ECON - Comparing Levels of Economic Development Within Countries [LESSON]
Comparing Levels of Economic Development with Countries
In this lesson, you will explore the differences in economic development within countries by analyzing various economic activities and their impact on overall levels of development. You will be able to explain how primary, secondary, and tertiary activities contribute to a country's economic landscape and how they shape its overall development trajectory.
Guide Point 🧭
Comparing Levels of Economic Development with Countries
Understanding Economic Activities:
Economic development within countries is as diverse as the cultural landscapes of those countries and involves different types of economic activities. Let's learn about the three main types: primary, secondary, and tertiary (pronounced "TER-SHE-ARY").
Primary Activities:
Primary activities involve the extraction and production of raw materials from natural resources. Agriculture, mining, fishing, and forestry are primary activities that provide the foundation for economic development in many countries. For example, countries with abundant natural resources like oil-rich nations in Southwest Asia often rely heavily on primary activities for economic growth.
Analyze this choropleth world map. Read the title. Reflect on what this map is showing.
A choropleth world map showing which countries have the greatest share of their GDP coming from agriculture. African nations have the highest rates.
Did you notice which countries have the largest share of their GDPs coming from agriculture? That should be a strong indicator of which countries are primarily engaging in primary economic activities. Every country engages in agriculture on some level, so it is important to show agricultural production as a share of GDP to demonstrate the relationship.
So, what would it look like if we didn’t compare agricultural produce as a share of the GDP? Well, since you asked.
A choropleth world map showing the total value of agricultural production around the world.
What do you notice as you compare the two maps? Many African countries rely on agricultural production for a large share of their GDP, but do not produce a significant total value of agricultural production. Further evidence these countries rely on primary activities.
Here is another way to analyze it. This time on a graph. Read the title. What relationship is this graph revealing?
A graph showing the relationship between GDP per capita and the percentage of the workforce engaging in agriculture, showing a trend of the lower the GDP per capita, the higher the percentage of the workforce engaged in agriculture.
Did you notice that the lower the GDP per capita, the higher the percentage of the workforce is engaged in agriculture? This is another strong indicator that the more a country is primarily dependent on agriculture for their economy, the greater the economic struggle.
Secondary Activities:
Secondary activities encompass manufacturing and industrial processes where raw materials are transformed into finished goods. Manufacturing sectors play a crucial role in driving economic growth and employment opportunities. Countries like China and India have experienced rapid industrialization over the past few decades, leading to significant economic expansion, structural transformation, and environmental concerns.
Analyze this choropleth map. “Medium & High Tech” are forms of manufacturing that require significant resources, technology, and a highly skilled workforce.
A choropleth world map showing which countries have the highest and lowest total manufacturing value added to their respective GDPs, generally showing a greater percentage in wealthier countries.
Did you notice that “developed,” “high-income,” or “core” countries have a higher percentage of their GDP coming from this kind of manufacturing? This is an indication that these countries are engaged in secondary economic activities.
Tertiary Activities:
NEW YORK, USA - OCT 21, 2015: people visit Times Square, featured with Broadway Theaters and huge number of LED signs, is a symbol of New York City and the United States.
Tertiary activities involve providing services to consumers and businesses, including retail, education, healthcare, finance, and tourism. The tertiary sector is often considered the backbone of modern economies, contributing the most to GDP and employment. Developed countries like the United States (Times Square in New York City pictured) and Japan have highly developed tertiary sectors, reflecting their advanced economic status.
The healthcare industry is squarely at the center of tertiary economic activity. Analyze this map. Read the title. What does it show?
A choropleth map showing how much each country spends on healthcare as a share of their GDP in 2021, showing the United States as one of the countries who spends the most on healthcare as a share of the total GDP.
Did you notice which economic development levels can spend the most on healthcare? Did you notice any outliers? Find Afghanistan. Do you have any ideas about that?
Another sector that is at the center of tertiary economic activity is education. Analyze this map. What do you notice?
A choropleth map showing spending on education across countries as a share of GDP, revealing higher percentages in the western hemisphere and in Western Europe.
Did you notice higher-income countries spending more on education as a percentage of their GDP?
Economic Activities and Development Levels Within Countries:
The relationship between economic activities and development levels within countries is intricate and dynamic. Developed, high-income countries typically have diversified economies with strong tertiary sectors, indicating a shift from primary and secondary activities towards service-based industries. These countries often experience advanced urbanization and industrialization, leading to higher productivity and standards of living. For example, the United States and Japan have highly developed tertiary sectors, reflecting their advanced economic status. In contrast, developing countries may have economies dominated by primary and secondary activities, with limited development in the tertiary sector due to infrastructure limitations, inadequate education, and limited access to technology.
Economic development within countries varies significantly based on factors such as government policies, investment in infrastructure, education, and technological innovation. Government policies play a pivotal role in shaping economic development trajectories. Fiscal policies, monetary policies, trade policies, and regulatory frameworks influence investment decisions, market dynamics, and economic performance. Countries with transparent and stable policy environments often attract more investment and achieve higher levels of economic development.
In developed countries, urbanization and industrialization are more advanced, leading to higher productivity and standards of living. Developing countries may still be in the early stages of industrialization, with agriculture and manufacturing playing prominent roles in their economies. Urbanization rates in these countries may be rising as people move from rural areas to cities in search of better opportunities. However, challenges such as income inequality, inadequate healthcare, and environmental degradation may persist, affecting overall economic development and the standard of living.
Let’s revisit a map from the previous lesson. After this lesson you may have additional insights.
A choropleth map showing the income levels of countries, showing higher income countries in North America and Western Europe.
Reflection
As we wrap up this lesson, reflect on the complex relationship between economic activities and development levels within countries. How does the presence of primary, secondary, and tertiary activities vary across high-income and low-income nations? By understanding these connections, you gain valuable insights into the diverse economic landscapes and development challenges faced by countries worldwide.
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