Download 1.1 Economic Structure and Development

Employment
Structures &
Development
LEDC’s
• High % employed in primary sector
• V.low % employed in secondary
• Low % employed in tertiary
Large Primary sector
•LIMITED EDUCATION OPPORTUNITIESLow literacy and numeracy rates limit
employment prospects for many workers.
Low skilled farming/mining work may be
the only work available.
•LOW CAPITAL AVAILABILITY - Labour
intensive methods (more workers - fewer
machines) reflect the lack of capital
(money) available for investment in new
machinery.
Large
Primary
sector
•WEAK DEMAND FOR GOODS &
SERVICES - A weak economy (low
wealth) means little demand for the
products of secondary and tertiary
industries.
•LOW PRODUCTIVITY - Labour
intensive methods can reduce
productivity and wealth creation.
Workers may also be ignorant of
modern methods.
Very small secondary sector
•LACK OF DOMESTIC CAPITAL to invest
in manufacturing activities.
•LOW EDUCATION STANDARDS result in
a limited availability of skilled workers. This
may put off potential investors.
Very small secondary
sector
•LACK OF INVESTMENT IN BASIC
INFRASTRUCTURE (eg. roads, ports,
energy, and telecommunications). This
may put off potential investors.
•LITTLE DOMESTIC DEMAND for
manufactured goods (few people have the
money to buy consumer goods).
Small
tertiary
sector
Mainly of low income services like retail (shops)
and those in the public sector (government
departments).
• LOW LEVEL OF WEALTH means little demand for
sophisticated services eg banking, insurance, medical care,
education, business services, tourism etc.
• LIMITED EDUCATIONAL OPPORTUNITIES mean that few
are able to train to work in the more sophisticated service
sector.
• LACK OF CAPITAL AVAILABLE to invest in the service
sector.
What happens as countries
develop?
• Primary sector continues to fall
• Secondary sector grows
• Tertiary sector grows
Why does this
happen?
•EDUCATION STANDARDS IMPROVE More people acquire the skills needed to
work in secondary and tertiary industries.
•INCREASED WEALTH increases effective
demand for manufactured goods and
services.
Why does this
happen?
•LOW COSTS OF PRODUCTION
(especially due to relatively low wages)
attract investment capital. New factories
are built and new jobs are created.
•INCREASED MECHANISATION in the
primary sector releases workers to take up
better paid opportunities in the secondary
and tertiary sectors.
What happens as they
develop further?
• Primary sector continues to fall.
• Secondary sector starts to fall
• Tertiary sector continues to dominate
and rise.
• Quaternary sector develops
Why does this
happen?
• IMPROVEMENTS IN TECHNOLOGY AND
MECHANISATION lead to increased use of capital
intensive methods in the primary & secondary sectors
(machines replace people). Fewer jobs are available
in these sectors.
• HIGH WAGE COSTS lead some manufacturers to
relocate production to counties with lower wages
reducing employment in the secondary sector. Note
that the high value work like design and marketing
often remains as low wage economies lack the skilled
workers required for these functions.
Why does this
happen?
• HIGH LEVELS OF WEALTH lead to growing demand
for services like tourism and personal services
(beauticians, personal trainers etc), and especially
highly skilled services like banking, education,
medical care, legal work (ie quartenary activities)
• HIGH EDUCATION STANDARDS lead to a growth in
the supply of highly skilled workers to all sectors, and
especially to the tertiary & quartenary sectors.