In the past, Britain was called a country where the sun never sets, as it occupied nearly a quarter of the world's land. At that time, British territories existed on almost every continent, so in any part of the world, there was always a region of Britain where the sun was shining. This nickname was given because of that. That's how powerful Britain was in the past. However, can you believe that a country that once conquered the world is now facing a situation where its citizens are struggling to make ends meet on the streets due to the economic decline? Even the real wages of British workers have hardly increased in 15 years. It is said that even the main industries that Britain boasted of are collapsing one by one. So, in this session, let's take a very easy and simple look at why the economy of Britain, which was once the world's leading superpower, has crumbled like this.

The biggest reason considered to have enabled the dominance as the world's superpower was the Industrial Revolution. This Industrial Revolution is known to have first started in the late 18th to early 19th century in England. At that time, England completed conditions that could dominate the world and continents, such as steam engines and an extensive railway network. As a result, England gained military superiority in the world. Furthermore, the Industrial Revolution also brought economic advantages to England. Based on an excellent transportation network, products produced domestically in England were exported worldwide. Consequently, England naturally established its dominance in international trade and the economy. It is not an exaggeration to say that the Industrial Revolution made England the top superpower in the world both militarily and economically. In this way, England became untouchable globally.

They formed their own empire, but the resurgence of the once mighty Britain did not last long. It was cut short by the two World Wars that took place in the early and mid-1900s. Both World War I and World War II saw Britain as a major participant. Even experiencing one war can exhaust a country, but Britain, facing such wars twice in a short period, suffered immensely. It's no wonder the country was in a terrible state. Going through two wars, Britain incurred tremendous losses economically, militarily, and politically. Furthermore, during the wars, Britain borrowed massive funds from the United States to finance the war efforts. This placed a huge burden on post-war Britain as it began the daunting task of reconstruction. Nevertheless, despite all this, Britain slowly started rebuilding the nation.

We need to quickly restore the economy to repay the U.S.'s debts and improve the lives of the people. That's why, in the 1970s, the UK began to bring about significant changes in the national industry, such as transitioning from the traditional manufacturing-based economy to a service-oriented economy. Initially, all these changes were successful. The UK economy started to grow rapidly, and all indicators showed prosperity. As you can see from the chart in the video, in the 1970s, the UK's growth was so significant that it competed with the U.S., France, and Germany, which were experiencing rapid growth at the time. However, while the UK was caught up in the growth of the service industry, there was a factor that weakened it. That is, industries such as manufacturing, heavy industry, and mining, which supported the traditional UK economy, declined as they were overshadowed by the service industry.

Even though it used to be an industry that provided the most jobs in the UK, various factors such as the shift to the service industry by the UK government and the lack of manufacturing competitiveness in the international community led to a change in the situation. As a result, many jobs disappeared in the UK, leading to income inequality among the citizens and becoming a social issue. Income inequality, in simple terms, means that the income gap between the wealthy and the poor has widened. At that time, the income of people working in service industries such as finance and insurance, which the UK government was pushing, gradually increased, while the income of those working in manufacturing and mining decreased or they lost their jobs altogether. And in the 2000s, the problems of this UK economic model became most apparent.

One event that occurred was the global financial crisis in 2008. Experts gather that this financial crisis revealed the excessive dependence on the service industry in the UK, the stagnation of traditional industries, and the prevalent income inequality in British society. Just by looking at the Gini coefficient in the UK during this period, this issue becomes evident. Generally, the Gini coefficient is a statistical indicator used to measure income inequality. The higher the value, the more severe the income inequality. Looking at the UK's chart, you can see that the Gini coefficient, which had been steadily increasing since the shift to the service industry in the 1970s, reached its peak during the 2008 financial crisis and has maintained a high level since then. Consequently, during this period, the UK saw an overflow of individuals who, except for high-income earners in specific service industries, could not even earn the minimum living expenses.

It started, then. If that's the case, the British economy improved a bit after the 2008 financial crisis. Unfortunately, that was not the case at all. Another serious issue arose, and that is the problem of labor productivity. Labor productivity is simply an indicator of how efficiently labor is performing work. Labor productivity is considered very important in the economy because when labor productivity increases, more products or services can be produced in the same amount of time. This can lead to increased profits for businesses and overall economic growth. However, the significant labor productivity of the UK economy started to decline sharply since the 2008 financial crisis. Experts are pointing out various reasons for this, with a lack of investment for productivity improvement being the first mentioned. Typically, to increase productivity, old equipment needs to be replaced.

