Industrialization

Industrialization refers to the economic growth and processes occurring at any geographical scale, ranging from a metropolitan region to an entire country. Historically, these processes entail the initiation and development of a manufacturing sector that first specializes in basic activities that include the production of commodity-type goods. Before this initial industrialization stage, many regions or countries are heavily involved in the primary economic sector, in agriculture and/or extractive activities. In the case of some countries with few or no natural resource endowments, reliance on the primary sector is untenable, thereby compelling countries into rapid industrialization.

The initial stages of industrialization (basic manufacturing) take advantage of the low-cost advantages that a newly industrialized region or country has, centered on available labor, natural resources, and/or a large market. Next, as levels of human capital and overall capital accumulation rise, production activities move toward advanced manufacturing activities, entailing increased technical sophistication and decreased economic reliance on manufactured goods. The end result is that the overall economic wealth increases and industrial activities become diverse and increasingly complex. This transition also includes the establishment of advanced manufacturing functions such as research, design, logistics, and management as production moves to offshore sites. This transition has been a cause for concern in many advanced market economies, given their large losses of production-related employment. Recent economic history has also suggested that the industrialization process also encompasses a move toward a varied and sophisticated service sector.

Industrialization, as it is generally understood, took place during the Industrial Revolutions of Great Britain, Western Europe, and the United States during the mid 19th century. Japan rapidly developed during the late 19th and early 20th centuries. Notably, Japan again achieved rapid industrialization in the decades following World War II, developing into the world's second largest economy. Similar swift industrialization paths occurred in South Korea and Taiwan, to provide just two examples. Currently, industrialization processes are occurring, at different rates and at various stages, across the world. The most visible examples are found in the recent, rapid economic growth witnessed in China and India.

A noteworthy point is that economic history has demonstrated that no single, clear-cut path to industrialization exists with regard to the methods, types of industries, or even the institutions involved in the process. Geographers and other researchers have been interested in the conditions [Page 1581]and forces that most often make each industrialization process unique with regard to its pace, methods, institutional involvement, and end results. The paths to industrialization in the United States and Britain were considered to have been largely led by the private sector, but even these economic transitions often involved degrees of policy-led participation. In Western Europe, industrialization entailed a large degree of public sector/private sector interaction, but again, this varied by country. In the above examples, industrialization often started with industries such as textiles, then progressed with heavy industries such as steel and chemical production. A goal was to serve domestic markets and, secondarily, to export to other markets, which sometimes included colonies. For Japan and throughout much of East Asia (with many countries basing growth policies on the Japanese model), the links between government and industry were close. In these instances, government played a strong advisory role, formulating a strong industrial policy. Trade policies such as import substitution and export promotion were also implemented with the aim of achieving rapid economic growth, stability, and higher standards of living. The point to be made with regard to industrialization is that even opinions about government involvement or market structure (e.g., regulation of monopolies) have been viewed quite differently. All the above situations involved industrialization with the end goal of economic development. However, the means to achieve these goals and the paths that were taken have been quite different.

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