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Term Paper on Industrialisation
Term Paper Contents:
- Term Paper on the Introduction to Industrialisation
- Term Paper on the Patterns of Industrialisation
- Term Paper on the Process of Industrialisation
- Term Paper on the Social Problems and Consequences of Industrialisation
- Term Paper on Industrialisation Influence
- Term Paper on Appropriate Industrial Technology
- Term Paper on the Factors to Promote Industrialisation
Term Paper # 1. Introduction to Industrialisation:
Industrialisation is inevitable in a developing economy. But what is industrialisation? Pei Kang-Chang has said that, “industrialisation in a way is a process of developing as well as widening of capital.” Eugene Staley has linked industrialisation with high productivity and has said that “High productivity produces industrialisation and that industrialisation produces high productivity.”
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Prof. S.C. Kuchhal has said that, “industrialisation is also treated as a process in which the economic gains of industrial progress, mainly in the nature of increasing returns are continuously created and wholly or partially realised.” In UNESCO “industrialisation means an absolute and relative growth in the importance of factories, mills, mines, power plants, railways and so on of manufacturing and closely related activities, especially activities involved in the building and operation of a modern economic infrastructure.” Industrialisation has also been defined as use of more capital per unit of output.
Industrialisation and Per Capita Income:
Living standard of people is adjudged by the per capita income of the people. Needless to say that income is directly linked with industrialisation. It is industry which provides employment to the skilled, semi-skilled and un-skilled labourers. No one can deny that vast difference between low per capita income of undeveloped and developing countries on the one hand and high rate of consumption and per capita income of developing countries is primarily due to industrialisation.
Industrialisation and Economic Development:
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Industrialisation and economic development always go hand in hand. In the words of Myrdal, “In advanced countries the development of manufacturing industry has been concomitant with these countries’ spectacular economic progress and rise in the levels of living – many of its products are indeed almost symbolic of a high living standard.”
Industrialisation helps providing employment, raising paying capacity of the masses, national productivity and income. It also provides a viable solution to the ever-increasing economic problems of the countries faced with population explosion. It is industrialisation alone which can help in proper exploitation of natural resources of a country to the best advantage of the natives themselves.
Term Paper # 2. Patterns of Industrialisation:
Patterns of industrialisation vary from one country to the other. In England, France and the USA, by and large industry is in private sector whereas in China and USSR it is in public sector. In India we have mixed economy, where both public and private sectors are free participants in industrialisation. Another pattern of classification can be whether process of industrialisation is evolutionary or revolutionary though it is in fact very difficult to clearly differentiate between the two.
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It is commonly believed that the pattern of industrialisation in USSR was revolutionary whereas the one in the USA evolutionary. In an evolutionary pattern and process enterprising spirit, personal freedom and technology are main generating forces.
Term Paper # 3. Process of Industrialisation:
Each society had to pass through different stages before it became industrially progressive and advanced. Industrialisation process is linked with social system on the one hand and rate of economic development and growth on the other. Whole process also proceeds from simple to the complex and that too passes through different stages, though the time taken may not be the same at every stage.
The time would always depend on available resources, availability of manpower, attitude of the government and its policies and programmes and also social system favouring or disfavouring industrialisation. Industrialisation process and policy cannot however be framed in isolation.
Industrialisation is a continuous process and usually passes through three stages. In the first stage secondary industry concerns itself with the processing of primary products e.g. milling grains and tanning leather etc. In the second stage secondary industry begins to transfer material to somewhat finished goods e.g., preparation of bread and confectionery etc.
In the third stage machine and equipment is used not for direct satisfaction of any want but for facilitating future process of production. Where there is first stage of industrialisation, the country will be exporting bulk of its output whereas at the second stage the industry will be capable enough to serve its local needs.
Most of the developing countries have only reached second stage of industrialisation. Third stage of industrialisation indicates industrial maturity of the nation. At this stage the nation is in a position to not only satisfactorily meet its own needs and necessities but to export goods to other countries to meet their requirements as well.
Industrialisation has become today motto and watch word of every developing nation. Those nations which have recently won freedom are making every effort to industrialise themselves. Of course the task is not easy, because the process of industrialisation needs vast men and material resources and needs of the society are many which need immediate tackling.
Term Paper # 4. Social Problems and Consequences of Industrialisation:
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Industrialisation very deeply affects social patterns and processes. It changes our social outlook and approach to social problems. It influences family, religion and whole of our urban and rural pattern and set up.
Some of the important social effects may be discussed as under:
1. Social Adjustment:
Industrialisation creates great problem of social adjustment. In a rural economy usually there is village solidarity and spirit of collectiveness. There is less of competition and more of co-operation. But with industrialisation spirit of collectivism is replaced by individualism. Not only this, but village loses its family character.
