Industrialisation and Development

What is Industrialisation?

Industrialisation is where a country moves from an economy dominated by agricultural output and employment to one dominated by manufacturing. This will usually involve the establishment of factories in which things are produced in a rationally organized (efficient) manner. Below we look at perspectives on ‘industrialisation’ as a means of development.

Quick brainstorm to illustrate how reliant we are on industrialisation – Think of all the products you have come into contact with today. Make a list of everything that you think was made in a factory somewhere and anything that was ‘hand-made’

Industrialisation should promote economic and social development in the following ways.

  1. Industrialisation means a country can produce a wider range of higher value goods – both for sale at home and for export abroad….
  2. Industrialisation encourages the emergence of other businesses to meet the needs of factories – coal mining to provide power for example.
  3. Industrialisation eventually means a country will be less dependent on manufactured imports from abroad
  4. Industrialisation requires workers – who will be paid wages – which gives them more money and stimulates demand in the economy and further economic and social development
  5. Industrialisation requires an educated workforce (at least some workers – management – need to be educated) which encourages the government to invest in education.
  6. Industrialisation leads to urbanisation – as workers flock to factories to find work….

Arguments for the view that industrialisation leads to development

Modernisation Theory

Modernisation Theorists argue that Industrialisation lead to the West developing and this is what developing countries should do. In the 1950s and 60s, Modernisation Theorists suggested that the West should provide assistance in the form of Official Development Aid to developing countries – providing them with an initial injection of capital and expertise to enable them to build factories and power stations (hydro-electric dams were particularly favoured),  and infrastructure to kick start industrialisation. Another form of ‘industrial development’ achieved with help from the west involved providing tractors and pesticides to ‘industrialise agriculture’ – which involved the setting up of large scale farms which could produce food more efficiently than numerous subsistence small holdings.

Supporting evidence for Modernisation Theory

There are a couple of examples of countries which have successfully (at least partially) industrialised with the support of Official Development Aid from the West – the most obvious examples being Indonesia, Botswana and to a lesser extent India.

Criticisms of the idea that industrialisation results in development

Dependency Theory and Industrialisation

Dependency Theorists (Classical Marxists) argue that Industrialisation is crucial for ‘independent development’ – but it is just as crucial that developing countries control the process of industrialisation, not the West.

Supporting evidence for Dependency Theory

This was the position adopted by Russia in the 1920s and 30s, China in the 1960s – where two communist governments controlled the industrialisation process. Even though tens of millions died during these respective periods of forced industrialisation, today these two countries make up 2/4 of  the BRIC nations.

World Systems Theory and Industrialisation – Not every country can industrialise in the Global Capitalist System

Emmanuel Wallerstein argues that countries only industrialise if it benefits the West and that it isn’t in the interests of the West for every country to industrialise and grow economically.

Wallerstein sees the World Economy as being is split into 3 main regions –

The Core – Who consume high tech ‘end products’ such as cars, computers, processed foods, holidays (planes) – these are also ‘post-industrial’ service economies – mainly Europe, America, some of Asia and parts of Latin America.

The Semi- Periphery – The ‘industrialising, sweat-shop manufacturing areas – who turn raw materials into the high end products that the ‘top billion consume’ – Most of Asia and Latin America.

The Periphery – These are the poorer countries and regions who export raw materials (most of Africa but also huge swathes of Asia and some of Latin America) to the semi-periphery, who then make the products that the Core consumes.

The last half century has witnessed much of Asia and Latin America industrialise because this has benefitted the core – we can afford cheap manufactured goods because of cheap labour. However, our present model of high-consumption also requires cheap raw materials – for example minerals for mobile phones and computers, cheap cotton for clothes, and cheap grains for meat – and these will only stay cheap if the countries in the periphery stay peripheral – i.e. we require them to stay stuck at the bottom as non- industrialised exporters of cheap raw materials.

Further to this most advanced western nations are now post-industrial – only about 10% of jobs in the UK are now in the industrial-manufacturing sector. As a result, we now have more jobs in the service sector and still massive unemployment and social problems in the de-industrialised north.

 

People Centred Development – Countries don’t need Industrialisation to be socially developed

People Centred Development theory argues that the whole idea of industrialization being essential to development is very Eurocentric – this is how most Europe developed and thus modernization theorists assume that every other underdeveloped country now needs to do the same.

The two case studies of Bhutan and Anuta both remind us that Industrialisation is not the only path to development. Both of these countries have not industrialized and both populations have very good standards of living when measured by the HDI and more subjective measures of happiness. Having said this, both of these countries make use of goods that have been produced by industrialized countries.

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