The Role of Industrialization in Economic Development - Prof. Gaopalelwe, Summaries of Political history

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INDUSTRIALISATION IN DEVELOPMENT

What is Industrialisation?

 (^) Industrialization is the process of re-organizing an agrarian economy into one focused on the mass production of goods and services. Typically, this is accompanied by mechanized production, which allows businesses to produce more goods with less human labor (for example, using coal power instead of manual power to operate machines).  (^) Industrialisation usually involves significant societal changes, including a move towards free labor markets in which workers have more power to choose their employers. Fewer people work in farming, as more find jobs in manufacturing, often moving from rural areas to urban areas. Industrialization tends to promote entrepreneurship, mobility, greater personal freedom, and higher standards of living. It increases productivity and fuels economic growth. Significant changes to infrastructure also tend to accompany industrialization, including the construction of roads and railroads. Historically, industrialization has sometimes led to higher levels of pollution and carbon emissions, along with exploitative labor practices.  (^) Therefore, industrialization is an economy based on mass manufacturing. Individual manual labor is often replaced by mechanized mass production, and craftsmen are replaced by assembly lines. Just like technology, Industrialisation is also regarded as an engine of economic growth. A strong industrial sector generates employment and enhances the development of backward and forward linkages for wider economy. Industrialisation is not just an economic issue, but ideological and political as well.

 Industrialization also occurred in the United States between the 1880s and the Great

Depression. Industrialization of the west was based on capital accumulation, plundering

resources in Africa. The continent specialized in production and exporting of raw

materials agricultural, forestry and minerals. And dependent on imports of manufactured

goods. And that is still the case today. Therefore, the industry in the west grew and

continues to grow at the expense of Africa.

 Moreover, the onset of the Second World War also led to a great deal of industrialization,

which resulted in the growth and development of large urban centers and suburbs. During

this period countries wanted to develop weapons of war - militarization of states. The

trend continued after the war, with countries wanting to militarily dominate others. In this

race there was Russia and China trying to out do the US and western countries. That

industrialization competition still continues with China and the USA trying out-do each

other.

Periods of the industrial revolution

 (^) The first Industrial Revolution 1765 : The first industrial revolution followed the proto- industrialization period. It started at the end of the 18 th century to the beginning of the 19 th

. The biggest changes came in the industries in the form of mechanization. Mechanization was the reason why agriculture started to be replaced by the industry as the backbone of the societal economy. At the time people witnessed massive extraction of coal along with the very important invention of the steam engine that was the reason for the creation of a new type of energy that later on helped speed up the manufacturing of railroads thus accelerating the economy.  (^) The second Industrial Revolution 1870 : It started at the end of the 19th^ century, with massive technological advancements in the field of industries that helped the emergence of a new source of energy. Electricity, gas, and oil. The result of this revolution was the creation of the internal combustion engine that started to reach its full potential. Other important points of the second industrial revolution was the development for steel demand, chemical synthesis and methods of communication such as the telegraph and the telephone. Finally, the inventions of the automobile, and the plane in the beginning of the 20th^ century are the reason why, to this day, the Second Industrial Revolution is considered the most important one!

Types of industries

 There are three types of industries and they all differ based on economic activities and

income levels as well. However, these industries are also interdependent. For instance, The

primary sector is majorly involved in dealing with natural products like fishing,

agriculture, forestry and dairy. The secondary industry requires the products from the

primary sector of its operation to create more products and utilities. The tertiary industry is

involved in providing services that market the several products that are created in primary

and secondary industries.

Primary Industry

 (^) The primary industry includes the economy that utilises the natural resources of the environment like forestry, agriculture, fishing, and mining. Generally, this particular sector is considered the most crucial in the developing countries & is relatively smaller in the developed nations.  (^) When we talk about developing countries, the primary industry is usually the largest sector. For instance, livestock farming in Africa is much more important than that in Japan. In a similar way, the whole of Wales depended mainly on mining and is the primary source of the economy there. This is the only sector in which the entire country of Wales can survive.  (^) The massive technological advancements in the various developed countries have made it possible to engage lesser human resources and get most of the work done by mechanical means. This is the reason why a lesser percentage of human workers are required in the developed countries.  (^) The primary industry examples include mining, fishing, mountain engineering industries.

The tertiary Industry

 (^) The tertiary industry majorly consists of the service sector. This would include several activities where the people usually offer their expertise and knowledge for improving productivity, potential, performance and sustainability. The most prominent characteristic of the tertiary sector is the production of several nature services that include advice, care, experiences, access and discussions.  (^) The services may also involve the distribution, transport and sales of goods from the production company to the consumers via different channels. The goods are transformed in this process as in the restaurant industry, where the raw foods are used for cooking several dishes and serving to the consumers. The focus of this industry is more to interact with a lot of people and focus on customer service even more than the transformation of the different kinds of physical goods.  (^) There are several sub-categories of the tertiary industry  (^) Professional services – Several occupations are included in the tertiary sector that majorly requires special expertise and training in the sciences and arts. Some of the major professional services require specialised professional licenses just like that of the auditors, architects, lawyers, engineers and doctors. The other professional services also involve several specialised businesses supported like a professional offering their services to the companies like tax consulting or IT services. The other professions in this category are dentists, administrators, nurses, pharmacists and surgeons.

