Impacts of Structural Change Key Idea 3.b: Processes of economic change can create opportunities for some while creating and exacerbating social inequality for others. Learning Objectives: To assess how booms and recessions (cyclical economic change) impact on people and places.

How Booms and Recessions impact on People and Places The economic health of a place is rarely static. Over time places grow and decline e.g. Toxteth/Birmingham This obviously impacts on social opportunities and inequalities. Within a country, because different types of economic activities are not distributed evenly in space, booms and recessions will impact different places in different ways. How would you define an economic “boom” and “recession”? Boom = inward investment; employment; new employment opportunities; new infrastructure; household incomes and business profits rise. Recession = period of decline; unemployment rises; little investment; slow down in economic activities; household incomes fall; business profits decline; inflation falls

How Booms and Recessions impact on People and Places Read page 165 & 166 and figure 5.22 to explain in your own words Kondratieff’s concept of “interconnected cycles” or “waves of innovation”. Duration of each cycle? What explains these cycles? Outline the 6 waves of innovation and the technological innovation linked with each wave. Why don’t all areas experience the same impacts? Core & periphery? Why do some people cope better with recessions? What do people tend to do during a recession?

How Booms and Recessions impact on People and Places Silicon Valley Read page 166 and figure 5.23 to answer the questions below: Where is it? What is this area famous for? Name some industries located there? How would you describe these industries? Why has this area developed a reputation for “high tech” industries? What are its “comparative advantages”? Why has not everyone in this area benefitted equally? Describe and explain the social and spatial inequality that exists here.

How Booms and Recessions impact on People and Places Exam Question: Outline the reasons why some places benefit from booms while others suffer from recessions. Basically because economic activities are not distributed evenly over space. New industries provide the basis for a boom so these areas see “booms” – they are called “core” areas/regions where the positive multiplier is strong; investment spending is high; employment opportunities, household incomes, business profits all rise etc leading to a higher SoL. These core areas benefit because education, government and social organisations have all encouraged and embraced enterprise and economic change and so are able to support technological innovation while other areas do not Support with named examples – Birmingham Research Park; Silicon Valley; Bangalore (India). These places have exploited the “comparative advantages” on offer. On the other hand, some “peripheral” areas do not experience the same benefits e.g. Toxteth has not benefited from the “knowledge economy”.

How Booms and Recessions impact on People and Places Exam Question: Outline the reasons why some places benefit from booms while others suffer from recessions. Furthermore, some areas are more likely to suffer in a recession – these would be the “peripheral” areas where the main issue was recruitment in the new “knowledge economy”. This is because many applicants for these type of jobs lack the necessary technical or job-specific skills. Many of the residents of Toxteth still today do not possess the skills and qualifications which would allow them to access the service and knowledge economy of Liverpool. Hence, old industrial areas like Toxteth are more likely to suffer during a recession where people are less skilled and comparative advantages are absent.