people would have been employed in the primary sector. Many people worked on the land, and made their living from agriculture and related products. As time went on the needs of the country changed and people were required to work in industry thus the secondary sector started to flourish. The demand for work increased in schools, hospitals and retail industries. Many people left the rural areas in the search for jobs in the towns and cities. By the year 2000 over half of the UK workforce were employed in tertiary industries and only a small number were employed in primary industries. Quaternary industries are a relatively new concept, and it is only recently that they have been added to these figures. However it is becoming an important and growing sector in the UK as many firms want to carry out research and development for their products.


Comparing employment structures

The employment structure of a country shows how the labour force is divided between the primary, secondary and tertiary sectors. Different countries have different employment structures. The employment structure of a given country can tell you quite a lot about its economy.
In the richest countries, for example, there will usually be more people working in the tertiary/quaternary sector than in the primary and secondary sectors. In the poorest countries, there tend to be more people working in the primary sector than in either the secondary or tertiary sectors.


Informal economy

The informal economy employs millions of people across the world especially in LICs however it is an unofficial or unregulated economy. Therefore, it is not recognised in the official figures of governments. It is often referred to as the black economy/market.

Formal Economy: The economy that is formally registered with authorities and regulated by the government. The formal sector will be liable to pay taxes.
Informal Economy: The section of the economy that is not registered with the government, is not regulated and does not pay taxes. The informal economy is sometimes called the black market.

The informal economy has come about due to a number of factors however the most important particularly in LICs is the underemployment or unemployment in the cities due to mass urbanisation (rural-urban migration).

Advantages of the informal economy:
Many independent poor people work in the informal sector e.g. car washers or shoe shiners. This often means the money goes where it is most needed.
It often employs people with low skill and education levels who might normally find it hard to get a job.
Workers may learn skills which means that they can get jobs in the formal economy.
Many businesses are labour intensive and don’t rely on technology, so they are cheaper to set up and employ more people.
Many businesses actually work in local communities and recycle waste material (a form of recycling).
Can give economic opportunities to illegal immigrants or refugees (of course this could also be a negative because it attracts more refugees and illegal immigrants)

Disadvantages of the informal economy:
Parts of the informal economy is involved in illegal activities like the drugs and sex industry.
The government does not receive taxes from these businesses.

Because they are not regulated they don’t follow any environmental guidelines and can often cause pollution.
Workers can be exploited by not being paid fully, not receiving sick pay or being forced to work in dangerous conditions.

Nancy Birdsall of the Centre for Global Development puts it: Economists have stressed the negative aspects of informal trade for decades. Informal businesses often don’t pay taxes, and they routinely lack the capital and expertise to be as productive as big enterprises, leading to less innovation and lower standards of living. Since informal workers lack health benefits and other safeguards, they have to save more for emergencies, resulting in less casual spending that further drags down growth.

Child labour and the informal economy
Sometimes children have to work in the informal sector to support themselves or their family. This might be because they have been orphaned, run away from an abusive family or belong to a single parent family. Working in the informal sector from a young age is likely to deprive them of an education, which means that they probably won’t be able to go to university or get a job in the formal economy. Even if children are learning skills in the informal market they should never be in the position where they have to give up school to go to work.

imageUnfortunately it is estimated that some 200 million children are being forced to work, many in dangerous and illegal activities like the sex industry, armed conflict, mining and domestic slavery. The ILO (International Labour Organisation) and UNICEF (United Nations Children’s Fund), both part of the UN are trying to raise awareness and end child labour. The informal economy and child labour within it perpetuate the cycle of poverty. The route cause for this type of labour is poverty and it won’t go away until poverty has been eradicated.


The growth and location of tertiary and quaternary activities

The location of tertiary and quaternary activities over the last 25 years in HICs has been on the rural-urban fringe. This has been down to deindustrialisation – the movement of people and businesses out of the CBD due to negative push factors (congestion, pollution, crime etc). The government has tried to stop the outward spread onto the green belts however the economic power these industries have is very strong. Signs of this happening are:
Superstores and retail parks
Industrial estates
Business parks
Science parks.


Why is Cambridge a good location for a science park?

The city has good road links to London (M11) and to East Anglia’s ports (A45), as well as to the Midlands and the North. It is close to London’s third airport at Stansted and has access to Gatwick and Heathrow airports via the M25.
There is a fast, direct rail link to London. Cambridge University has a long history of scientific achievements. Industries can therefore draw on the research and scientific knowledge of many experts. Cambridge is a centre for large numbers of hi-technology (quaternary) industries. Because of this it is sometimes called ‘Silicon Fen’.


What benefits does the science park bring to Cambridge?

Hi-technology industries provide jobs, they now employ almost one quarter of workers in the Cambridge area. Other companies have developed in Cambridge to supply the hi-technology firm with equipment, services etc. These companies will also employ people, in this way a multiplier effect begins to develop.

