Industrialisation (or industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an economy for the purpose of manufacturing.
As industrial workers' incomes rise, markets for consumer goods and services of all kinds tend to expand and provide a further stimulus to industrial investment and economic growth.
After the last stage of the Proto-industrialization, the first transformation from an agricultural to an industrial economy is known as the Industrial Revolution and took place from the mid-18th to early 19th century in certain areas in Europe and North America; starting in Great Britain, followed by Belgium, Switzerland, Germany, and France.Characteristics of this early industrialisation were technological progress, a shift from rural work to industrial labor, financial investments in new industrial structure, and early developments in class consciousness and theories related to this. Later commentators have called this the First Industrial Revolution.
The "Second Industrial Revolution" labels the later changes that came about in the mid-19th century after the refinement of the steam engine, the invention of the internal combustion engine, the harnessing of electricity and the construction of canals, railways and electric-power lines. The invention of the assembly line gave this phase a boost. Coal mines, steelworks, and textile factories replaced homes as the place of work.
By the end of the 20th century, East Asia had become one of the most recently industrialised regions of the world.The BRICS states (Brazil, Russia, India, China and South Africa) are undergoing the process of industrialisation.
There is considerable literature on the factors facilitating industrial modernisation and enterprise development.
Between the early 1960s and 1990s, the Four Asian Tigers underwent rapid industrialization and maintained exceptionally high growth rates.
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As the Industrial Revolution was a shift from the agrarian society, people migrated from villages in search of jobs to places where factories were established. This shifting of rural people led to urbanisation and increase in the population of towns. The concentration of labour in factories has increased urbanisation and the size of settlements, to serve and house the factory workers.
The leading industries of the world have been dominated by one major factor, exploitation. For example: The enslavement of people of color and immigrants in the United States.
China, along with many other areas of the world run by industrialization, has been affected by the world’s never ending rise of supply and demand. With one of the largest populations in the world, China has become one of the main exporters of objects from household items to high technology appliances.
Family structure changes with industrialisation. Sociologist Talcott Parsons noted that in pre-industrial societies there is an extended family structure spanning many generations who probably remained in the same location for generations. In industrialised societies the nuclear family, consisting of only parents and their growing children, predominates. Families and children reaching adulthood are more mobile and tend to relocate to where jobs exist. Extended family bonds become more tenuous.
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As of 2018 [update] the "international development community" (World Bank, Organisation for Economic Co-Operation and Development (OECD), many United Nations departments, and some[ which? ] other organisations)[ citation needed ] endorses development policies like water purification or primary education and co-operation amongst third world communities. Some members of the economic communities do not consider contemporary industrialisation policies as being adequate to the global south (Third World countries) or beneficial in the longer term, with the perception that they may only create inefficient local industries unable to compete in the free-trade dominated political order which industrialisation has fostered.[ citation needed ] Environmentalism and Green politics may represent more visceral reactions to industrial growth. Nevertheless, repeated examples in history of apparently successful industrialisation (Britain, Soviet Union, South Korea, China, etc.) may make conventional industrialisation seem like an attractive or even natural path forward, especially as populations grow, consumerist expectations rise and agricultural opportunities diminish.
The relationships among economic growth, employment, and poverty reduction are complex. Higher productivity, it is argued[ by whom? ], may lead to lower employment (see jobless recovery). There are differences across sectors, whereby manufacturing is less able than the tertiary sector to accommodate both increased productivity and employment opportunities; more than 40% of the world's employees are "working poor", whose incomes fail to keep themselves and their families above the $2-a-day poverty line. There is also a phenomenon of deindustrialisation, as in the former USSR countries' transition to market economies, and the agriculture sector is often the key sector in absorbing the resultant unemployment.