Investment in research and development, such as developing innovative technologies, should take precedence. However, the UK has been very stingy in such investments. As you can see from the chart in the video, compared to France, Germany, and the USA, the UK's investment in research and development is significantly lacking. This places the UK among the lowest in OECD countries. The long-standing issue of insufficient investment has led to inefficiency and a lack of innovation throughout the UK economy. This is identified as a major cause of the UK's low productivity. Moreover, the problem does not stop there. The low educational participation rate of UK students is also identified as a factor hindering labor productivity growth. According to recent research, the percentage of students over 18 years old in the UK who enroll in higher education institutions such as universities is only about 38% as of 2021. Among ten students graduating from high school,

It can be seen that only about three to four people go on to university from a group of ten. In contrast, in France, this ratio exceeds about 60%. Also, in the United States, it is around 61%. Looking at this, the rate of progression to higher education institutions in the UK is significantly lower compared to other countries. The difference in participation rates in higher education can lead to differences in labor productivity. As society progresses, there is an increasing need for jobs that require advanced skills based on modern knowledge, rather than just manual labor. Furthermore, as the number of jobs requiring advanced skills increases, labor productivity can only increase. Considering these points, it can be said that the insufficient participation rate in higher education in the UK acts as a major factor hindering the increase in labor productivity in the UK. In this way, since the financial crisis, the UK has been facing income inequality and

Struggling with low productivity issues, we went through a difficult time. In 2016, one of the most important events in 21st century Britain, a national referendum that shook the British economy to its core, was held. It was a vote to decide the UK's withdrawal from the European Union. The UK aimed to regain control over its economic policies, address issues such as immigration on its own, and viewed leaving the EU as a potential solution to boost the economy and solve productivity problems. The referendum resulted in a very narrow margin of about 52% in favor of the EU withdrawal. We considered this as a positive outcome post-Brexit, as it allowed us to independently establish laws and regulations without EU interference, leading to comprehensive and gradual changes.

The UK has independently concluded trade agreements such as the Economic Partnership Agreement. However, when looking at the UK's economy, it may not have been a wise choice. According to a 2023 media survey, as many as two-thirds of the British public answered that Brexit actually damaged the economy. This indicates that the economic situation felt by the citizens has become tougher. Experts claim that after Brexit, the UK's trade openness has significantly decreased. Trade openness is an indicator of how freely a country can trade with other countries, as you can see in the video. After Brexit, you can see a sharp decline in openness. However, the reason for this decrease in openness is that after leaving the European Union, the UK has faced restrictions on the free movement of goods and services or what used to be.

If it had been the same, customs clearance would have been very fast, and trade could have been done with almost no tariffs. Now, everything has slowed down and become more expensive. Even within Europe, trade barriers have increased, making it difficult for British companies to access the EU market. This has directly impacted major industries in the UK. The first hit was the automotive industry, which the UK prides itself on. Before Brexit, the production volume reached up to 1.7 million units per year, but after Brexit, it dropped to around 770,000 units per year. In just a few years, the production volume plummeted. This is partly due to the suddenly increased trade barriers, which led to higher tariff standards than before. Additionally, due to the nature of the automotive industry, which requires many components, it has no choice but to rely on a global supply chain.

If there isn't any, however, due to Brexit, the efficiency of car production has greatly decreased as parts movement is delayed or becomes unreliable. In addition, other industries such as fisheries and manufacturing have also been heavily impacted. Since Brexit, seafood exports from the UK have decreased by a staggering 83%, and overall manufacturing output in the UK continues to decline. Brexit is negatively affecting various industries across the UK, impacting the income of British citizens and making their lives even more difficult. As the national economy is in turmoil and people are facing tough situations, it is being suggested that rallying around the country's leaders could help improve the situation. However, even that seems challenging in the current circumstances in the UK. Recently,

In the UK, the Prime Minister, who is the leader, is not often seen. As you can see in the video materials, in the past five years, the UK has experienced an unprecedented event in modern Western democracy, with four Prime Ministers being replaced. In 2022 alone, you could see a total of three Prime Ministers. Among them, perhaps the most striking term in the UK economy was probably under Liz Truss. She took office in September 2022 and implemented policies characterized by large-scale tax cuts and borrowing. However, this led to a major turmoil in the financial markets, causing a sharp decline in the value of the pound against the dollar, hitting a record low in 37 years. Feeling responsible for this market turmoil, Prime Minister Liz Truss ultimately resigned just six weeks after taking office, leaving the shortest term as Prime Minister in UK history. Up to now

The UK, which once ruled the world, has been crumbling endlessly. We briefly examined the process and causes of this. In fact, in addition to the causes we looked at today, various factors such as the UK's tax issues, minimum wage issues, and income disparities between regions are hindering the economic development of the UK. However, under the current Prime Minister, Rishi Sunak, efforts are being made for industrial development, such as attracting global investments and investing in cutting-edge technologies like AI. We will have to wait and see whether the UK's economy will continue to crumble like this or if it can recover. That's it for today. Thank you for your attention.

"이제 인도보다 못 산다?"..잘 나가던 영국 경제가 한 없이 추락하고 있는 이유 ㄷㄷ

"이제 인도보다 못 산다?"..잘 나가던 영국 경제가 한 없이 추락하고 있는 이유 ㄷㄷ

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