The process whereby industrial activity comes to play a dominant role in the economy of a region or nation-state. Historically, industrialization has involved a more complex division of labour and the spread of mechanized production (machinofacture) in place of hand production (manufacture). These changes brought about a transformation in what Karl Polanyi called the form of economic integration, from the reciprocity of a moral economy to the market exchange of capitalism. In certain Western societies, industrialization took place spontaneously, small-scale domestic production for local consumption being replaced by larger-scale ‘factory’ production aimed at more distant markets. For Adam Smith, such industrialization formed part of the ‘natural progress’ of economic development, founded on the production of agricultural surpluses, but ultimately leading to specialist industrial regions and to international trade. Growth was organic, and the shift to mechanized production, prompted by supply being outstripped by growing demand, was dependent upon the development of appropriate technology and the accumulation of capital for investment (Berg, 1994).
As part of modernization theory, such readings of the past were instrumental in linking industrialization with development and in its portrayal as a solution to poverty in the developing world (Power, 2003). As a result, many less-developed countries made industry central to their development strategies. This planned (rather than spontaneous or ‘organic’) industrialization has generally taken one of two forms: (a) import substitution, wherein governments encourage the development of indigenous manufacturing to produce consumer goods for the domestic market, or (b) export-orientated industrialization, which aims to enhance production for overseas markets. In the 1950s and 1960s, Western governments favoured import substitution as a development strategy for the third world. Influenced by the theories of Rostow and others (see stages of growth) – which accorded a pivotal role to the availability of investment capital – they provided loans to developing countries to facilitate industrial development. The problems of such strategies were thrown into stark relief by the economic crises of the 1970s. The infusion of capital, technology and business organization from outside brought with it problems of dependency, most obviously manifest in the mounting debts of many developing countries (Schurmann, 2001). More fundamentally, Marxist scholars challenged the ‘development myth’ by emphasizing the inevitability of uneven development under capitalism.
In recent years there has been a rearticulation of modernization theory, partly through the rhetoric of globalization, which now points to the experience of developing countries experiencing rapid industrialization. Most striking are the so-called asian miracle/tiger economies of South-East Asia, where the rate of industrial growth – much of it fuelled by export-orientated industries drawing on abundant cheap labour – has far exceeded that of europe during the industrial revolution. China has industrialized particularly rapidly and, in doing so, has highlighted many of the mounting ecological problems associated with industrial growth. In addition to those of pollution of land, sea and air, is the more fundamental question of the sustainability of industrialization based on finite mineral resources (Phillips and Mighall, 2000). What the example of South-East Asia also shows is the emergence of service activities as an alternative source of employment and route to economic development (cf. services).
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