Industrial countries have had a more than tangible impact on the world economy. They moved progress and changed the status of specific regions. Therefore, the history and characteristics of these states deserve attention.
What is meant by industrialization
When this term is used, we are talking about an economic process, the essence of which is the transition from agrarian-handicraft to large-scale machine production. It is this fact that is the key feature by which the industrial countries of the world are determined.
It is worth noting the following feature: as soon as machine production begins to prevail in the state, the development of the economy goes into an extensive mode. The transition of a particular country to the category of industrial ones is due to the influence of such a factor as the development of new technologies and natural sciences in industry. Such changes are especially active in the field of energy production and metallurgy.
In fact, any industrialized country is the product of a competent implementation of reforms in the field of legislation and policy. At the same time, of course, it is not possible withoutthe formation of a significant resource base and the attraction of a large number of cheap labor.
The consequence of such processes is the fact that the primary sector of the economy (agriculture, resource extraction) is dominated by the secondary sector (processing of raw materials). Industrialization contributes to the dynamic development of scientific disciplines and their subsequent introduction into the production segment. This, in turn, can significantly increase the income of the population.
First industrial country
If you look at historical data, you can make an obvious conclusion: it was the United States that was at the forefront of the industrial movement. At the end of the 19th and beginning of the 20th century, a large base was created here for dynamic industrial growth, which was facilitated by a tangible influx of labor. The components of this base were significant raw materials, the absence of obsolete equipment and the provision of absolute freedom for economic activity.
Considering the history of the development of industrial production, it should be noted that tangible shifts in this area occurred at the beginning of the twentieth century. They manifested themselves through an increase in the pace of development of heavy industry. The constructed transcontinental railway lines also contributed to this fact.
Such an industrial country as the USA is interesting because it became the first state in the history of world economic development, on the territory of which the following fact was recorded: the share of heavy industry exceeded the restindicators of general industrial output. Other countries were able to reach this level much later.
Another change that an industrialized country must inevitably make concerns the political and legislative spheres. At the same time, the need for a sufficient supply of cheap labor and raw materials is inevitable.
One of the key goals of production within an industrial economy is to produce as many finished products as possible. As a result, significant volumes of goods allow companies to enter the global market.
Changing the structure of US heavy industry
Given that North America is the territory where an industrial country experienced its formation, becoming the first in this format of economy, it is worth noting the following information: similar changes were achieved through changes in the structure of US heavy industry.
We are talking about the impact of scientific and technological progress, which caused the emergence and development of such new industries as oil, aluminum, electrical engineering, rubber, automotive, etc. At the same time, car production and oil refining had the most significant impact on development of the American economy.
Since electric lighting was quickly introduced into everyday life and production, kerosene was rapidly losing its relevance. At the same time, the demand for oil has steadily increased. This fact is explained by the dynamic development of the automotive industry, which inevitably led toincreased purchases of petroleum-based gasoline.
It is worth noting that it was the introduction of the car into the lives of US citizens that had a significant impact on the structure of production, allowing the oil refining industry to become dominant.
The methods of rational organization of labor also experienced changes. The development of mass serial production had a key influence on this process. This is primarily a streaming method.
It is thanks to these factors that the US began to be defined as an industrial country.
Other representatives of the industrial economy
The United States, of course, became the first state that could be classified as industrial. If we consider the industrial countries of the 20th century, we can distinguish two waves of modernization. These processes can also be called organic and catch-up development.
The countries of the first echelon include the USA, Great Britain, France and other small European states (Scandinavian countries, Holland, Belgium). The development of all these countries was distinguished by a gradual transition to an industrial type of production. First there was an industrial revolution, followed by a transition to mass and large-scale production of the conveyor type.
The formation of such processes was preceded by certain cultural and socio-economic preconditions:
- a high level of development of manufactory production, which was the first to be affected by modernization;
- the maturity of commodity-money relations, leadingto the maturity of the domestic market and its ability to absorb significant volumes of industrial products;
- a tangible layer of poor people who do not have the opportunity to earn money in any other way than providing their services as a labor force.
The last point includes those entrepreneurs who managed to accumulate capital and were ready to invest it in actual production.
Second tier countries
Considering industrial countries at the beginning of the 20th century, it is worth highlighting such states as Austria-Hungary, Japan, Russia, Italy and Germany. Their involvement in industrial production was somewhat belated due to the influence of certain factors.
Despite the fact that many countries were moving towards industrialization, the development of all states had common features. The key characteristic was the significant influence of the government during the period of modernization. The special role of the state in these processes could be explained by the following reasons.
1. First of all, it was the state that played a decisive role in the implementation of reforms, the purpose of which was to expand commodity-money relations, as well as to reduce the number of semi-subsistence and subsistence farms, which were characterized by low productivity. Such a strategy made it possible to obtain more free labor for the effective development of production.
2. To understand why industrialized countries have always been characterized by a significant state involvement in the process of modernization,It is worth paying attention to such a factor as the need to introduce increased customs duties on the import of imported products. Such measures could only be taken at the level of legislation. And thanks to such a strategy, domestic producers who were at the beginning of their development received protection and the opportunity to quickly reach a new level of trade.
