Industrialization and the service economy

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• Industrialization and the service economy

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Middle Age mercantilism

• Guild control of manufacturing
• Apprentices
• Grand Masters
• Mercantilism
• Centers for specific goods in key locations

• Hanseatic League

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Guilds and cottages

• Guilds controlled urban areas
• Cottage industry in rural locations

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Industrial revolution (UK)

• Machines working on water power 1730
• Steam Engine 1760s
• Coal used widely by 1790s
• Britain produces 70 of worlds cotton textiles -
  1830

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Spread of industrial revolution

• Especially concentrated near coal beds until
  transportation became easier
• Ruhr valley Germany

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Spread beyond coal fields

• Transport by train and boat
• Rise of seaside industrial port
• Rise of hydropower
• Industrial revolution reaches peripheral areas
  such as Sweden/Finland
• 90 of worlds manufacturing in Europe by 1900

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Implications

• Colonialism
• Transformation from slave labor or specialized
  goods to resource provider

Berlin conference (1884)
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Implications

• Urbanization
• Employment patterns
• Much greater emphasis on secondary sector, esp.
  lower-skilled workers
• Exploitation of workers? (Marxism)
• Environmental degradation

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Environmental degradation

• Air pollution
• Oil/chemical spills
• Radioactivity
• Deoxygenation of seas
• Acid rain
• Chernobyl (1986)

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Deindustrialization

• Manufacturing employment fell by 50-60 mining
  by up to 90
• Factors
• Shift to oil/gas
• Exhaustion of resources
• Loss of colonies
• Asian development
• Economies of scale

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Rail lines

• Diffusion from 1820s in England to near
  continent-wide by 1875
• High speed rails TGV, ICE

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E-road network
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European economy

• EUs GDP that of USA
• Significant east-west divide
• Unemployment slightly greater than US (9)

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• Industrialized economies
• Transitional economies
• Newly industrializing economies
• Less industrialized economies

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Minimum monthly wages (2009)

• Luxembourg 1650
• France 1321
• Netherlands 1335
• Spain 624
• Turkey 300
• Slovakia 269
• Romania 150
• Montenegro 55

• Disparity evens out with cost of living to some
  extent
• Fed. Of European Employers

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Employment across different sectors
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Major economic centers

• European core stretching from London to Milan

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Tertiary and quaternary employment

• Tertiary employment
• 19 of Irish employed in construction (2007)
• State employment up near 30 (Scandinavia) up to
  38 of GDP spent on social services (19 in US)
• Quaternary employment
• Information sector
• Specialist services

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Spain and the housing collapse

• 30 of under-25s in Spain unemployed

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Tourism

• Beach resorts
• Lowland to highland
• Cultural tourism
• Rural environment

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Tourism destinations
ltlt Absolute Net vv

• Telegraph (UK)

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Industrial rebirth

• North Sea / Russian oil
• Scandinavian/ Russian forest
• High-tech
• Computers, pharmaceuticals, chemicals
• High RD budgets
• Luxury items
• East-west divide

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Unemployment

• Virtually zero in former Communist states
• Transition led to very high unemployment
• Significant gray market exists, especially in
  eastern Europe

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Unemployment
Eurostat
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Terms of employment

• Minimum wage
• Working time directive (48 h/7d, 11h rest/day)
• Labor laws on hiring / firing

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Fixed-term contract

• 40 are 6 months or less
• 30 of people under 30 are fixed-term

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Education level

• Eurostat percentage

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(No Transcript)
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Female labor participation
Vlasblom and Schippers (2004)
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Inactivity rates
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Inactivity rates

• Women less likely to work with kids in household
  men more likely

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Inactivity rates
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Gender pay equity

• Discrepancy in pay rates (), 2004
• Eurostat