An industry is a sector that produces goods or related services within an economy. The major source of revenue of a group or company is an indicator of what industry it should be classified in. When a large corporate group has multiple sources of revenue generation, it is considered to be working in different industries. The manufacturing industry became a key sector of production and labour in European and North American countries during the Industrial Revolution, upsetting previous mercantile and feudal economies. This came through many successive rapid advances in technology, such as the development of steam power and the production of steel and coal.
The Industrial Revolution, now also known as the First Industrial Revolution, was the transition to new manufacturing processes in Europe and the United States, in the period from about 1760 to sometime between 1820 and 1840. This transition included going from hand production methods to machines, new chemical manufacturing and iron production processes, the increasing use of steam power and water power, the development of machine tools and the rise of the mechanized factory system. The Industrial Revolution also led to an unprecedented rise in the rate of population growth.
Manufacturing is the production of products for use or sale using labor and machines, tools, chemical or biological processing or formulation, and is the essence of secondary industry. The term may refer to a range of human activity from handicraft to high tech but is most commonly applied to industrial design, in which raw materials from primary industry are transformed into finished goods on a large scale. Such finished goods may be sold to other manufacturers for the production of other more complex products, or distributed via the tertiary industry to end users and consumers.
Import substitution industrialization (ISI) is a trade and economic policy which advocates replacing foreign imports with domestic production. ISI is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products. The term primarily refers to 20th-century development economics policies, although it has been advocated since the 18th century by economists such as Friedrich List and Alexander Hamilton.
Rostow's stages of economic growth model is one of the major historical models of economic growth. It was published by American economist Walt Whitman Rostow in 1960. The model postulates that economic growth occurs in five basic stages, of varying length:
Modernization theory is used to explain the process of modernization within societies. Modernization refers to a model of a progressive transition from a 'pre-modern' or 'traditional' to a 'modern' society. Modernization theory originated from the ideas of German sociologist Max Weber (1864–1920), which provided the basis for the modernization paradigm developed by Harvard sociologist Talcott Parsons (1902–1979). The theory looks at the internal factors of a country while assuming that with assistance, "traditional" countries can be brought to development in the same manner more developed countries have been. Modernization theory was a dominant paradigm in the social sciences in the 1950s and 1960s, then went into a deep eclipse. It made a comeback after 1991 but remains a controversial model.
An economy is an area of the production, distribution and trade, as well as consumption of goods and services by different agents. Understood in its broadest sense, 'The economy is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of resources'. A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of human practices and transactions. It does not stand alone.
The Great Divergence or European miracle is the socioeconomic shift in which the Western world overcame pre-modern growth constraints and emerged during the 19th century as the most powerful and wealthy world civilization, eclipsing Mughal India, Qing China, the Islamic World, Joseon Korea, and Tokugawa Japan.
Nicholas Francis Robert Crafts CBE is Professor of Economics and Economic History at the University of Warwick, a post he has held since 2005. Previously he was a Professor of Economic History at London School of Economics and Political Science (LSE) between 1995-2005. He also teaches for the TRIUM Global Executive MBA Program, an alliance of NYU Stern, the LSE and HEC School of Management. His main fields of interest are the British economy in the last 200 years, European economic growth, historical data on the British economy, the Industrial Revolution and international income distribution, especially with reference to the Human Development Index. He has produced a substantial body of papers for academic journals, the British government and international institutions such as the International Monetary Fund.
Chinese industrialization refers to the process of China undergoing various stages of industrialization with a focus on the period after the establishment of the People's Republic of China where China experienced its most notable growths in industrialization. Although Chinese industrialization is largely defined by its 20th-century campaigns, China has a long history that contextualizes the proto-industrial efforts, and explains the reasons for delay of industrialization in comparison to Western countries. In 1952, 83 percent of the Chinese workforce were employed in agriculture. The figure remained high, but was declining steadily, throughout the early phase of industrialization between the 1960s and 1990s, but in view of the rapid population growth this amounted to a rapid growth of the industrial sector in absolute terms, of up to 11 percent per year during the period. By 1977, the fraction of the workforce employed in agriculture had fallen to about 77 percent, and by 2012, 33 percent.
