IGCSE, A Level Business Student Forum

16 Analyse how global competition can lead to de-industrialisation in a developed country. [3]
Hint: Competition from low-wage economies > Example: UK factories can't compete with cheaper Chinese goods > They close down, losing manufacturing jobs.

Possible Structure - 3 Marker
[KN] >> [APP] >> [AN]

[KN] Global competition can cause deindustrialisation when developed countries face rivals producing at lower costs.
[APP]For example, many UK factories struggle to compete with cheaper chinese goods forcing them to close down.
[AN] Factory closures reduce domestic manufacturing output this leads to job losses in factories which reduces incomes for workers hence lower incomes cut consumer spending(lower standards of living).

nowledge (K): Global competition means businesses in developed countries face cheaper goods from abroad, often from nations with lower labour costs.

Application (App): For example, UK textile factories closed as cheaper clothes from Asia flooded the market.

Analysis (Bouncer 1): This makes it hard for local manufacturers to compete, so factories may shut down.
Analysis (Bouncer 2): Job losses in industry then push workers to move into service sector jobs.
Analysis (Bouncer 3): Over time, this reduces the share of manufacturing in the economy, leading to de-industrialisation.

[KN] De-industrialisation happens when the manufacturing sector declines, often because cheaper imports from abroad outcompete local goods.
[APP] For example, UK factories can’t compete with low-wage economies like China, where goods are produced more cheaply.
[AN] Local factories struggle to match lower prices, so many shut down.
This leads to job losses in manufacturing, reducing employment opportunities.
Over time, the country shifts towards service industries, weakening its industrial base.

To stay comptitive many companies might move to areas of low labor and production cost for example some british company might close local factories and move to bangladesh where there is cheaper labor, reducing manufacturing cost, which would be reinvested the business to expand more and produce more furthermore ths causes deindustrilization in the home country, meaning economy would shift to tertiary sector like marketing and financial service. Allowing them to remain competitive in the gobal market

KN: Global competition means businesses from different countries selling similar products.
AP: For instance, goods made in developing countries are often cheaper than those made in developed countries.
AN: This makes it hard for local factories in developed countries to compete, so some close down, causing fewer manufacturing jobs and leading to deindustrialisation.

[kn] it may lead to de industrialisation due to the competition from low wage economies
[app] for example the uk factories cannot compete with the cheaper priced chinese goods
[an] this would lead to businesses in the uk shutting down loosing jobs and the economy facing high levels of unemployment

[KN] Global competition can lead to de-industrialisation in a developed country because cheaper imports from low-cost nations make local manufacturing less competitive. [APP] Domestic firms may close factories as they cannot match lower wages and production costs abroad. [AN] This results in job losses in the secondary sector and a shift of workers into services. Over time, the economy becomes more dependent on the tertiary sector while manufacturing declines.

[KN] Global competition means businesses in developed countries face rivals from nations with lower production costs.

[APP] For example, steel producers in the UK struggle to compete with cheaper steel imported from China.

[AN] This can force factories to shut down, leading to job losses and a decline in the secondary sector — causing de-industrialisation in developed countries.

[KN] High competition from lower-wage economies can lead to de-industrialization.
[APP] For example, UK industries struggle to compete with cheaper goods exported from Pakistan, leading to higher production costs and prices. This results in reduced sales and factory closures.
[AN] This results in increased unemployment, particularly among lower-skilled workers, leading to lower living standards and increased financial burden on the government due to unemployment benefits.

Kn
Global competition can lead to deindustrialisation as developed countries move away from manufacturing and towards the tertiary sector
App
For example cheaper goods from countries like China reduce demand for locally manufactured products this forces many domestic factories to shut down which pushes workers to look for employment in services such as tourist guides or banking leading to a gradual shift of labour from the secondary to the tertiary sector
An
Moreover this change can make the economy more service based which increases reliance on industries like tourism for future growth

[KN]Cheaper imports from abroad.
[APP]Developing countries such as China produce goods at lower costs due to cheap labour and fewer regulations.
[AN]This can lead towards job losses in manufacturing because if factories close this means that many workers who work in steel and textile industries will lose their jobs.
[AN]This can lead towards a rise in unemployment levels hence a rise in poverty which will reduce skilled labour in the country which can lead towards a decline in the countrys GDP.

KN: Global competition can lead to deindustrialization as many countries can not compete against low wage economies.
APP: For Example a manufacturing company in the uk can not compete against chinese manufacturing companies as the wages are cheaper and faster work can be done. so many companies shift their manufacturing to china in order to reduce cost and earn more profits.
AN: this forces the local people to shift to tertiary sector as the job opportunities are available which causes a decline in domestic productions, and forces the country to rely on imports which destabilizes the economy

[KN] Because of cheaper imports, making it difficult for domestic firms to survive
[APP] For example, imported manufactured goods from low-cost economies such as China are often far cheaper than goods made domestically. This can force local manufacturers to close factories, causing job losses in the country.
[AN] Therefore, cheaper imports cause de-industrialisation by increasing the competitiveness of the economy by selling goods at lower prices, leading to high demand for those goods and less demand for domestic goods, leading to business closing operations

KN: Deindustrialisation is the decline of secondary sector
APP:for example, western clothing factories were closed because cheaper clothes were produced in asia
AN:global competition reduces demand for high cost manufacturing, leading to job losses and shifts towards service based industries in developed countries