Understanding global winners and losers

Economic globalisation creates uneven outcomes across the world, with some countries benefiting from industrial growth while others face declines. Developing countries often gain new industries and jobs through processes like the global shift, where manufacturing moves from higher-cost to lower-cost locations. However, this can lead to significant social and environmental challenges. In contrast, developed countries may lose traditional industries, resulting in economic and social difficulties. This disparity highlights how global economic changes produce 'winners' that experience growth and 'losers' that suffer from decline.

Social and environmental problems in developing countries

Land degradation

Increasing demand for industrial and urban space leads to deforestation and a loss of productive land, contributing to land degradation. In agricultural areas, intensive farming practices can accelerate erosion, potentially leading to desertification, which is the process where fertile land becomes desert-like and unproductive.

Over-exploitation of resources

Growing industries demand high volumes of resources, such as minerals, energy, and water, leading to their over-exploitation and unsustainable use. For example, China now sources minerals and energy from African nations for new supplies.

Loss of biodiversity

Industrial expansion destroys natural habitats, leading to the loss of species and biodiversity. Water pollution also contributes to species loss as pollutants enter and disrupt food chains.

Urbanisation and its pressures

Urbanisation is the growth in the proportion of people living in urban areas, often driven by rural-to-urban migration. This rapid urbanisation puts pressure on city infrastructure and resources. Limited housing can lead to the development of unplanned settlements, also known as shanty towns or slums. For instance, in Dharavi, Mumbai, informal housing has emerged due to industrial opportunities.

Pollution challenges

Developing countries may experience high levels of air and water pollution, partly due to lax environmental regulations which attract companies prioritising profits.

Types of pollution:

• Air pollution - Arises from factory emissions of particulates, which can exceed safe levels. For example, in Guangzhou, China, factory particulates frequently push air pollution above healthy thresholds.
• Water pollution - Occurs when industrial wastewater contaminates rivers and lakes. In 2008, about 33% of China's Yellow River was considered unfit for drinking due to industrial chemical pollution.

Challenges in developed countries from deindustrialisation

Deindustrialisation is the closure of manufacturing industries, often due to automation and increased competition from overseas. This process means developed countries may face significant challenges from the global shift.

Unemployment and depopulation

When factories close, high levels of unemployment follow. This prompts people to migrate elsewhere for employment, causing depopulation. As fewer people remain, demand for housing drops, lowering property values and attracting lower-income groups with reduced economic potential. This creates a spiral of decline, where unemployment persists because local workers' skills do not match new industry requirements.

Increased crime and social issues

Deindustrialised areas often see rises in crime, drug use, and anti-social behaviour.

Dereliction and land contamination

Former industrial sites are often left empty, leading to derelict buildings and parts of cities becoming an eyesore. Much of the land in these post-industrial areas may be contaminated due to poor industrial practices in the past when regulations were not as strict. For example, after the 1970s collapse of Detroit's car industry in the USA, 30% of buildings became vacant, with around 27% of residential properties still empty in 2020.