Industrial countries had a more than tangible impact on the global economy. They moved progress and changed the status of specific regions. Therefore, the history and features of these states deserve attention.
What is meant by industrialization
When this term is used, it is an economic process, the essence of which is reduced to the transition from agrarian and craft to large-scale machine production. It is this fact that is the key sign 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 passes into an extensive mode. The transition of a particular country to the industrial category is due to the influence of such factors 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 industrial country is the product of competent reforms in the field of legislation and policy. At the same time, of course, it cannot do without the formation of a significant raw material base and the attraction of a large number of cheap labor.
A consequence of such processes is the fact that the secondary (primary processing sector) begins to prevail over the primary sector of the economy (agriculture, resource extraction). Industrialization contributes to the dynamic development of scientific disciplines and their subsequent introduction into the production segment. This, in turn, allows you to 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 at the forefront of the industrial movement. In the late 19th and early 20th centuries, a large base was created here for dynamic industrial growth, which was facilitated by a significant influx of labor. The components of this base were significant raw materials, the lack of obsolete equipment and absolute freedom for economic activity.
Considering the history 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 contributed to this fact.
An industrial country such as the United States is interesting in that it was it that 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 other indicators of total industrial production. Other countries were able to reach this level much later.
Another change that an industrial country must inevitably make concern political and legislative sphere. At the same time, the need for a sufficient amount of cheap labor and raw materials is inevitable.
One of the key goals of production within the framework of the industrial economy is the production of as many finished products as possible. As a result, significant volumes of goods allow companies to enter the world market.
US Heavy Industry Restructuring
Considering that North America is the territory where the industrial country, which became the first in this format of the economy, survived its formation, it is worth noting the following information: similar changes were achieved through changes in the structure of the heavy industry of the United States.
We are talking about the impact of scientific and technological progress, which has led to the emergence and development of new industries such as oil, aluminum, electrical, rubber, automobile, etc. Moreover, automobile production and oil refining have had the most significant impact on the development of the American economy.
Since electric lighting was quickly introduced into everyday life and production, kerosene rapidly lost its relevance. At the same time, demand for oil was steadily growing. This fact is explained by the dynamic development of the automotive industry, which inevitably led to an increased volume of purchases of gasoline, for the production of which oil was used.
It is worth noting the fact that it was the introduction of the car into the life of US citizens that had a significant impact on the structure of production, allowing the refining industry to become dominant.
Changes were experienced and the methods of rational organization of labor. The development of mass serial production had a key influence on this process. This is primarily about the flow method.
Thanks to these factors, the United States 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 counted among the industrial ones. If we consider the industrial countries of the 20th century, then we can distinguish two waves of modernization. These processes can also be called organic and catching up development.
First-tier countries include the USA, Great Britain, France and other small European states (Scandinavian countries, Holland, Belgium). The development of all these countries was marked by a gradual transition to an industrial type of production. First, an industrial revolution took place , followed by the transition to mass and large-scale production of the conveyor type.
The formation of such processes was preceded by certain cultural and socio-economic prerequisites:
- a high level of development of manufactory production, which was primarily affected by modernization;
- the maturity of commodity-money relations, leading to the maturity of the domestic market and its ability to absorb significant volumes of industrial production;
- a tangible layer of poor people who are not able to earn in any other way than providing their services as a workforce.
The last point can be attributed to 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 due to the influence of certain factors was somewhat belated.
Despite the fact that many countries moved in the direction of industrialization, the development of all states had common features. A key characteristic in this case was the significant influence of the government during the modernization period. 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 that 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 industrial countries have always been characterized by a significant share of state participation in the modernization process, it is worth paying attention to such a factor as the need to introduce increased customs duties on import of imported products. Such measures could only be carried out at the level of legislation. And thanks to a similar 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 was the lack of funds from enterprises to finance production. The weakness of domestic capital was offset by budgetary funds. This was expressed in financing the construction of factories, factories 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 in Japan, Russia and Austria-Hungary.
The place of industrial countries in the modern economy
The modernization process did not stop developing. Thanks to this, new industrial countries managed to form. List Theirs is as follows:
- 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 Asian tigers. Throughout the 80s, each of the states listed above has shown its ability to ensure annual economic growth with a mark above 7%. Moreover, they were able to quickly overcome the socio-economic underdevelopment and get closer to the level of countries that can be defined as developed.
The criteria by which industrial countries are determined
The UN constantly monitors the situation in the world, paying particular attention to the economic development of various regions. This organization has certain criteria by which they define new industrial countries. A list of them can be replenished only by a state that meets certain standards in the following categories:
- the volume of exports of industrial products;
- the size of the 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 rates.
For each of these criteria and for all the total industrial countries, the list of which is growing steadily, 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 new industrial countries.
If we talk about external factors of economic growth that are characteristic of all countries, then first of all, attention should be paid to the following fact: no matter what 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 interest shown by the United States towards South Korea and Taiwan. This is explained by the fact that these regions contribute to the opposition to the communist regime that prevails in 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 focused on foreign investment.
As for the South Asian countries, their progress is due to the active support from Japan, which in recent decades has opened numerous branches of corporations that create new jobs and raise the level of industry as a whole.
It is worth noting the fact that in the new industrial 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 the investment was focused not only on the manufacturing industry, but also on the service sector, as well as trade.
Moreover, one cannot but notice the fact of global economic expansion of foreign private capital. That is why industrial countries, in addition to their own resources, in fact, in each economic sector have a certain percentage of foreign capital.
Latin American NIS Model
In the modern economy, two key models are distinguished through which one can characterize the structure and principles of development of modern industrial countries. It is about the Latin American and Asian system.
The first model is focused on import substitution, the second focus is on export. In other words, some countries are oriented to the domestic market, while others receive the bulk of capital through export.
This is one of the answers to the question why industrial countries, in addition to exporting goods, are actively oriented towards import substitution. It all comes down to using a specific model. It is worth noting that the strategy of saturating the domestic market with a national product has helped many states to obtain economic progress. To do 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 significantly increased.
In fact, in every country that has emphasized the development of production, which allows for efficient substitution of imported goods, a serious crisis is recorded over time. As the reasons for this outcome, it is worthwhile to determine 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.
An example is 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 within the global market. But they still failed to catch up with export-oriented developed countries in their level of economic progress.
Asian experience
The export-oriented model that was implemented by NIS Asia can be defined as the most efficient and flexible enough. At the same time, it is worth noting the fact of parallel import substitution, which competently combined with the basic scheme of economic development. Surprisingly, as it turned out, two models with different accents can be combined quite effectively. Moreover, depending on the specific period, priority may be given to the most relevant of them.
But the fact that before the state moves to the stage of dynamic export expansion, it must undergo import substitution and competently stabilize its percentage in the general economic model, remains unchanged.
Asian NIS was characterized by the development of labor-intensive export-oriented industries. Over time, the emphasis shifted to capital-intensive high-tech industries. At the moment, the main goal of such countries in the framework of the current economic strategy is to produce products that can be described as high-tech. In turn, unprofitable and labor-intensive industries are given to the new industrial countries of the second wave.
Thus, we can conclude that its place in the world market depends on the economic strategy of a particular industrial country.