---
title: "Deindustrialization — AP Euro Definition & Exam Guide"
description: "Deindustrialization is Western Europe's shift from manufacturing to service economies after the postwar boom, key to AP Euro Topic 9.6 and welfare state debates."
canonical: "https://fiveable.me/ap-euro/key-terms/deindustrialization"
type: "key-term"
subject: "AP European History"
unit: "Unit 9"
---

# Deindustrialization — AP Euro Definition & Exam Guide

## Definition

Deindustrialization is the late-20th-century shift in Western European economies away from manufacturing toward service and other sectors, shrinking industrial employment. In AP Euro it marks the end of the postwar 'economic miracle' and fuels criticism of the welfare state (Topic 9.6, KC-4.2.IV).

## What It Is

Deindustrialization is what happened when Western Europe's factories stopped being the engine of its economy. After about 1970, manufacturing jobs in places like Britain's coal and steel regions, France, and West Germany declined, while service-sector work (finance, retail, tech, tourism) grew to take their place. Whole industrial regions that had boomed during the postwar '[economic miracle](/ap-euro/key-terms/economic-miracle "fv-autolink")' saw mines close, mills shut down, and unemployment climb.

In the CED, this sits inside KC-4.2.IV. The sequence matters more than the details. [Marshall Plan](/ap-euro/key-terms/marshall-plan "fv-autolink") money rebuilt European industry after [World War II](/ap-euro/unit-8/world-war-ii/study-guide/U4UCrRJlJSuTdFmINVgr "fv-autolink") and powered roughly twenty-five years of growth (KC-4.2.IV.A). That growth funded cradle-to-grave welfare states (KC-4.2.IV.B). Then growth stalled, industry shrank, and tax revenue couldn't keep up with welfare spending, which is exactly why leaders like Margaret Thatcher pushed to cut back the welfare state and deregulate. Deindustrialization is the hinge between the boom and the backlash.

## Why It Matters

Deindustrialization lives in **Topic 9.6 (Postwar Economic Developments)** in [Unit 9](/ap-euro/unit-9 "fv-autolink") and supports learning objective **[AP Euro](/ap-euro "fv-autolink") 9.6.A**: explain state-based economic developments after World War II and the responses to them. The 'response' half is the payoff. You can't explain why the welfare state came under attack in the 1970s-80s without deindustrialization, because shrinking industry meant economic stagnation, and stagnation is what KC-4.2.IV says triggered criticism and limitation of welfare programs. It's also a perfect continuity-and-change concept. Europe spent Units 5-6 industrializing; deindustrialization is that story running in reverse, which makes it ideal evidence for long-range LEQ arguments about the European economy.

## Connections

### [Economic Miracle (Unit 9)](/ap-euro/key-terms/economic-miracle)

These two are bookends. The Marshall Plan-fueled 'economic miracle' rebuilt industry and drove growth from the late 1940s to about 1970, and deindustrialization is what came after, when that industrial engine wound down. Knowing both lets you narrate the whole postwar economic arc in one sentence.

### Welfare State Criticism (Unit 9)

KC-4.2.IV draws the causal line for you. Industrial decline meant stagnation, stagnation meant less money for cradle-to-grave benefits, and that squeeze produced the 1980s push to limit the [welfare state](/ap-euro/key-terms/welfare-state "fv-autolink"). Deindustrialization is the cause; Thatcher-style cutbacks are the effect.

### [Deregulation (Unit 9)](/ap-euro/key-terms/deregulation)

[Deregulation](/ap-euro/key-terms/deregulation "fv-autolink") was a policy response to deindustrialization. Leaders facing stagnant, post-industrial economies bet that loosening state control, privatizing industries, and freeing markets would restart growth. One is the problem, the other is a proposed fix.

### [The Industrial Revolution (Units 5-6)](/ap-euro/key-terms/the-industrial-revolution)

Deindustrialization is [the Industrial Revolution](/ap-euro/key-terms/the-industrial-revolution "fv-autolink") played backward. The same regions that filled with factories, coal mines, and urban workers in the 1800s emptied out in the late 1900s. That symmetry makes it gold for continuity-and-change essays spanning 1815 to the present.

## On the AP Exam

No released FRQ has used 'deindustrialization' verbatim, but it sits squarely in tested territory. Multiple-choice questions on Topic 9.6 often give you a passage or data about postwar Western European economies and ask you to explain why welfare states expanded and then came under criticism. Deindustrialization is the link in that chain. For LEQs, it's strong evidence in any continuity-and-change prompt about the European economy in the 20th century, or any causation prompt about Thatcherism, deregulation, or welfare state retrenchment. What you have to DO with it: don't just name it, connect it. Show that industrial decline caused stagnation, and stagnation caused the political response.

## deindustrialization vs deregulation

Both are 'de-' words from the same era, but they're different kinds of things. Deindustrialization is a structural economic shift (factories closing, service jobs growing) that governments didn't choose. Deregulation is a deliberate policy (removing state rules and controls on the economy) that leaders like Thatcher chose partly in response to deindustrialization. One happened to Europe; the other was done by European governments.

## Key Takeaways

- Deindustrialization is the shift of Western European economies away from manufacturing toward service sectors, reducing industrial employment from roughly the 1970s onward.
- It marks the end of the postwar 'economic miracle' that Marshall Plan funds had launched in Western and Central Europe (KC-4.2.IV.A).
- The CED's core causal chain is that deindustrialization produced economic stagnation, and stagnation led to criticism and limitation of the welfare state (KC-4.2.IV).
- Deregulation and privatization in the 1980s, especially under Thatcher in Britain, were policy responses to deindustrialized, stagnant economies.
- It works as a reversal of the Industrial Revolution from Units 5-6, making it strong evidence for continuity-and-change essays about the European economy.

## FAQs

### What is deindustrialization in AP Euro?

It's the late-20th-century shift in Western European economies away from manufacturing toward service sectors, which shrank industrial employment. In AP Euro it appears in Topic 9.6 as a postwar economic development that helped trigger criticism of the welfare state.

### Did deindustrialization mean Europe's economy collapsed?

No. Manufacturing declined, but service sectors like finance, retail, and tourism grew to dominate instead. The problem was transitional: industrial regions and workers suffered, growth slowed, and welfare states built during the boom became harder to fund.

### How is deindustrialization different from deregulation?

Deindustrialization is a structural change that happened to economies (factories closing, services growing), while deregulation is a deliberate government policy of removing economic rules and controls. Leaders like Thatcher used deregulation in the 1980s partly as a response to deindustrialization.

### What caused deindustrialization in Western Europe?

The postwar 'economic miracle' driven by Marshall Plan reconstruction lost steam around 1970, and manufacturing declined as service sectors expanded. For the exam, the key point is the result: stagnation that strained cradle-to-grave welfare programs and prompted leaders to limit them.

### Is deindustrialization on the AP Euro exam?

Yes, it's part of Topic 9.6 (Postwar Economic Developments) under learning objective AP Euro 9.6.A. It shows up most often in questions about why the welfare state expanded after WWII and then faced cutbacks in the 1970s-80s.

## Related Study Guides

- [9.6 Contemporary Western Democracies](/ap-euro/unit-9/contemporary-western-democracies/study-guide/62fKzNuE3YVkrAE6QVVT)

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