Growing Economies - Implications of economic growth for individuals and businesses - 4.1.1

Foreign Direct Investment (FDI) - The transfer of funds by a foreign business to purchase and acquire physical capital,  such as factories and machines.

TRADE OPPORTUNITIES

• Opens up new markets which increases wealth in countries such as China who want western brands
• British provenance ("the place of origin or earliest known history of something."). For example, fashion, finance, cars, arts, education etc. Additionally, BRICS countries can help with supplying materials and resources to British companies to help their provenance.
• Access to raw materials
• Greater movement of goods and services between countries
• Opportunities for cheaper production and therefore cheaper unit costs
• Greater investment opportunities such as Foreign Direct Investment (FDI)
• Increased profits for businesses. Trade opportunities will arise in new markets leading to an increase in demand and increased revenue and profit. The owners of businesses will see and increase in income e.g. through higher dividends. Businesses can use retained profits to reinvest into productive capacity e.g. new machinery. 
• As economies get wealthier, the UK will start to produce even more highly differentiated products to meet global demand. This will lead to changes in employment patterns as businesses will demand more highly skilled workers
• Access to growing economies will create business confidence benefiting the UK economy as a whole

EMPLOYMENT PATTERNS AND IMPACT ON CONSUMERS

• Increased economic growth leads to improvements in the standard of living for consumers
• Increased incomes allow people to spend more on necessities at lower levels of incomes and more on luxuries at higher levels of income, which suggest consumer confidence is being regained. 
• As real wages increase, labour can substitute work for leisure and see dramatic changes in their level of income
• At some point, they may wish to substitute leisure for work as, at higher levels of income, they satisfy their financial requirements. This will change employment patterns.
• Increased incomes allow workers more free time and the ability to retire, and enjoy the quality of their life, at an earlier age.