Who wants to be a billionaire?
What do billionaires do?
The focus of this lesson from the outset is on the importance of the consumption of goods and services in the creation of wealth and an introduction to the sectors of industry – primary, secondary, tertiary and quaternary.
Key questions:
- What makes a billionaire business?
- What kinds of work to they do?
- Where does Britain’s wealth come from?
Key concepts:
Human Processes
Monetary wealth comes from the production and use of resources. Resources are things that we use that satisfy wants and needs of people. Therefore, those people and nations who have large amounts of resources, and can develop them and sell them tend to be those who become richer. Resources include things like minerals, water, good soil, land and climate (called physical resources), skills, labour and entrepreneurship (called human resources) and the equipment, processes and factories to use the resources (called capital resources). All of these resources can be used to generate wealth.
What makes a billionaire business?
The billionaires of the world have become wealthy by using and developing resources, and by satisfying needs and wants of a population. Many of them have set up businesses or corporations which employ thousands of people and sell goods or services to millions of people.
What kinds of work do they do?
Their businesses develop resources and satisfy needs within four main sections of the economy:
- The primary sector deals with farming, fishing, forestry and mining.
- The secondary sector processes materials and manufactures goods
- The tertiary sector transports and sells goods and services, including both wholesale and retail selling, teaching and health care.
- The quaternary sector deals with information and hi-tech research. It includes developing new medicines or mobile phones, software and information networks
Goods, services and money flow constantly between these sectors and large corporations operate both within and across sectors.
Where does Britain’s wealth come from?
There are lots of ways a country can generate wealth. In very general terms, countries in the Middle East sell oil because they have abundant reserves of it. Thailand [link to Lesson 1 in Thailand module] promotes itself to (mainly) foreign tourists because it has a good climate and a varied physical and cultural landscape that appeals to a wide range of people. 100 years ago Britain made money from coal and making things in heavy industries like shipbuilding. Britain used make things for the world (like Japan and more recently China) but now UK is selling services to the global super-rich – the billionaires that feature in this module - as well as those on more modest incomes like me and you. The service sector is the dominant sector of the UK economy. This means that the Tertiary sector jobs outnumber the Primary, Secondary and Quaternary sector jobs.
The UK service sector makes up about 73% of GDP and is mainly dominated by financial services, especially banking and insurance. Tourism is very important to the UK accounting for 3.5% of the economy and worth £85 billion in 2005 with International tourists spending £17 billion and UK residents spending £67 billion. Manufacturing has been in steady decline since 1960s, although this sector is still important for overseas trade. The manufacture of pharmaceuticals is important to the UK also. Primary industries such as farming and mining are less important sources of wealth, especially agriculture which accounts for only 1% of GDP. Primary energy production is still important however as Britain still has natural gas and oil reserves although they are diminishing.
Click on an activity:
Starter
Main activity
Plenary
Interactives:
Brand billionaire or mere millionaire?
Downloads:
Links:
The Forbes website: www.forbes.com (Select LISTS and then BILLIONAIRES)- Gross Domestic Product (GDP) is the most commonly used indicator of national income. It attempts to measure the sum of incomes received by the various sectors of the economy: manufacturing, agriculture, service industries.
- When the income from abroad is included - what domestic companies earn abroad minus what foreign companies earn here and expatriate - then the GDP becomes the Gross National Product (GNP).
- A crude measure of a country's wealth is Gross Domestic Product (GNP) per capita: the figure for GNP divided by the population.
- In order to compare GDP per capita across countries there is the need to use a common currency. Most international institutions like the World Bank use the US dollar for this purpose.this may give a misleading picture of how much an individual in a particular country can actually purchase in his own currency.
- Purchasing Power Parity (PPP) tracks the cost of a basket of traded and non-traded goods and services across countries. This gives a better indication of the purchasing power of an economy and consequently its relative wealth.