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2. Setback to Customs and Traditions:
The villages all over the world have their own customs and traditions. These develop after long years of labour. Industrialisation changes whole outlook of the people towards these customs and traditions to the disadvantage of the society.
3. Effect on Family System:
Agricultural pattern favours joint family system, whereas industrialisation not only discourages the system but makes that impossible because every village boy who manages to get a job in the industry cannot take his whole family with him.
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4. Problem of Moral Standards:
Usually the old and young in a family live in a hut built by the workers around the factory. This creates moral problems for the grown up children both boys and girls.
5. Problem of Taxation Structure:
Pattern of taxation in agricultural economy is definitely different than the one which can be in industrialised society. Agriculture cannot be taxed to the extent to which industry can be taxed. Similarly agriculture can afford to have more direct taxation than the industry.
6. Health Problems:
Industrialisation creates as well as solves many health problems. It can produce goods, which help in maintaining cleanliness etc. But usually it creates health problems. Industries fail to provide good accommodation to their low paid employees, who are forced to live in huts and shanties without proper drainage and water facilities. The smoke of the health is in itself a disease trap. Even there is problem of inhaling and exhaling. Thus industry creates its own health problems as well.
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7. Setback to Handicrafts:
Handicrafts receive serious setback. Industry can produce goods quickly, in a better manner and with less cost. The goods produced by machine are better to look at. The people thus prefer to purchase machine made goods rather than handicrafts resulting in loss of income to the villagers and also lowering their living standard, making their lives economically miserable.
8. Deterioration in Urban Environment:
While discussing social effects of industrialisation, Prof. Kuchhal has said “During a period of rapid industrialisation there may be time lag between establishment of factories in the urban areas and making associated investments in public utilities, road and means of transport, housing, sanitation schools, hospitals and recreation facilities. It may lead to deterioration in urban environment, creation of slum conditions, overtaking of facilities and consequent reduction in the standard of living.”
9. Dis-Proportionate Urban-Rural Development:
When there is Industrialisation naturally more stress is laid on the development of urban areas where the industries are located rather than the rural areas where there are no industries. The problem of urban-rural development is created. Urban areas develop only an at the cost of rural area, which in turn creates its own problems.
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It will thus be observed that industrialisation results in the creation of many social problems. It influences our family and religion. In fact there is no aspect of life which is not influenced by industrialisation either in one way or the other.
Term Paper # 5. Industrialisation Influence:
i. Influence of Industrialisation on Internal Trade:
In an agricultural economy pace of trade inside the country is very slow. Whatsoever is produced, is locally consumed but, if there is at all any surplus production that is consumed in the nearby areas and localities without much bargaining. In an agricultural economy except agricultural goods there is no commodity in excess supply.
ii. Bulk Production becomes Possible:
But industrialisation gives a new fillip to trade. With the establishment of new industries more and more goods are produced. It becomes then possible to produce goods in bulk so that demands of the consumers are met. An industrialist will then try to monopolise and ensure that his brand reaches every nook and corner of the country. The result of all this is that trade becomes brisk and more the industries are set more brisk the trade becomes. The whole nation then gets activities with business activities and nation becomes a centre of trade.
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iii. Trade Pattern Changes:
In an agriculture economy, whatsoever is surplus is sent out as raw material, because the chances of internal consumption do not exist. But when country is industrialised, whole trade pattern changes. Raw material is consumed by the industry itself. Then there is no need to trade with outside market. The trade in these goods in the country becomes brisk.
iv. Effects on Foreign Trade Restrictions on Import of Goods:
But effects of industrialisation are more on foreign rather than on internal trade. One of the important effects is that with the production of indigenous goods, and because of emergence of industrial area, import quota is considerably reduced. Thus every effort is made to put every restriction on the import of goods which are being manufactured in the country.
This is done with two main objects in view. The first object is that the newly set up industry is protected from competition of already established industries in the market. If newly set up industries are required to face world competition, these are bound to be ruined.
Then another objective is that foreign exchange is saved. Since each nation is always short of foreign exchange, therefore by putting ban on import of these goods, foreign exchange is saved. But one adverse effect of this policy is that extent of foreign trade comes down.
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v. Diversification in Trade:
As long as the country is not industrialised, it is to depend on foreign market, for the purchase of only those commodities which are most essentially needed by the society. Thus trade is confined to few commodities only and that too, to a limited extent because limited foreign exchange availability does not permit to increase its scope. But when country becomes industrialised it becomes self-sufficient in some respects and is in a position to save some foreign exchange. Money thus saved can be used for the purchase of other goods and commodities.
