Economic Development in a Developed Economy – France.

• France is one of the most developed economies in the world and this is shown in the following statistics:

• Population – 59 million people• Life expectancy – 79 years• Literacy rate – 99%• GNP – 26000• HDI - .92• % employment structure – Primary 4%, Secondary 23%, Tertiary

73%.• % unemployment – 11• % people living in poverty (below the threshold of €700 per

month) - 10

• But the last 2 statistics show that, like most developed economies, the average figures can hide personal and regional differences in the quality of life

• The French economy has undergone essential changes on its road to a developed economy:

• Most employed people are now working in the tertiary sector (well-paid employment) and the primary sector is the least important.

• Greater use of technology and automation has led to higher productivity in manufacturing but an overall decline in the manufacturing sector has occurred as labour intensive manufacturing industries have relocated to lower labour costing countries of the ‘south’.

• Massive investment in the social and economic infrastructure as more profits result from increase trade e.g. Health, education, transport, energy supplies.

Remember

• All these economic changes are shown in the study of the Paris Basin.

• The information on the Paris Basin should be used, where possible in this section.

The Tertiary Sector – Service Industries

• It dominates the French economy with:• Over 16 million people employed• 73% of the working population• Over 50% of the GNP• Average yearly growth of 1.5% since 1970.

Reasons for the growth of the service industry

• As economic development increased there was greater investment in health and educational services e.g. third-level graduates.

• As economic wealth increases the public administration sector grows and so the government is the largest employer in France. Government departments (environmental, finance, agriculture, transport) employ millions of people.

• Public sector services (health, education, environment) have shown a huge increase in recent years:

• 35% of all third level institutions in France are in the Paris region.

• 75% of all research, laboratory and scientific work is in this region e.g. La Villette science park in Paris.

• As average income rise, there is a greater demand for leisure and tourism services. People have more money and more time for recreational purposes.

• The tourist sector has grown enormously since 1960. Over 70 million tourists visit France each year and millions of people are employed directly and indirectly (spin-off / multiplier) activities.

• Tourism and its spin-off / multiplier effect is of great importance to the economy of the Paris Basin and attractions include:

• Louvre, Versailles, Eiffel Tower, Disneyland Resort (Marne la Vallee) etc.

http://en.wikipedia.org/wiki/File:Tour_Eiffel_Wikimedia_Commons.jpg

• As the economy improves there is a greater demand for specialised services in finance, insurance, marketing and media e.g. 800,000 people are employed in the financial sector.

• In the Paris Region banking / finance employs over 500,000 people and 90% of the headquarters of French leading companies are in Paris e.g. Credit Lyonnais, Air France.

• The transport infrastructure has to improve to meet the demands of more people with more leisure time. About 4% of the French workforce are employed in the transport sector.

• Transport networks employ about 5% of Paris’ working population.– Rail – TGV, RER, Metro– Air – 3 major airports – Road network.

• As incomes improve there is an increased demand for retailing and wholesaling services (supermarkets, car sales etc). Over 13% of employed people (nearly 3 million people) work in retail outlets throughout France.

• To meet the growing demands for space for services and to deal with the congestion in existing areas, the French government has encouraged the growth of ‘new’ commercial, retail and financial centres away from the older centres

• In Paris commercial retail and financial centres have been built at La Defense, Rungis and Bobigny. Offices and commercial developments have been built on the sites of demolished factories and commercial buildings e.g. Gare du Lyon, Montparnasse.

• The service / tertiary sector also dominates the economy in:

• The Mediterranean Region (Marseille to Nice)• French Alpine Region (tourism)• The service / tertiary sector is least important in:• Brittany• Massif Central (Peripheral Region)