The changing location of manufacture

There has been a global shift in manufacture from the HICs to the MICs particularly the so-called emergent economies of China, Brazil, Russia and India the BRICs. This has come about due to developments in the following areas:
TNCs – the companies are locating their factories in the cheapest and most profitable locations
Transport – this has become faster and cheaper
Communications – speed and efficiency of modern ICT
Energy – energy can now be made available almost anywhere
Governments – they are able to temp industry to set up in their boarders by various incentives eg exempt from tax
New types of manufacture – not just heavy industry anymore now a range of hi-tech products like electrical goods.

However, TNCs still need to have a highly educated work force especially for high tech industries. Therefore, the UK is still a sought after location for these industries. The M4 corridor is a significant manufacturing area stretching from London to Bristol and Cardiff. Many of the industries that locate her are called . A footloose industry is : an industries are not tied to a particular location. They include high-tech industries and are located near motorway junctions or on the edges of towns and cities in business parks. The products are often electronics and computer components.


Case study. – the M4 corridor

The M4 corridor is the area either side of the M4 motorway running from London in the east of the UK across to Bristol and Cardiff in Wales. The area has become famous because of its concentration of hi-tech industries. Many hi-tech industries are footloose so not tied to a particular raw material. Therefore, they are able to look at other locational factors. The M4 corridor has become a popular location because:
Transport – The M4 road runs through the region and connects to the M25 and M5. London has five airports (including the world’s busiest international airport (Heathrow). There are also further airports in Bristol and Cardiff. A railway line also runs through the region.
Labour – there is a large pool of educated workers, not only in London, but also Swindon, Reading and Bristol.
Universities – Cardiff, Bristol, Bath, Reading and of course London have multiple universities that can not only supply skilled labour but also research and development facilities.
There are attractive areas to live nearby and enjoy recreation time.
Market – Much of the South of England is wealthy so there is a large potential market for new products.
Existing Industries – There is already existing government research facilities and other research based companies like British Aerospace and Rolls Royce in the area.
Conglomeration – If hi-tech firms group together they can share associated services. Associated companies may range from cleaning and security firms, to IT repair and research labs. By sharing services it should reduce costs and increase the amount offered.


Energy demand and the energy gap

The word document, below, relates to the IGCSE edexcel syllabus.


The rising demand for energy is due to increasing population and economic development. As a country develops energy consuming activities such as manufacture and transport increase. The rising demand for energy will be met by either the country using its own energy or importing from other countries (producer countries).

The energy gap

This is the difference a countries rising demand for energy and the ability it has to produce that energy from its own sources. This can be seen in the UK where the gap is widening by the deliberate phasing out of fossil fuels.

Types of energy – non-renewable and renewable.

Non-renewable energy: Energy that can not be reproduced in the time that it takes to consume it e.g. coal.

Renewable energy: Energy that is naturally occurring and potentially infinite.

Non-renewable energy

Energy production using coal can be increased or decreased according to demand
The technology to burn coal to generate electricity already exists
Coal is finite so will eventually run out.
Many existing reserves are becoming harder to extract or are in environmentally sensitive areas
Coal releases large amounts of greenhouses gases when burnt
Mining deep underground coal is very dangerous
Coal is very bulky and expensive to transport around the world


Energy production using oil can be increased or decreased according to demand
The technology to burn oil to generate electricity already exists
Technology is improving to extract deeper reserves as well oil in tar sands (Canada).
Oil is finite so will eventually run out
A lot of oil is located in politically unstable countries or environmentally sensitive areas e.g. Libya and Iraq.
Oil can cause widespread pollution when spilt
Oil releases large amounts of greenhouse gases when burnt
Oil is vulnerable to large scale changes in its price
The production of oil refineries is expensive


Energy production using gas can be increased or decreased according to demand
The technology to burn gas to generate electricity already exists
Burning gas releases less greenhouses gases then coal and oil
It is now possible to compress gas and transport it more easily.
Gas is finite so will eventually run out
A lot of gas is located in politically unstable countries or environmentally sensitive areas.
Gas is vulnerable to leaks and explosions


Renewable energy

Solar: Using the power of the sun to heat water or generate electricity.
It is a clean form of energy
It is a infinite resource
Panels can be used locally e.g. on top of someones house
It can be used to heat water and generate electricity.
It is expensive to make solar panels
The sun does not shine all the time
Not every country gets adequate levels of sun
They can’t be used at night
It is hard store surplus energy
Supply does not always equal demand.


