Sign up to access the complete lesson and track your progress!
Unlock This CourseEconomic sectors are different parts of the economy that produce various types of goods and services. Understanding how these sectors change over time helps us see how countries develop economically. In developed countries, there has been a major shift away from manufacturing towards services over the past 50 years.
Key Definitions:
This model shows how countries progress through economic development. Pre-industrial societies rely heavily on primary industries. As countries industrialise, secondary industries grow. Finally, in post-industrial societies, tertiary and quaternary sectors dominate.
Developed countries like the UK, USA and Germany have experienced dramatic changes in their economic structure since the 1960s. These changes have transformed how people work, where they live and what skills they need.
In developed countries, primary industries now employ very few people compared to 100 years ago. Modern farming uses machinery instead of manual labour, whilst many mines have closed due to cheaper imports and environmental concerns.
Mechanisation and intensive farming methods mean fewer workers are needed. In the UK, agriculture employs less than 2% of the workforce.
Coal mining collapsed in the UK during the 1980s. Cheaper imports and cleaner energy sources led to pit closures across former mining regions.
Overfishing and EU quotas have reduced the UK fishing industry. Many coastal communities have had to find alternative employment.
In 1920, over 1 million people worked in UK coal mines. By 2015, this had fallen to fewer than 5,000. The closure of mines devastated communities in Wales, northern England and Scotland, leading to high unemployment and social problems that persist today.
Deindustrialisation has been a major feature of developed countries since the 1970s. Traditional manufacturing industries have either closed down or moved to developing countries where labour costs are lower.
Several factors have contributed to the decline of manufacturing in developed countries:
Companies can now produce goods more cheaply in countries like China and India. This has led to factory closures in developed countries as production shifts overseas.
Robots and computer-controlled machinery have replaced many factory workers. Modern factories need fewer employees but require higher skills.
The decline of manufacturing has had significant social and economic consequences:
Detroit was once the centre of America's car industry, employing over 300,000 people in automotive manufacturing. Factory closures and company relocations led to massive job losses. The city's population fell from 1.8 million in 1950 to 670,000 in 2020, with widespread urban decay and social problems.
As primary and secondary sectors have declined, the tertiary sector has expanded rapidly. In most developed countries, services now account for 70-80% of employment and GDP.
The service sector includes a wide range of industries that have grown significantly:
Banking, insurance and investment services have become major employers in cities like London and New York.
Shopping centres, restaurants and tourism have created millions of jobs, though many are part-time or low-paid.
IT support, software development and digital services represent the fastest-growing part of the economy.
Service sector employment differs significantly from traditional manufacturing work:
The most recent development in developed countries has been the growth of quaternary industries. These knowledge-based sectors require high levels of education and training.
Universities, pharmaceutical companies and technology firms invest heavily in R&D. These jobs require advanced qualifications and offer high salaries.
Film, television, advertising and design have become important economic sectors, particularly in cities like London and Los Angeles.
Silicon Valley in California has become the world's leading technology hub. Companies like Apple, Google and Facebook have created thousands of high-skilled, high-paid jobs. The region shows how developed countries can compete through innovation and knowledge-based industries.
Economic sector changes have created a divided geography in many developed countries, with some regions prospering whilst others struggle.
The shift to services has benefited some areas more than others:
Cities with universities, good transport links and attractive environments have attracted service industries. London, Edinburgh and Cambridge are examples of successful service centres.
Former industrial areas have found it harder to adapt. The north of England, central Scotland and parts of Wales still suffer from high unemployment and social problems.
Governments have tried various strategies to help regions adapt to economic change:
Economic sector shifts continue to evolve, presenting new opportunities and challenges for developed countries.
AI and automation may replace many service jobs, just as they replaced manufacturing jobs. Countries need to prepare workers for this change.
Environmental concerns are creating new industries in renewable energy, recycling and sustainable technology. These could provide future employment opportunities.
Understanding economic sector shifts helps us see how countries develop and change over time. For students, this knowledge is crucial for understanding modern geography and planning future careers in a changing economy.