The Changing Economy of the UK

Changing primary and secondary sectors

Over the past 50 years, the UK's employment structure has changed in line with the Clark Fisher Model. 50 years ago, the UK's secondary sector was of fairly high importance with 38% of people employed in it, but since 1960, it has been in decline with the UK experiencing deindustrialisation. In 2010, only 18% of of people were employed in the secondary sector while 80% of people were employed in the tertiary sector. The main reason for this is globalisation.
Industrial sectorEmployment changeWhy
Agriculture1990: 690,000
2009: 499,00
  • More machinery (mechanisation) used in agriculture = less need for a large labour force
  • More use of chemicals + fertilisers to increase crop yields
  • Larger farms to increase efficiency
Mining and Quarrying2000: 15,300
2011: 11,200 
  • More mechanisation reducing the need for large labour forces
  • Exhaustion of mineral deposits in some areas
  • More people against mining and quarrying leading to projects being abandoned
  • Cheaper and easier to import from other countries
    • Also saves money on measures needed to prevent environmental damage
Iron and Steel1960: 250,000
2010: 20,000
  • Government experienced strikes in the 1960s and 70s so privatised it in 1988 to prevent further losses
  • Cheaper to import steel from other countries like South Korea and countries in Europe
Footwear, textiles and clothing1960: 1 million
2010: 100,000
  • 1950s onwards it was cheaper to get our textiles from Taiwan, India and Bangladesh
  • Globalisation and cheaper transport costs made global exports and imports of textiles cheaper

Changing tertiary and quaternary sectors
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The large majority of people in the UK (80%) work in the tertiary/service sector. The amount people earn varies a lot because the types of jobs within this sector can be very different. For example, there can be cleaners who work on the minimum wage (£6.19 per hour in 2012), and then there are the city bankers who can earn £250,000 or more in a year. Tertiary sector jobs such as Retail, Hotels + Catering, Finance, Education and Health have all grown in recent decades. The largest growth was in Health with a 90% increase between 1981-2011.

Quaternary sector jobs have also begun to grow in the UK. In 1981, only 1.7 million people worked in ICT, professional, technical and scientific employment, but in 2011 it grew to 3.7 million. This growth is because of the investments firms are making in larger research facilities and to develop and keep up with the rapidly moving industries. The quaternary sector is important because...
  • the jobs are highly skilled, highly paid and employ university graduates
  • the research and development done in this sector can be used to invent new products that can be exported
  • there are a lot of TNCs in this sector who can quickly invest in new products
The current strengths in the quaternary sector which the UK has are:
  • aerospace technology
  • agricultural and food research
  • chemicals, pharmaceuticals and biotechnology research
  • digital imaging, internet and web design

Employment Change

Employment can be classified in different ways, for example:
  • Full-time/part-time
  • Average wage
  • Temporary/permanent
  • Male/female
  • Executive/skilled/semi-skilled/unskilled


ChangeWhy
Total Workforce1960: 24 million
2010: 27 million
Despite the UK's population growing 10 million in this time period, the total work force only grew by 3 million. This is because young people are staying in education for longer and there are more elderly people who aren't or unable to work.
Average wagesFull time wages
1960: £14 (worth £220 today)
2010: £450
The decline in unskilled and skilled manual jobs means to get a job people need some qualifications and skills, and therefore will earn more money.
Women in the workforce1960: 35%
2010: 49% 
In 1960, women only received 20% of university degrees, today it is up to over 50%. Women are focusing more on their careers, being more independent, deciding to marry later on in life and have fewer children.
Part-time jobs1960: 5%
2010: 25%
The 1960s workforce wasn't as flexible as it is today. Part-time work also suits people with families more than full-time work.
Working hours1960: 42 hours a week
2010: 32 hours a week
      (37 for full-time)
More people are working part-time or working at home.
There has also been an increase in temporary work in addition to part time work. This is because companies may only need extra workers when there is an increase in demand for them. For example, at Christmas shops will often employ extra temporary workers to help with all the extra Christmas shoppers.
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Contrasting Regions

The UK is seen to have a 'North-South Divide' in economic terms.

North-East England

Coal-mining, shipbuilding, chemicals and iron and steel production used to be the main industries in the North-East region of England, however they have rapidly declined in recent decades. For example, in 1947, there were 108,000 miners working in 127 pits, but by 1994, the last mine closed and employment fell to just 55. Even today, the North-East relies more on secondary industry employment and public services, while the South-East has a more private industry in the tertiary and quaternary sectors. Because of this, the economic conditions in the South-East are much better than in the North-East.
Source: Office for National Statistics licensed under the Open Government Licence v.2.0.

