Why Are Some Countries Rich While Others Are Poor?

Understanding Economic Development and Industrialization

• The level of a country's development often indicates its level of industrialization.
• Economic development relates to a country's relative wealth.
• Industrialization is a key factor in determining whether a country is rich or poor.

Five Economic Sectors

1. Primary Sector

• Focuses on the extraction of raw materials (e.g., mining, farming, logging).
• Characterizes less developed countries (e.g., Ethiopia).

2. Secondary Sector

• Involves processing raw materials from the primary sector.
• Engages in manufacturing (e.g., timber processing into lumber).

3. Tertiary Sector

• Provides services rather than tangible goods.
• Includes teaching, legal services, entertainment, etc.

4. Quaternary Sector

• Similar to tertiary, but requires higher education and expertise.
• Involves research and development, high-tech industries.

5. Quinary Sector

• Includes top government officials, CEOs.
• Influential at a global level.

Development Stages and Economic Sectors

• Countries move from primary to quinary sectors as they industrialize.
• Primary and secondary sectors often found in former colonies (e.g., Sub-Saharan Africa).
• Tertiary to quinary sectors are in former colonizing industrialized nations.

Economic Models and Factors

Least Cost Theory

• Developed by Alfred Weber to predict factory locations based on cost efficiency.
• Factors include:
  • Transportation costs (distance and weight)
  • Fragility of goods

Additional Factors

• Access to energy
• Access to materials and break-of-bulk points
• Transportation innovations such as containerization

Core, Periphery, and Semi-Periphery

Core Countries

• Have high levels of economic development.
• Economies include tertiary, quaternary, and quinary sectors.

Peripheral Countries

• Least developed, dominated by primary sector work.
• Result of historical industrial power dynamics.

Semi-Peripheral Countries

• Mix of core and peripheral characteristics.
• Includes countries like Mexico and India.

Key Takeaways

• Economic development is heavily influenced by industrialization levels.
• The distribution of economic activity is uneven globally due to historical, geographical, and industrial factors.
• The global economy's restructuring has resulted in economic hierarchies: core, semi-periphery, and periphery.