What is development?
Key terms
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Watch the following two YouTubes and make a list of some ways that we can measure a country's development. |
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| How we measure development |
What is a composite index?
Composite development index: measures more than one variable. It do not just consider GDP per capita but will also consider for example Education. These are considered to be more accurate that looking at a single factor because they can take into account a variety of socio-economic indicators and therefore no single factor can 'tip the scales'.
Human Development Index (HDI)
A tool developed by the United Nations to measure and rank countries' levels of social and economic development based on four criteria: Life expectancy at birth, mean years of schooling, expected years of schooling and gross national income per capita. The HDI makes it possible to track changes in development levels over time and to compare development levels in different countries.
A tool developed by the United Nations to measure and rank countries' levels of social and economic development based on four criteria: Life expectancy at birth, mean years of schooling, expected years of schooling and gross national income per capita. The HDI makes it possible to track changes in development levels over time and to compare development levels in different countries.
Human Development Index
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Explain how the Development of a country can be measured [5] |
Disparities
Global North and South
More Economically Developed Country (MEDC): is a sovereign state that has a highly developed economy and advanced technological infrastructure relative to other less industrialized nations.
Less Economically Developed Country (LEDC): a non industrialized poor country that is seeking to develop its resources by industrialization |
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Create a spider diagram outlining what affects a country's development. |
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Physical factors
Climate Many of the poorest countries are in the tropics, where it is hot, the land is less fertile, water is scarce, and diseases flourish. Natural resources Some raw materials are valuable and can help a country develop if they have the resources to collect and process them, eg oil, diamonds, forests and gold. Location Being near trade routes and having access to the sea, eg ports have been important for trade. Landlocked countries are at a disadvantage. Natural hazards Some places are vulnerable to natural disasters, eg Haiti is located in an area prone to earthquakes and hurricanes. |
Political factors
Trade Goods are traded on a global scale but it is difficult for poor countries to compete. Some believe the rules of trade are unfair. Rich countries can raise tariff barriers to stop cheap imports undercutting their own goods. In the past some countries made money by colonisin gother countries and using their raw materials to produce manufactured goods. Corruption/poor management Countries need strong, stable and honest leaders to help them develop. War Wars use up resources and make it difficult to produce goods and trade. |
Social factors
Discrimination Some groups may have less opportunities and this can hold back overall development, eg if women are not educated to the same standard as men. Population Overpopulation occurs where population growth outstrips resources. |
Different sections of Employment
Primary Secondary Tertiary and Quaternary
Globalisation
Globalisation is the process by which the world is becoming interconnected as a result of trade and cultural exchange.
Globalisation has resulted in:
Globalisation has resulted in:
- increased international trade
- a company operating in more than one country
- greater dependence on the global economy
- freer movement of capital, goods, and services
- recognition of companies such as McDonalds and Starbucks in LEDCs
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Is Globalisation good or bad?
You will be divided up into groups [For or Against Globalisation].
Task:
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Case Study:
Nike - a transnational corporation
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Nike
Nike, the world’s largest maker of athletic shoes, does not make any clothes or shoes itself. It contracts out production to South Korean and Taiwanese companies. These companies operate not only in their home countries but also in lower wage economies such as the Philippines and Vietnam. Nike’s expertise is in design, development, marketing and sales. In 2001 Nike’s total sales were $9.5 billion with profits of $590 million (6.2% of sales). Phil Knight, co-founder and chief executive, is the public face of the company. Figure 6 is a profile of Knight’s role in the development of the company. The figures supplied by Nike for its cost/price chain are as follows:
• Contractors are paid an average of $18 a shoe by Nike. This is made up of $11 for materials, $2 for labour, $4 for other costs, and $1 for profit.
• Nike sells the shoes to retailers for $36. The mark up of 100% accounts for the costs of design, research and development, marketing, advertising, shipping, production management, other sales and business costs, taxes and of course a profit.
• Retailers mark up another 100% to $72 (on average) to cover wages, shrinkage, insurance, advertising, supplies and services, depreciation, taxes and profit.
Nike currently produces its products in more than 800 contract factories, employing more than 600,000 people, in more than 50 countries throughout the world, including the United States. In mid-2003 Nike paid $305 million to acquire retro shoemaker Converse. Most large transnationals grow by acquiring other businesses as well as generating their own growth.
Nike, the world’s largest maker of athletic shoes, does not make any clothes or shoes itself. It contracts out production to South Korean and Taiwanese companies. These companies operate not only in their home countries but also in lower wage economies such as the Philippines and Vietnam. Nike’s expertise is in design, development, marketing and sales. In 2001 Nike’s total sales were $9.5 billion with profits of $590 million (6.2% of sales). Phil Knight, co-founder and chief executive, is the public face of the company. Figure 6 is a profile of Knight’s role in the development of the company. The figures supplied by Nike for its cost/price chain are as follows:
• Contractors are paid an average of $18 a shoe by Nike. This is made up of $11 for materials, $2 for labour, $4 for other costs, and $1 for profit.
• Nike sells the shoes to retailers for $36. The mark up of 100% accounts for the costs of design, research and development, marketing, advertising, shipping, production management, other sales and business costs, taxes and of course a profit.
• Retailers mark up another 100% to $72 (on average) to cover wages, shrinkage, insurance, advertising, supplies and services, depreciation, taxes and profit.
Nike currently produces its products in more than 800 contract factories, employing more than 600,000 people, in more than 50 countries throughout the world, including the United States. In mid-2003 Nike paid $305 million to acquire retro shoemaker Converse. Most large transnationals grow by acquiring other businesses as well as generating their own growth.
| nike_case_study.pdf |
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