There are many different reasons to explain the differences between the South-East and North-East:
  • The South-East has many motorway networks concentrated around it making it easier for firms to distribute their products around the country or world
  • The South-East is also home to the UK's 4 major airports: Heathrow, Gatwick, Stansted, Luton, making communication to other countries easier.
  • Situated near important ports, such as Southampton
  • The workforce in the South-East is better educated, and better paid while the North-East has more jobs in the secondary sector.
  • The population decline in the North-East is people moving out of the area to look for work in other regions of the country, such as the South-East.

Environmental impacts of changing employment

As different regions of the UK moves into post-industrialisation and out of industrialisation as the Clark Fisher Model shows, the factories which were in use in the industrial period are closed and replaced by offices, retail units and science parks of tertiary and quaternary industries. All these changes have environmental impacts, both positive and negative.

Case study - Sheffield

Sheffield used to be UK's steel industry until the 1980s when the industry declined dramatically with deindustrialization. As a result of industrialization 120,000 people lost their jobs between 1971-2008, a 74% loss.

The deindustrialization Sheffield has experienced has meant that it is now a gone from the manufacturing industry into retail, software development, property development, business services all having positive and negative impacts on the city:

Positive ImpactsNegative Impacts
Water Quality
During the industrial period, factories would be polluting local rivers and streams with their industrial waste. Now these factories have closed down, the waters are no longer polluted and the water quality has significantly improved.

Air Quality
Similarly to water quality, now that there are no factories releasing pollution into the environment, the air quality is much better.

Regeneration
The old industrial sites which are disused are now available for regeneration, e.g. Hadfield's steelworks is now Meadowhall shopping centre
Derelict Land
As the steel factories closes, about 900 hectares of derelict land and abandoned buildings were left behind, many of them polluted with heavy metals and other industrial waste

Greenfield Sites
As people are unable to find work in inner Sheffield, there is increasing pressure on the greenfield sites on the edge of Sheffield for homes and businesses

Traffic
As jobs in Sheffield are becoming scarcer, people are having to travel further to reach their jobs increasing congestion

Brownfield and Greenfield sites

Greenfield Site - A piece of land that has not been built on before, but is now considered for development
Brownfield Site - A piece of land that has been used and then abandoned, and is now waiting to be developed again.

Advantages and disadvantages of Brownfield Sites

AdvantagesDisadvantages
  • Infrastructure already in place
  • More environmentally friendly and sustainable than building on greenfield sites
  • Can improve the look of an area- regeneration
  • well connected sites - often located in inner cities
  • Can be expensive:
    • Sites could be contaminated with industrial waste requiring decontamination
    • Old buildings will have to be demolished
  • Immediate access to the area may be poor with congested roads

Brownfield site case study - Longbridge, Birmingham

  • Proposed £1 billion redevelopment project 
    for the site of the former Rover car factory
  • Benefits:
    • £70 million will go for the construction of a new town centre
    • There will be a new Sainsbury's store with 165,000 sq feet of retail space.
    • 25 new shops and restaurants
    • 3 new green parks to improve the quality of the local environment
    • 40 apartments beside the parks
    • 10,000 new jobs
    • 2000 new homes on 468 acre site
    • New community facilities
    • Bournville college relocated to new site costing £66 million
    • Eases pressure on nearby greenbelt
    • In 2011, 98% of housing building in Birmingham was on Brownfield sites
  • Costs:
    • Nearby shop owners in Northfield fear they will lose trade
    • Local house prices will go up with the demand for new housing - local people may no longer be able to afford them
    • An increase in congestion on the roads

Advantages and disadvantages of Greenfield Sites

AdvantagesDisadvantages
  • New sites do not need clearing so can be cheaper to prepare
  • Pleasant countryside environment may appeal to potential home owners
  • More space for gardens
  • No restrictions of existing road network
  • Land can be cheaper on outskirt so plots can be larger
  • Some shops and business parks on outskirts provide local facilities
  • New infrastructure will need to be built, e.g roads, drains, electricity, gas
  • Destroys wildlife habitats
  • More traffic on country roads
  • Less land for farming
  • Encourages urban sprawl
  • May encourage more car travel as people need to commute to and from work

Greenfield case study - Dudley, West Midlands

  • Plan to build 334 homes in Pensnett, an area on the edge of Dudley.
  • 27 two-bedroom flats
  • 126 three-bedroom, 128 four-bedroom and 8 five-bedroom houses
  • Benefits:
    • nice environment surrounding the site as there is greenbelt countryside surrounding it
    • no need to demolish old buildings you would find on brownfield sites
    • new homes will be built
    • new jobs
  • Costs:
    • New infrastructure will need to be built
    • added congestion to an already congested area
    • not sustainable - added pressure to greenfield sites
    • area losing more green space

The diversification of employment in the UK

There are a series of factors which is causing the economy and employment in the UK to change dramatically.