3. The third reason why the active participation of the state in the modernization process was inevitable is the lack of funds from enterprises to finance production. The weakness of domestic capital was compensated by budgetary funds. This was expressed in financing the construction of factories, plants and railways. In some cases, even mixed banks and companies were created, using state and sometimes foreign capital. This fact explains why industrial countries, in addition to exporting products, were focused on attracting funds from foreign investors. Such investments had a particularly strong impact on the modernization process of Japan, Russia and Austria-Hungary.
The place of industrial countries in the modern economy
The process of modernization did not stop its development. Thanks to this, new industrial countries managed to form. Their list looks like this:
- Singapore,
- South Korea,
- Hong Kong,
- Taiwan,
- Thailand,
- China,
- Indonesia,
- Malaysia,
- India,
- Philippines,
- Brunei,
- Vietnam.
The first four countries stand out from the rest, which is why they are called the Asian tigers. During the 1980s, each of the states listed above showed its ability to ensure annual economic growth above 7%. Moreover, they were able to achieve fairly rapid overcoming of socio-economic underdevelopment and approach the level of countries that can be defined as developed.
Criteria by which industrial countries are determined
The UN is constantly monitoring the situation in the world, paying special attention to the economic development of various regions. This organization has certain criteria by which they determine the newly industrialized countries. Their list can be replenished only by the state that meets certain standards in the following categories:
- volume of exports of industrial products;
- gross domestic product per capita;
- share in the GDP of the manufacturing industry (should not be less than 20%);
- volume of investments outside the country;
- average annual GDP growth rate.
For each of these criteria and for all of them in total, industrialized countries, the list of which is steadily growing, should differ significantly from other states.
Features of the NIS economic model
There are certain reasons, both internal and external, that have had a significant impact on the economic development of the newly industrialized countries.
If we talk about external factors of economic growth, typical for all countries, then first of all, attention should be paid to the following fact: regardless of which industrial countries are considered, they will all be united by the presence of interest from developed industrial states. And we are talking about both economic and political interests. An example is the clear US interest in South Korea and Taiwan. This is due to the fact that these regions contribute to the opposition to the communist regime that dominates East Asia.
As a result, America provided these two states with significant military and economic support, which created a kind of impetus for the dynamic development of these states. That is why industrial countries, in addition to exporting goods, are largely oriented towards foreign investment.
As for the South Asian countries, their progress is due to the active support of Japan, which in recent decades has opened numerous branches of corporations that have created new jobs and raised the level of industry as a whole.
It is also worth noting the fact that in the newly industrialized countries located in Asia, most of the entrepreneurial capital was directed to the raw materials and manufacturing industries.
As for Latin American countries, in this region, investment was focused not only on the manufacturing industry, but also on the sphereservices, as well as trade.
At the same time, it is impossible not to notice the fact of the global economic expansion of foreign private capital. That is why industrialized countries, in addition to their own resources, have a certain percentage of foreign capital in virtually every economic sector.
Latin American NIS model
In the modern economy, there are two key models that can be used to characterize the structure and principles of development of modern industrialized countries. We are talking about the Latin American and Asian systems.
The first model is focused on import substitution, the second one focuses on exports. In other words, some countries are oriented towards the domestic market, while others receive the bulk of their capital through exports.
This is one of the answers to the question why industrial countries, in addition to exporting goods, are actively focused on import substitution. It all comes down to using a specific model. At the same time, it should be noted that the strategy of saturating the domestic market with a national product has helped many states to achieve economic progress. For this, it was necessary to diversify the economic structure in the country. As a result, important production capacities were formed, and the level of self-sufficiency in many areas increased significantly.
In fact, in every country that has focused on the development of production that can effectively replace imported goods, a serious crisis is fixed over time. As reasons for suchAs a result, it is worth determining the loss of efficiency and flexibility of the economic system, which is due to the lack of foreign competition.
It is difficult for such countries to take a confident position in the world market due to the lack of locomotive industries that bring the production sector to a new level of efficiency and relevance.
As an example, we can cite the countries of Latin America (Argentina, Brazil, Mexico). These states have managed to diversify the national economy in such a way as to reach a significant place in the world market. But they still failed to catch up with the export-oriented developed countries in their level of economic progress.
Asian experience
The export-oriented model implemented by NIS Asia can be defined as the most efficient and quite flexible. At the same time, it is worth noting the fact of parallel import substitution, which was correctly combined with the main scheme of economic development. Surprisingly, as it turned out, two models with different accents can be combined quite effectively. At the same time, depending on the specific period, priority may be given to the most relevant of them.
But the fact remains that before the state moves to the stage of dynamic export expansion, it must undergo import substitution and competently stabilize its percentage in the overall economic model.
Asian NIS was characterized by the development of labor-intensive export-oriented industries. Over time, accentsshifted to capital-intensive high-tech industries. At the moment, the main goal of such countries within the framework of the current economic strategy is the production of products that can be described as science-intensive. In turn, unprofitable and labor-intensive industries are given to the newly industrialized countries of the second wave.
Thus, we can conclude that the economic strategy of a particular industrial country determines its place in the world market.