Both Way Trade:
Still another effect is that the trade becomes both ways traffic. Before industrialisation, a nation is to depend on other countries. It is only to take and not to give. The exporting country is always in a better bargaining position and quotes terms to suit its convenience. On the other hand importing country has nothing to export or bargain. But with industrialization, the situation change.
vi. Dependence on Capital Goods:
Dependence for spare parts and capital equipments increases, in so far as countries going to be industrialised are concerned. For the establishment of industry machines and spare parts are needed. These are not manufactured in the country and ought to be imported from the countries which can provide them. In this way industrialisation brings dependence on capital goods in foreign trade.
Industrialisation in fact, influences balance of international trade. There are many instances to quote that those countries which were having adverse balance of trade before industrialisation had a favourable trade balance after industrialisation. Not only this, but after industrialisation had many nations emerged as exporters instead of remaining as importers only.
Term Paper # 6. Appropriate Industrial Technology:
1. Technology Factors:
There is no doubt that technological factors contribute very substantially to the raising of industrial productivity. In fact, it is the single most powerful factor with the greatest impact on industrial productivity. Just compare production of cloth by a worker with the aid of a handloom, a power loom and automatic loom and one can notice what difference technological factors have made to productivity.
Thus, “The application of motive power and mechanical improvement to the processes of production have accelerated the pace of industrialisation to an unprecedented degree, and have given us the vision of the past and unexplored frontiers that still lie ahead of us in the realm of science and technology.” Mechanical power highly complicated and sophisticated machines, efficient integration of various processes of production, specialisation of work have all tremendously increased industrial productivity.
If Ford could produce just about six cars per month when the factory was established in the beginning of the present century, the same factory can now turn out, a car per minute, thanks to the unprecedented advances in sciences and technology and assembly line production system.
i. Increase in Productivity:
But it is very difficult to measure exactly how much increase there has taken place in industrial productivity due to technological progress and advances, though it’s tremendously favourable impact on industrial productivity is undoubted.
If, in developing countries like India, industrial productivity is relatively low compared to that in the developed countries, one very important reason is obsolete machinery, lack of spare parts, absence of or inadequate skills for handling machines, inadequate power supply and comparative neglect of Research and Development which are the very foundation and basis of technological progress and continual advances.
ii. Technological Aspect of Production:
So far as technological aspect of rationalisation is concerned, it involved standardisation of product, simplification of process of production wherever possible, mechanisation of process of production, intensification of efforts by labour, and specialisation of work.
iii. Standardisation:
Standardisation implies a judicious process of selection of materials and products. It means fixing of certain standards, eliminating unsuitable sizes (for example, two or three standard sizes of toilet soaps rather than having hundreds of sizes of different shapes and forms). Elimination of undesirable sizes would increase productivity of existing industrial units and of capital equipment.
iv. Simplification:
Simplification implies rendering complex industrial productive processes simple. On the basis of experience and experimentation complex technical process can be reduced to simple processes. With the simplification of technical operations, workers would find it easy to acquire the skills and, thus, become more efficient and productive.
Standardisation of a product would be beneficial from the point of view of retailers who will have to keep a smaller stock and also beneficial from the point of view of consumers as they will have to choose from among a fewer but better varieties of a product.
v. Mechanisation:
Mechanisation implies mechanical operations in place of manual handling of production process. Mechanisation ensures uniformity, accuracy and regularity of supply. Mechanisation helps to bring about standardisation of products and thus helps to reap all the advantages of standardisation.
vi. Intensification:
Intensification implies increasingly rapid speed of execution. The main objective of ‘intensification’ is increasing the rapidity of productive processes by removing inefficiency and slackness. Mechanisation also results in specialisation or helps to bring about specialisation with increasing efficiency of labour and productivity and lower costs of production and prices of goods.
Thus, it would be observed that standardisation, simplification, mechanisation with increasing efficiency of labour and productivity and lower costs of production and prices of goods.
2. Organisational Aspect:
On the organisational front, rationalisation implies some sort of agreement and coordinated action by all the producers in an industry with a view to coordinate total supply with total.
Term Paper # 7. Factors to Promote Industrialisation:
Process of industrialisation is not very easy. The difficulties are of course great, but it is wrong to think that these are insurmountable. Though it may take time but gradually a determined nation will be in a position to industrialise itself.
Some of the factors which promote industrialisation may briefly be discussed as under:
1. Availability of Natural Resources:
A country which wishes to industrialise itself will be in a position to do so soon in case natural resources are available in the country and the nation is not to depend on other nations for making these available. Natural resources provide basic raw material needed for the promotion of industry.