Development of the Digital Economy
Technology has made huge leaps and bounds across the world, changing our lives at work, at home, at school. It is generating new market opportunities and having major economic impacts. In 2000, only 29% of people in the UK owned a personal computer. In 2009, this figure had gone up to 76%. In 2011, the use of mobile phones reached 78% of all UK households. With computers, tablets, mobile phones, digital cameras, satellite navigation, embedded sensors and a vast array of other interconnected devices part of our daily lives, it is the beginning of a shift towards a world of computing.

There are various costs and benefits associated with the digital economy:
  • Benefits
    • Connectivity across the world quickly and easily
    • More reliable systems
    • Transactions can take place much more quickly with fewer mistakes
  • Costs
    • The internet, in particular social networking sites, poses a threat to young and vulnerable people - they meet undesirable people
    • More online criminal activity, e.g. fraud
Education and Research
Education and research is becoming of increasing importance in all aspects of our lives. Economic development in particular is being impacted upon positively by universities conducting more research and developing more new products such as new treatments for disease and new drugs to combat disease. An increase in funding in research for new technologies is creating new jobs and even new industries. For example, in the North East, the number of companies with biotech interests has gone from only 28 in 2003 to 54 in 2011, contributing £700 million to the economy and providing 5,000 jobs for people. The area has interests in biofuels, and stem-cell and regenerative medicine.

Foreign Workforce
In recent years there has been a large increase in the number of foreign workers in the UK. These workers from countries like Romania, Poland and Portugal will often come to the UK to do the jobs which British people don't want to do, or fill skills shortages in other areas. There are many workers from EU countries who come to the UK to work in the UK agriculture industry. In 2011, there were 2.6 million foreign workers in the UK.

Green sector employment
Europe has pledged to reduce its carbon emissions by 20% by 2020 and to obtain 20% of its energy from renewable sources. This will mean there will be new jobs created by these new green technologies to help achieve these targets. The areas where the jobs will be created are: 
  • Generation of renewable energy - wind turbines, solar power generators, hydroelectric power stations
  • Water management
  • Waste management - more workers will be needed to handle increasing volumes of recycling
  • Green transport

Changing Working Practices

The way people are now working has also changed along with the types of job people do. The main cause for this is probably the communications revolution, allowing people to be able to work together but be in different offices, at home or even in another country.

Homeworking
Home working is where people work from home on a permanent basis. This type of working suits people whose job doesn't require face-to-face contact with people and are often working on a computer for long hours. Workers are able to work from home using ICT to stay in contact with the office and other colleagues. Other benefits from homeworking include:
  • For some people it can save them commuting to and from work also saving them money on travel costs
  • They can choose to work from home whenever they want to
  • Employees can care for children or other family at home while working
  • Employers can save money on office space, heating bills, electricity bills, etc.
Teleworking
Teleworking is very similar to homeworking, but as well as working from home, workers are able to work from wherever they are using mobile communications and ICT. They may find themselves working from a coffee shop or various other locations. The benefits are the same for homeworking. These people are sometimes referred to as 'nomad workers' or 'web commuters'. 

Self-employment
Increasing numbers of people are deciding to set up their own business and become self-employed. They may be working from home, working in their shop, factory or offices. People may choose to become self-employed because:
  • they would rather work for themselves rather than a company
  • they may have been made redundant and decided to start their own business
  • they have had a good start-up idea, e.g. Mark Zuckerberg & Facebook, Bill Gates & Microsoft
The number of self-employed people in 2002 was only 3.3 million, however in 2011 it went up to 4.5 million.

Flexible Working
In the last 20 years, there has been a growth in flexible working, affecting different people in different ways:
  • Flexitime - choosing when to work around a core period
  • Compressed hours - working agreed hours over fewer days
  • Homeworking - working from home
  • Zero-hours contracts - no specified hours, but always available to meet the needs of the employer

Impact of changing working practices

  • Reduction in rush-hour commuting as more people are working from home and fewer people travelling into offices/workplaces
  • Employees save time and money as they do not have to commute to work
  • Firms saving on office space and implementing 'hot-desking' - where people don't have a permanent desk, instead they use any desk/computer/workspace which is available
  • Employers can continue to employ people even if their circumstances have changed, e.g. new parents