Cultural factors and their influence on the Canadian and Australian domestic economy

Seminar Paper, 2011

10 Pages, Grade: 1,3


Table of Contents

1. Introduction

2. History

3. Economic Data

4. Cultural Interpretation

5. Conclusion

6. List of References

1. Introduction

Without a doubt, culture is intrinsic to every part of human life and surroundings. All associations that we make in connection with societies are based upon the country-specific culture. One of the macro factors is the business environment that is, to a great extent, shaped by the prevailing culture, e.g. history or geography.

The aim of this essay is to shed light on both the culture and the economy of Australia as well as Canada. Both countries have several aspects in common - for instance they are both typical immigration countries - but they differ widely in other aspects. Accordingly, we should find out what cultural aspects are crucial to an economy’s success. Therefore, the predominant hypothesis which informs this essay is:

I propose that Canada is economically more successful than Australia due to its culture.

In order to either falsify or confirm this thesis, I will examine different aspects with regards to economy. First, a short historical abstract of the history of Canada and Australia is given. Then I will go into the economic details. Therefore, the Gross Domestic Product as well as the Unemployment Rate should uncover economic wealth or economic decline. With these find- ings, I would like to address culture-specific factors and discuss their impact on the economy. Ultimately, this line of argumentation should lead us to a verification of the thesis.

2. History

Today both Australia and Canada are parliamentary democracies and constitutional monar- chies, whose Head of State is the British Queen Elizabeth III. The Queen is represented within the countries by a Governor General. (Sebaldt, 2009) So we see that these two countries share certain aspects, although the geographical distance between them is not insignificant. Nevertheless, their historical origins are diverse.

Before the arrival of the Europeans, the prairies of Canada were inhabited by Inuit and other Indians. It was Jacques Cartier who first claimed Canada in 1534 for France. In the beginning of the 17th century the major colonialisation of Canada took place. Soon the French discov- ered the amounts of fur in Canada and established a trade business of this highly valuable asset. Indeed, this turned to a profitable, prosperous business. After the boom for fur, other resources like codfish, wood, and gold of the sub-colony were exported. Nonetheless, the ex- pansion of France led to disputes with the British, who settled in territories along the east coast. Inevitably the European conflict turned to brutal wars on Canadian territory. These clashes were ultimately laid down in 1763 with the Treaty of Paris, which forced France to hand over nearly all of their Canadian territories to the United Kingdom. In the beginning of the 20th century the British regime relinquished their power and independence was given to Canada. (Linde & Borowski, 2009; Nicholson, 2009)

The first indigenous people that inhabited the “red continent” of Australia came over a land bridge from Indonesia at around 50,000 BC. Over time, the continent slowly drifted away from the Asian mainland and so the Aborigines were isolated on their land. Finally, in 1770 James Cook seized Australia for the British Crown under George III. In those times, the Unit- ed Kingdom was involved in the War of Independence in North America and had to suffer the loss of thirteen American territories. In order to stabilize their status as a global power and to solve the domestic problem of overcrowding prisons, they claimed Australia. Australia’s his- tory has long been shaped by racial tension and divide. In 1945 the Commonwealth of Aus- tralia became independent from the United Kingdom. This led to a cord clamping from the former occupying power. (Hagemann, 2004)

3. Economic Data

Two economic indicators - the Gross Domestic Product (GDP) and the Unemployment Rate - should shed light on the present situation of Canada’s and Australia’s economic development. The Gross Domestic Product (GDP) represents the value of goods and services that are consumed domestically and, therefore, is an indicator of a country’s wealth.

illustration not visible in this excerpt

Illustration 1: GDP over 10 Years.

Modified from (IMF - International Monetary Fund, 2011).

According to this data published by the International Monetary Fund, we see that Canada’s GDP generally is on a higher level than Australia’s. Australia’s GDP is approximately 250 Billion USD lower than Canada’s each year. As a result, we may conclude that Canada’s economy is more efficient and more profitable.

In order to judge correctly, however, we must be acquainted with the composition of the GDP. The highest individual part of Canada’s GDP is the service sector with 71.3%, which is mainly comprised of tourism, retail trade, wholesale, and infrastructure. The second largest part is the production sector with 26.4% and the third is agriculture, which accounts for just 2.3% of Canada’s GDP. (Deutsche Zentrale für Tourismus, 2012b) Australia’s economy has achieved a positive economic growth during the last few years. The major business sector that accounts for more than two-thirds of the GDP is the service sector. The production sector makes up 25% of the GDP, while agriculture is only 4%. (Deutsche Zentrale für Tourismus, 2012a)

Comparing the economic structures of the two countries, it can be determined that the GDP structures look roughly alike. So we cannot make out a specific sector as a factor of an econ- omy’s success. Nevertheless, we can emphasize the fact that Canada is regarded as a signifi- cant raw-material supplier of petroleum and gas. Here we see that entrepreneurship today - as it was in the past - is based to a great extent on the natural resources. Due to the geographic proximity to the United States, which is the greatest consumer of oil and gas worldwide, the Canadian culture is influenced by the American “way of life”. As a result, the GDP value might be due to a cultural tendency for consumption in North America.

In addition to this, the Unemployment Rate as the second economic indicator expresses the percentage of unemployed people on the basis of employed people. An illustration of the overall employment should complete the picture.


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Cultural factors and their influence on the Canadian and Australian domestic economy
English II
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The aim of this essay is to reveal cultural factors and their influence on the Canadian and Australian domestic economy. Canada and Australia were both colonies of the United Kingdom. Therefore they might share some interesting cultural aspects. Combining these aspects with the local economy, some interconnections will be disclosed.
cultural, canadian, australian
Quote paper
Barbara Katzdobler (Author), 2011, Cultural factors and their influence on the Canadian and Australian domestic economy, Munich, GRIN Verlag,


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