Impacts of Cyclical 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.

What is the difference between the two? Economic change = structural economic change OR cyclical economic change. What is the difference between the two?

Economic Change – Booms & Recessions The economic status of a place is rarely static. Times of growth (booms) and decline (recessions) result in changes to the opportunities people have and in levels of inequality. Boom = inward investment; technological innovation; employment; new employment opportunities; new infrastructure; household incomes and business profits rise. Recession = period of decline; technology no longer new: bankruptcies and unemployment rises; little investment; slow down in economic activities; household incomes fall; business profits decline; inflation falls

Economic Change – Booms & Recessions It has been claimed that the capitalist system goes through a series of interconnected cycles of economic change called the Kondratieff Cycles and represent a roughly 50-year sequence of booms and recessions. Periods of booms are associated with technological innovation and new industries and opportunities exist for people who have the skills which the new technology requires. The geography of this pattern is that technological innovation is not found everywhere. Some places attract investment and develop as centres of economic growth and rising standards of living e.g. Silicon Valley, California; SE England. These are known as “core regions” and here the multiplier effect is strong. Why some places are able to support technological innovation when others don’t is unclear, but possible reasons focus on the role of education and government. In times of recession (when the technology is no longer new and fewer opportunities exist) different people and places are impacted in different ways. The more educated generally cope more successfully than those with basic qualifications. Places with a diversifies economic base tend to retain a good level of wealth creation so that standards of living remain relatively high.

How Booms and Recessions impact on People and Places Read page 165 & 166 and figure 5.22. 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: An example of a core area/region Read page 166 and figure 5.23. Now 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.

Mumbai Read the information sheets on Mumbai and answer the questions below: Look at Figure 4.10 (page 159) and explain the difference between ‘core’ and ‘periphery’. Using page 160, outline the characteristics of both core and periphery. Locate Mumbai and explain what has stimulated the growth of Mumbai? Why is this economic growth creating problems and the development of slums? What are the positive impacts of this growth? How has Mumbai benefitted from globalisation? Mumbai is said to be a “city of contrasts”. Explain what this means. Refer to examples to support your answer. Dharavi is a squatter settlement in Mumbai. Bullet point the main issues facing Dharavi.