Wind: Using the power of the wind to drive a turbine to generate electricity.
It is a clean form of energy
It is an infinite resource
It can be used on a local scale e.g. in your back garden
Technology is proven
They can be placed at sea on in mountains away from settlements
Visual pollution (NIMBY – not in my back yard)
Noise pollution
Wind is unreliable
They are expensive to install, especially offshore
It is hard to store surplus energy
They have to be turned off in very strong winds


Tidal: Using the incoming and outgoing motion of the tide to generate electricity.
It is a clean form of energy
It is an infinite resource, tides happen twice a day.
Ideal for island countries.
It can block important shipping routes
May interfere with some animals e.g. sea otters and seals
Limited number of sites
Useless for landlocked countries
High start up costs. The technology is still being developed
May be damaged by tropical storms


HEP (Hydroelectric power): Using the power of falling water in rivers to drive generators. At the moment dams have to be built to create HEP power.
It is a clean form of energy
It is finite as long as rivers are managed properly.
The built dam can also prevent flooding.
The reservoir behind the dam can be a store of water.
Only a limited number of suitable rivers
Can hamper navigation up and down river
Reservoirs may force resettlement
Migration patterns of animals maybe disrupted
Dams reduce the deposition of alluvium downstream
Dams can flood large areas of land.


Biofuels: The use of biological matter to create energy. It is a renewable form of energy, but because the mater is often burnt it still releases greenhouse gases.
It is a renewable form of energy as long as people replant crops.
It is cheap and the resources can be grown locally
It can still release greenhouse gases.
Areas can be deforested to grow crops for energy generation.
If crops are used for energy production it can lead to an increase in food prices.


Geothermal: Geothermal uses thermal energy from the earth to heat water. The water can be used as a source of hot water or the steam released can be used to drive turbines.
It is a clean renewable form of energy.
It is a finite resource.
Can be used to heat water and generate electricity.
Geothermal energy can be created constantly and is not dependent on the weather.
Not every country has geothermal potential.
Installation and start up costs are expensive
Drilling can release harmful gases.
Geothermal activity can change which can make the production of energy harder

The need for energy efficiency


With energy consumption rising, it is important that industry, transportation and consumers in their homes use energy more efficiently, so that less is wasted. This will also save money on fuel bills. We can all help by making changes to our lifestyles and our houses – for example by:
walking, cycling, or using public transport rather than fossil-fuel powered cars
using smaller more energy-efficient cars
reducing the number of aircraft journeys taken (especially short-haul flights)
switching off lights, power sockets, phone chargers and televisions when not in use
using energy-efficient light bulbs and rechargeable batteries
recycling and reusing plastics and oil-based products
insulating house roofs, blocking drafts, using double-glazing and more efficient heating systems
considering introducing solar panels, or switching to an electricity supplier that supplies green electricity.

Fuel wood


Fuelwood is the most common source of energy for people living in LICs – it is estimated that about 40% of the world’s population rely on fuelwood. Fuelwood is often the main source of energy because countries either can’t afford to buy raw materials to produce energy, don’t have the technology or money to build and operate powers stations and certainly don’t have a national grid to distribute energy. Fuelwood has multiple functions, it can be used for cooking, heating and scaring away wild animals. Although using fuelwood is essential for many people it can cause environmental and social problems. Problems include:

Biodiversity loss (vegetation is removed and animals lose their home)
Desertification and reduced rainfall
Increased soil erosion and increased sandstorms
Increased time spent looking for wood
Children taken out of school to look for wood
Dangers posed by collecting wood (wild animals and criminals)
Dangers of breathing in smoke inside houses
Risk of fire within houses.


Nuclear power

Nuclear power is an increasingly important source of energy, accounting for over 20% of the UK’s energy. Nuclear power uses heat obtained from uranium or plutonium atoms which are split. Water or gases (such as carbon dioxide) are used as a cooling system around the core. Steam is produced by heat created from the reactor and this steam is used to turn the turbines which in turn are used to generate electricity.

Nuclear Power in the UK
There are now about 20 nuclear power stations in the UK.

Nuclear power stations tend to be located close to the coast because…
– they are remote and away from centres of population (due to the possible dangers which can be associated with nuclear power
– large quantities of water are required for the cooling process
– uranium is imported
– power stations need deep foundations


Advantages of Nuclear power:
– only a small amount of uranium is required to produce very large amounts of energy
– nuclear power is a clean energy source – no toxic gases are released
– uranium is cheap and easily available
– it is a cheaper energy source than fossil fuels
large reserves of uranium are available

Disadvantages of Nuclear power:
– problems associated with disposing of nuclear waste (remains a danger for a long time – thousands of years)
– although uranium is cheap, the power stations themselves are expensive to build in the first place (Around 1.5 billion pounds)
– whilst staff are highly trained there is potential danger – e.g. the Chernobyl disaster (Ukraine, 1986)
– it is expensive and difficult to make old power stations safe
– nuclear power stations are restricted in possible locations (must be on firm, stable land – usually away from large centres of population for safety).


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