Industrialization in the Soviet Union was a process of accelerated building-up of the industrial potential of the Soviet Union to reduce the economy's lag behind the developed capitalist states, which was carried out from May 1929 to June 1941.
Proto-industrialization is the regional development, alongside commercial agriculture, of rural handicraft production for external markets. The term was introduced in the early 1970s by economic historians who argued that such developments in parts of Europe between the 16th and 19th centuries created the social and economic conditions that led to the Industrial Revolution. Later researchers suggested that similar conditions had arisen in other parts of the world. Most aspects of the theory have been challenged by other historians.
The Indian economy under the British Raj describes the economy of India during the years of the British Raj, from 1858 to 1947. According to historical GDP estimates by economist Angus Maddison, India's GDP during the British Raj grew in absolute terms but declined in relative share to the world.
The United Kingdom, where the Industrial Revolution began in the late 18th century, has a long history of manufacturing, which contributed to Britain's early economic growth. During the second half of the 20th century, there was a steady decline in the importance of manufacturing and the economy of the United Kingdom shifted toward services. Manufacturing, however, remains important for overseas trade and accounted for 44% of goods exports in 2014. In June 2010, manufacturing in the United Kingdom accounted for 8.2% of the workforce and 12% of the country's national output. The East Midlands and West Midlands were the regions with the highest proportion of employees in manufacturing. London had the lowest at 2.8%.
Urbanization in India began to accelerate after independence, due to the country's adoption of a mixed economy, which gave rise to the development of the private sector. Urbanisation is taking place at quite a rapid rate in India. Population residing in urban areas in India, according to 1901 census, was 11.4%. This count increased to 28.53% according to 2001 census, and crossing 30% as per 2011 census, standing at 31.16%. In 2017, the numbers increased to 34%, according to The World Bank. According to a survey by UN State of the World Population report in 2007, by 2030, 40.76% of country's population is expected to reside in urban areas. As per World Bank, India, along with China, Indonesia, Nigeria, and the United States, will lead the world's urban population surge by 2050.
This article delineates the history of industrialisation.
This article delineates the history of modernisation theory. Modernisation refers to a model of a progressive transition from a 'pre-modern' or 'traditional' to a 'modern' society. The theory looks at the internal factors of a country while assuming that, with assistance, "traditional" countries can be brought to development in the same manner more developed countries have. Modernisation theory attempts to identify the social variables that contribute to social progress and development of societies, and seeks to explain the process of social evolution. Modernisation theory is subject to criticism originating among socialist and free-market ideologies, world-systems theorists, globalisation theorists and dependency theorists among others. Modernisation theory not only stresses the process of change, but also the responses to that change. It also looks at internal dynamics while referring to social and cultural structures and the adaptation of new technologies.
Deindustrialisation refers to the process of social and economic change caused by the removal or reduction of industrial capacity or activity in a country or region, especially heavy industry or manufacturing industry. It is the opposite of industrialisation. Deindustrialisation has taken place in many nations over the years, as social changes and urbanisation have changed the financial demographics of the world. Phenomena such as the mechanisation of labour render industrial societies obsolete, and lead to the de-establishment of industrial communities.
Raphael Kaplinsky, is professorial fellow, Science Policy Research Unit, and emeritus professorial fellow, Institute of Development Studies, University of Sussex.
Engels' pause is a term coined by economic historian Robert C. Allen to describe the period from 1790 to 1840, when British working-class wages stagnated and per-capita gross domestic product expanded rapidly during a technological upheaval. Allen named the period after German philosopher Friedrich Engels, who describes it in The Condition of the Working Class in England. Economists have analyzed its causes and effects since the nineteenth century, with some questioning its existence. Twenty-first-century technological upheaval and wage stagnation have led economists and academics to draw parallels between the two periods.