Growing Economies (Edexcel A Level Business)
Revision Note
Written by: Jennifer Aryiku
Reviewed by: Steve Vorster
UK Growth Compared with Emerging Economies
The growth rate of a country is measured by the annual change in its gross domestic product (GDP)
Emerging economies are economies that have increasing growth rates but relatively low income per head (per capita)
E.g. India, China and Brazil are considered to be emerging economies
UK growth tends to be lower than emerging economies
A key factor why emerging economies are growing at a faster rate than the UK economy is because of the growth of the manufacturing sector
The UK economy has seen a decline in the manufacturing sector as businesses choose to manufacture in emerging economies due to lower labour costs and access to raw materials
China is the world’s largest manufacturing economy and exporter of goods
The growth rate of China from 2002 to 2021 peaked at around 14%
Source: Macrotrends
The growth rate of the UK from 2002 to 2021 peaked at around 4%
Source: Macrotrends
A comparison of the two charts above quickly reveals that the growth rate of China is consistently higher than that of the UK
The UK growth rate peaks at around 4% in 2000 whereas China peaks at around 14% in 2007
Examiner Tips and Tricks
In Paper 1, Extract A-D may include graphs with economic data such as GDP figures which you may be required to interpret and explain trends over a period of time. Make sure you read the titles and labels of the axis to be clear about what the information is showing
Emerging Economic Power in the Developing World
Globalisation is the economic integration of different countries through increasing freedoms in the cross-border movement of people, goods/services, technology & finance
The past twenty years has been characterised by rapid globalisation and the growing economic power of less economically developed countries
The integration of global economies has impacted national cultures, spread ideas, and speeded up industrialisation in developing nations
Emerging economic powers of countries within Asia, Africa and other parts of the world include
BRICS: Brazil, Russia, India, China and South Africa
MINT: Mexico, Indonesia, Nigeria and Turkey
Emerging economies have a growing middle class with increasing incomes which allows their citizens to spend more on domestic goods and imported goods from abroad
This increases the profitability of international firms who sell their goods and services in these emerging economies
The Implications of Economic Growth
Economic growth helps to generate income in a country and there are numerous implications for businesses and individuals within it
The Impact of Economic Growth on Businesses and Individuals
Impacts on Businesses | Impacts on Individuals |
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Indicators of Growth
There are four key indicators used to assess the economic growth of emerging economies
Businesses will consider these indicators when deciding which markets to invest in for future expansion
Indicators of Economic Growth within an economy
Indicator of Growth | Explanation |
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GDP Per Capita |
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Health |
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Literacy |
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Human Development Index |
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Examiner Tips and Tricks
In Paper 1, you should be able to assess information given in extract A-D. Questions that use the command word ‘assess’ require you to outline the advantages and disadvantages of the indicators. Make sure your apply your assessment to the context of the business within the extract
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