 (^) Telecommunications – This is a sector that deals with the transmission of signs, signals, words, messages, sounds, images or intelligence of any kind through cables, radio, electromagnetic internet and television systems.  Franchises – This is the practice of offering the right to use a specific business model and a specific brand for a certain interval of time. For a particular franchise owner, this is an alternative for building commercial chains for the distribution of goods. Several countries have laws that strictly regulate the franchising industry.  Public health – This specifically refers to the specialised professional area that concentrates on preventing diseases and helps in prolonging lives and promote human health through several informed decisions and organised efforts. There are several private and public bodies, individuals and communities which dedicatedly work in this specific sector.

 Stimulated Progress in Other Sectors: Industrialization stimulates progress in other sectors of the economy. A development in one industry leads to the development and expansion of related industries. For instance, the construction of a transistor radio plant will develop the small-battery industry. (This is an example of backward linkage.) In another case, the construction of milk processing plants adds to the production of ice cream as well. (This is forward linkage.)  Increased Employment Opportunities: Industrialization provides increased employment opportunities in small- and large-scale industries. In an industrial economy, industry absorbs underemployed and unemployed workers from the agricultural sector, thereby increasing the income of the community.  Greater Specialization of Labor: Industrialization promotes specialized labor. This division of work increases the marginal value product of labor. In other words, specialized labor is more profitable. The income of a worker in the industrial sector will be higher on average than that of a worker in the agricultural sector.  Self-reliance in Defense Production: To achieve self-reliance in defence production, industrialisation is necessary. During war and emergency dependence on foreign countries for war weapons may prove fatal. Self-reliance in capital goods and industrial infra-structure is also necessary.  Importance in International Trade: Industrialisation plays an important role in the promotion of trade. The advanced nations gain in trade than countries who are industrially backward. The underdeveloped countries export primary products and import industrial products. Agricultural products command lower prices and their demand is generally elastic. While industrial products command higher values & their demand is inelastic. This causes trade gap. To meet the deficit in balance of payments we have to produce import substitute products or go for export promotion through industrial development.

Efforts to industrialize Africa

 Growth of the metals and textiles industries allowed for the mass production of basic

personal and commercial goods. It also led to increased labor specialization and allowed

cities to support larger populations, motivating a rapid demographic shift. People left

rural areas in large numbers, seeking potential fortunes in budding industries.

 Industrial technologies are both an outcome of the industrialization process and one of

its main driving forces. Uneven industrial development has long been a core concern for

economic theory. However, industrialization occurred in a few countries like South

Africa and Zimbabwe because of minerals and mechanized commercial agricultural.

 You need to know why there is unevenness in industrial development between different

countries, especially, between developed and developing countries.

Industrialisation in South Africa

 While the most of Africa has been experiencing deindustrialization because of unfavourable

domestic policies, South Africa remains the only industrialised country in the continent. In the

late 19th Century, South Africa changed rapidly from an agricultural society, where most

people lived off the land, to an industrial society. This took place largely as a result of the

discovery of large diamond deposits in Kimberley in 1867 followed in 1886 by the discovery

of gold on the Witwatersrand. The discovery of diamonds and then gold changed the character

of the region and its economy. Within two decades mining activities totally dominated the

economy, providing close to 60% of exports from the region (Feinstein, 2005, 101). Diamonds

and later gold trans-formed the South African economy and with it its society and politics.

 In 1994, the majority government inherited a dual economy with a well developed

infrastructure, a well-developed and modern financial sector and capital market; pockets of

skilled labour and research and science expertise; and an internationally competitive group of

firms in the mining and related sectors. Manufacturing production was very capital intensive,

and in combination with a declining primary sector, this resulted in high unemployment.

• (^) Additionally most firms were not internationally competitive (with the above mentioned exceptions) but inward- oriented. A large part of the population was disadvantaged by a dismal education system which failed to equip them with adequate skills for a changing labour market. However, large sections of the economy were controlled by a few dominant group, so that oligopolistic collusion was the rule and smaller and medium companies faced huge obstacles.
• (^) Industrial development after 1994, was shaped by the macroeconomic framework conditions, with significant sectoral variations. Sectors close to the country's resource endowment continued their strong performance, while broader manufacturing performed poorly. The agricultural sector whiles comparatively small was highly industrialised however, the end of apartheid brought an end to heavy subsidies for white farmers and a move towards free markets. This led to increased concentration and further job losses in the sector.
• (^) As more and more global companies seek to obtain the widely reported benefits of 4IR, the demand for professionals skilled in data science and advanced analytics has grown exponentially.6 In South Africa, this demand far exceeds supply, leading to a particularly severe digital skills gap. In 2020, South Africa ranked 59th out of 63 economies in the Institute for Management Development’s (IMD) World Competitiveness Yearbook – its lowest ranking since the inception of the yearbook.7 In the IMD’s digital ranking results, which measure the capacity and readiness of the same economies to adopt digital technology, South Africa ranked 60. Its overall top weaknesses were listed as digital and technological skills, as well as higher education achievement.8 To compete globally, South Africa will first need to foster an economy that empowers its citizens with the necessary future-fit skills.