It is then left to the Government to arrange and to see that these resources are properly exploited and made available to the industry as such low rates that it can afford to produce goods at cheap rates for the nation as whole.
2. Entrepreneurial Ability:
A country having able entrepreneurs will always go faster on the path of industrialisation, as compared with a country, which has no able managers. It is the responsibility of the country to produce able managers. The nation should also see that those who are trained in industrially advanced countries do not become a class among themselves, but provide sufficient training to others in the country so that stream of trained people flows in the country itself.
3. Facilities to Labourers and Workers:
Industrialisation becomes easy where facilities to labourers and workers are available in the industries and they feel attracted and tempted to join these. These facilities should be so alluring and attractive.
4. Setting Up of Corporations:
One method which can promote industrialisation is that Industrial Development Corporations should be set up, which should be exclusively responsible for the development of different sectors in the industry and should ensure that problems which come on the path of industrialisation are immediately removed so that whole process becomes smooth.
5. Availability of Labour:
In the countries where manpower both skilled and unskilled is available, path of industrialisation will be easy, as compared with the industries, where it is not available.
6. Availability of Capital:
In underdeveloped and undeveloped countries the capital for setting up new industries is usually very short and shy. It is preferred to be spent on purchase of agricultural land, because more prestige is attached to that. Moreover whereas returns from agricultural lands are sure, these are speculative in the case of industrial investments.
The government can promote industrialisation by providing incentives to the shy capital by way of guaranteeing return of capital used in setting up industries or by giving some minimum profit on the investments made so that the problem of risk in investments is solved.
7. Role of International Organisations:
In the process of industrialisation international bodies play a vital role. It is with the help of these bodies that the exchange of expertise, technical knowhow and difficulties of foreign exchange are considerably solved. Who does not know that such international bodies as World Bank; International Finance Corporation; International Development Association; International Monetary Fund and International Fund for Economic Development have played a vital role in the industrialisation of non-industrialised countries.
8. Role of Industrially Advanced Countries:
Industrially advanced countries can play a big role in the complex and difficult task of industrialisation.
This they can do by:
(a) Technical personnel to train the untrained people of less advanced countries;
(b) By providing training facilities to the students of developing countries in their own country;
(c) By providing them machinery and where necessary funds as well;
(d) By assuring non-industrialised nations that supply of spare parts of the machinery being supplied to them will be continued;
(e) By way of long term loans, thereby not taxing their limited resources;
(f) By assuring countries that situation will not be allowed to develop in which good produced will not be consumed.
9. Easy Availability of Foreign Capital:
In case foreign capital is easily available, then industrialisation becomes easy. It helps in two ways; firstly foreign exchange becomes easily available and secondly it becomes possible to fully utilise internal available resources for industrialisation. In many cases though the nation may spare finances from internal resources, yet their utilisation might not become possible because necessary foreign capital for setting up industry is not available.
10. Arrangements for Providing Protection:
It is essential that newly set up industries should be given protection, from foreign manufactured cheap but good goods till these come of age and are in a position to complete with advanced countries of the world.
11. Checking of Inflation:
Industrialisation needs heavy investments, for which money can raised both by internal resources and with the help of foreign nations. Usually less advanced countries of the world are not in a position to bear the burden of this extra investment resulting in inflation. This makes masses vehemently oppose industrialisation. It is therefore, essential that investment in industrialisation should be made only to the extent to which economy can bear that and inflationary tendencies are effectively checked.
12. International Trade:
Each nation today has international trade both for development and survival. It is with its help that foreign exchange becomes easily available, and nation can procure machinery and spare parts. Consumption of goods produced is facilitated.
13. Industrial Planning:
Industrialisation of non-industrialised nations needs proper planning. Industrial planning must clearly specify the extent to which the nation is prepared to industrialise, itself and also the ways and means of industrialisation. It should decide priority areas of industrialisation. But greatest care to be taken is that different sectors of industrial economy do not clash with each other and are harmoniously allowed to grow.
14. Government’s Fiscal Policies:
If a nation wants to go industrially fast, it enjoins upon the Government of that nation to follow a fiscal policy which is sound and conductive for industry. The policy should discourage speculative investment, bring about an increased investment; increase in number of subsidiary industries and provide for tax concessions in re-investment.
These are some of the steps which promote industrialisation, but all these cannot be taken all at once. It takes a very long time to formulate industrial policy and still more to implement that, because no industrially backward nation can successfully launch programme of industrialisation without active co-operation of international organisations on the one hand and industrially advanced countries on the other. In the wake of industrialisation, cottage industries receive a setback and importance of agriculture is reduced to a considerable extent.