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Economic Change in the UK

Changes in the economy of the UK are affecting employment patterns and regional growth. The UK's economy used to be based on manufacturing. However, since the 1960s, manufacturing has declined, and tertiary and quaternary industries have grown. In 2017, these industries employed 83% of the UK's workforce -- and this proportion is increasing. The UK also has strong links to other countries through trade, culture, transport and electronic communications.

The UK's economy used to be based on manufacturing. However, since the 1960s, manufacturing has declined, and tertiary and quaternary industries have grown. In 2017, these industries employed 83% of the UK's workforce -- and this proportion is increasing. Important industries include: Services -- e.g. retail and entertainment. Retail employs about 4 million people in the UK. Information technology -- over 670,000 people work in IT, for companies like IBM and Microsoft. Finance -- the UK, and especially the City of London, is home to many global financial institutions. Some, like HSBC, have their global headquarters in the UK. Research -- research and development (R&D) is increasing in the UK, making use of the UK's skilled university graduates. In 2016, over £33 billion was spent on R&D in the UK.

Key Terms

Tertiary industry — Industry involving providing services, e.g. retail, entertainment, finance.
Quaternary industry — Industry involving knowledge, research and development (R&D), and information technology.
Post-industrial economy — An economy where manufacturing has declined and been replaced by service and knowledge-based industries.

Case Studies

Exam Tips

  • •Know the three main causes of economic change: de-industrialisation, globalisation, and government policies. Be able to explain each with specific examples.
  • •Remember key statistics: 83% of UK workforce in tertiary/quaternary; 4 million in retail; 670,000 in IT; £33 billion on R&D; UK exports worth over £160 billion/year.
  • •For the north-south divide, learn contrasting statistics: Huddersfield wages 40% lower than London; Glasgow male life expectancy 72.6 vs East Dorset 82.9.
  • •Know the three strategies to reduce the north-south divide: devolution, Enterprise Zones, Northern Powerhouse -- with specific examples for each.
  • •Sheffield Enterprise Zone is a key example: 16,000 new jobs, £318 million investment, McLaren Technology Centre, Great Yorkshire Way.
  • •For rural areas, know one example of population decline (South Lakes, Cumbria) and one of growth (North Somerset) with their economic and social impacts.
  • •The UK's global links cover trade, culture, transport, and electronic communications -- know a specific example for each.
  • •Remember the UK left the EU in 2020 but is still part of the Commonwealth (54 states).
  • •Foreign trade as proportion of UK GDP increased from 38% (1965) to 62% (2017) -- shows increasing globalisation.