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Decline of the primary sector in the uk

UK History and Changing Employment Sectors

Is UK manufacturing in decline? Published 27 Mar 2018, 11: A clear example can be the aerospace sector which is a sector at the technological frontier for which the UK is the second largest producer in the world after the US you can read more about it on our aerospace sector bulletin.

  1. The simple answer is.
  2. And yet many of the arguments that preoccupy the British are haunted by the spectre of manufacturing.
  3. Aditya Chakrabortty's talk on the de-industrial revolution is on Radio 3, 18 November, 10pm.
  4. The Centre for Research on Socio-Cultural Change at Manchester University calculates that, between 1998 and 2007, the bulk of the new jobs in the Midlands, the north, Wales and Scotland came from the state.

And this is not the only example! Is it just the UK or have other countries followed a similar path? Most of the countries in the high income category have moved towards an economy mostly based on services instead of one based on manufacturing.

Historically this was a similar shift as when people moved from the countryside to cities to move from the primary sector to industry. Interestingly, a similar decline trend in manufacturing importance over total economy happened also to countries not part of the high income group. Have all the jobs gone to China? Well, some of them for sure.

China and Eastern Asia in general can be attractive for some activities, usually those where labour cost makes a real difference.

Why Is There A Decline In Employment In The Primary Sector?

These activities are linked to low-tech and low-value added productions. Looking at the numbers, foreign direct investment in China including Hong Kong has been constantly growing in the recent period with a three-fold growth in the international investment position IIP in the period between 2007 and 2016. However, the absolute IIP value in 2016 accounted for only 6.

When production is focused on skills and high-level technology, there is a comparative advantage in producing in the UK or, in general, in the Western world.

Did we shift our production?

Why Is The Primary Sector In Decline?

Linked to the previous point, the production of low value added products has clearly suffered the competition of cheap labour countries. This created an incentive to shift and change the structure of manufacturing. In the graph, we have chosen one sector textiles that, on average, does not require a high level of skills and another one transport where technology and skills are playing a crucial part.

It is pretty clear how the two sectors have diverged in the last decades and it is highly likely that the trend will continue in the future. Can the trend be reverted? However, the most important thing to keep in mind is that manufacturing should not be focused just on enlarging its size compared to the total economy, but it should actually be pushing towards a sustained growth in terms of value added, technology level, and productivity.