Economic Resilience and Variations

Introduction/ Overview

In assessment 1, the focus was based on in depth assessment of role technology plays on people and economic developments. It carried an in depth assessment of ways climate-change risk on economic and the outbreak of COVID-19 pandemic on economic. As noted, economic performance is linked and influenced by such variables as gross domestic products (GDP), GDP per capita, economic system, employment and unemployment rate, growth rate, inflation, pollution and demographic, monetary policies, and market demands and supply. Globally, the pandemic is reported to have caused direct effect to income, employment, retrenchment, disruptions of supply chain and distributions channels, bring to stop productions and manufacturing of goods in most countries, and reducing productivity, and contraction of the economy. While the assessment 1 focused on exploring ways technology, climate changes, and COVID 19 pandemic have influenced the UK economy, in this second assessment, it conduct a cross country economic comparison of the UK and South Korea.

Task 1:

Cross Country comparison –UK vs South Korea

Economics involves making decisions towards fulfilling unlimited desires based on scarcity of resources. In a given situation, resources do not meet the limited desires of the people. This mismatch is a result of scarcity of resources. Compared to the UK’s population (66.8 million in 2021), South Korea recorded was 51.7 million in 2020. The population growth of the two countries is 0.561 for the UK and 0.198 for South Korea.

South Korea reported it first corona virus on January 20, 2020 then followed by small confirmed cases later related to gathering by Shincheonji religious group. The South Korean Government set in place a string measures to contain the pandemic resulting in dropping of new cases and stabilising of the epidemic (Chen et al., 2021). By May 2020, the government had relaxed the restrictions and measures that include lockdowns, curfews, and restricted movements. Additionally, the government put in place fiscal policy and recovery measures that include supporting SME (pumping 1.2 billion Euros) as emergency fund, guarantee on loans and insurance, simplification of procurement process, and plan to shift into digital economy (Digital New Deal).

Real GDP growth rate

Following the outbreak of the pandemic, the UK GDP dropped by -9.92% (2020) while South Korea felt by -0.96% (2021)

Task 2:

In the past 5 years, the median income has had a growth rate of 2.2% but most driven by those in 5th percentile (top). The poorest in the UK recorded a drop by 1.6% over the same period. Those in bottom 20% had an average disposable income of £12,798 while those in 5th percentile had £69,126. In contrast, South Korea had $21,882 disposable income per capita in 2021 Q1. The difference in disposable income for the lowest percentile p10 and p90 has remained high, increasing over time.

Income inequality comparison –UK and South Korea

Poverty rate:

In 2019, South Korea poverty rate was 17.4% while UK was 11.7%. The difference between the haves and have-nots in Korea has continued over the years.

Causes and economic consequences of poverty in the countries

Expected likely impact of inequality and poverty

Poverty and inequality has affected the educational attainment, risk of unemployment, purchasing power, increased childhood poverty, alcohol and drug dependence, and room sharing ‘parasite living’ with family members.

Task 3:

Technological Progress: UK vs South Korea

Following the COVID-19 pandemic outbreak, the South Korean GDP fell by 1.3% and 3.3% in Q1 and Q2 of 2020. This caused decline in the employment rate, and disrupting the accommodation and hoteling, food, wholesale and retail trade industries. South Korea deployed extensively contact tracing (AI technology) (perhaps, most elaborate contact tracing in the world)- enabling quick testing and response time- of the corona virus. Quick response in developing testing kits, implementation of smart quarantine information system, mobile phone tracing, AI diagnostic efficiency and patient classification, and mobile app information sharing

Three-step protocol- Test, Trace, and Isolate – result was low COVID-19 per capita

Enabled digital economy

In contrast, the UK did not institute contact tracing

Vaccine development

Technological adoption measured based Real GDP per capita

Digital economy

Dig deeper into Demographic Factors And Economic Growth with our selection of articles.

Remote working – employees moved from traditional working environment to working from home. This was supported by proper technological infrastructure. The UK government is set to invest £232 billion towards digital economy as a recovery measures following the pandemic. Technology is set to lift GDPP by 4.4%

UK leads South Korea in medical research and innovation but Korea is ahead in AI, big data, robotics, 3D printing and Internet of Things- social media integration- core elements in digital economy

Structural readiness index:

Several factors affect deployment of technology process of a country, that include: ICT deployment, expertise, R&D activity, industry activity, and financing

Readiness towards use, adoption, and adaptation of technologies in selected countries

Based on the five indices, the UK is ranked higher (3rd globally) than South Korea (7th globally) in overall ranking but South Korea leads in ICT and skills ranking while UK take lead in R&D, industry, and financing of technology process.

Task 4:

Ways Climate change will affect UK vs South Korea

The cause of global warming has been attributed largely to industrial and automobile gas emissions. The effects of this change in climate is a rise in average temperature, change in weather and climate pattern, rising sea levels, reduced agricultural yield, and melting glaciers. The UK has seen changed frequency of rainfall, change in climate pattern (winter and summer period is changing), and heat waves. Similarly, Korea has experienced an increased fluctuation in temperature, precipitation, and wind speed throughout the four seasons. These have affected agricultural yield, productivity, people’s health, quality of life, and energy generation as well as diverted resources to curb the climate change. During lock in the UK, the greenhouse gases was reported to have dropped sharply. In South Korean context, the government has set up emissions trading systems and fuel economy standards aimed at curtailing the emissions. The policies are reported to reduce the Korean GDP by $21.5 billion (1.0%) and consumer welfare by $8.1 billion in cost by 2030. Although some view the benefit in the long term measured such factors as health, quality of life, and climate change would outweigh the cost

Conclusion:

The UK and South Korea are both developed countries. The economic indicators such as GDP (per capita), population growth rate, corruption index, and unemployment rate vary slightly. However, the impact of the COVID-19 pandemic on the two economies differed widely. Unemployment and GDP growth rate of the UK was significantly affected by the pandemic compared to those in South Korea. These is largely due to the pandemic handling process supported by technology and planning.

References

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