Industrialization Flashcards
(20 cards)
Define industry
Industry refers to a manufacturing factory that processes raw materials into finished goods
What is industrialization
~Is a process of whereby the number of factories(Industries) in a country increases and the use of modern technology to improve production
~ the level at which the country has developed its Industries
What are the three main processes of industrialization
~Inputs needed in an industry
• raw materials
• capital goods such as machinery and factory building
• money capital
• labor which is people to do work
~ manufacturing process
• complex technology
• power example electricity
• division of labor which is each worker specializing in a particular part of the work for mass production (to increase production)
~ outputs in an industry
• finished on manufactured goods which are ready to be used by consumers
• products for further processing: additional products that came out of the manufacturing process but which are for no use to the manufacturer
• waste products which are products that cannot be used for further processing
What are three events that led to industrialization
- Mercantilism - the belief that a country’s power depends on having (accumulating) more wealth in the form of gold and silver
• people who travel to other countries to do business were called merchants - Colonialism - due to an increase in mercantilism European countries decided to have colonies in America Asia and Africa for them to extract gold and silver and other raw materials and make them markets for their manufactured products
- Industrial Revolution - a period in Britain when the number of factories (Industries) increased. Goods were produced on a large-scale with more use of machine than hands.
What are factors that led to the industrial revolution in Britain
a) availability of workers - advanced in agricultural technology meant that fewer Farm workers were needed to produce food for the Nations. As a result, more workers where available to work in factories
b) availability of money to buy machinery and expand business - merchants who profited from early overseas trade had money to invest
c) availability of raw materials, such as coal, cotton, water - the head colonies from which to take resources
d) invention of new technology likes steam engines
What is meant by neocolonialism
A new way of colonialism whereby developing countries are politically independent but economically depending on the developed countries
Describe how neocolonialism takes place
~ through trade policies - developing countries sell primary goods / raw materials to developed countries at the cheaper price and buy finished goods at a higher price
~ by inviting mncs - the invest money in developing countries and use their Resource and cheap labor, but send a large sum of profit to their motherland
~ through loans - the south / developing countries get loans from the North / developed countries but they paid back with high interests
Through aid (tied aid) - a developed country can give a loan to a developing country with conditions attached to it
Identify with examples from specific Industries the characteristics of modern industrial production
~ complex machinery and advanced technology
• modern industrial machinery often computer controlled
• many robotic machines
• require skilled computer technicians
E.g. precision machinery in a motor vehicle assembly plant
~ wide range of raw materials and components
• all parts of a final product must be supplied
• assembly often requires many components
• important to have good transport and communications
• partnerships important to ensure supplies of components
~ the complex division of labor in industry
• different tasks assigned to different people or teams in a factory
• assignment often depend on skills and training
E.g. one person may be trained to operate a specific type of machine
~ Co-ordination of specialised tasks
• managers in supervisors ensure all tasks come together for a final product
• imported for duties to be fully understood
• top managers must know the full picture
What are the two main types of industries
a) Heavy industry: an industry that uses heavy raw materials and heavy equipment
E.g. Mining
b) light industry: an industry that uses lighter raw materials and produces consumer goods
E.g. electrical goods, processed food
Different types of manufacturing Industries
• consumer Industries: reduce goods for direct consumption that are sold to the public
• producer Industries: make goods for further industrial use
Describe the different strategies for industrialization by evaluating the advantages and disadvantages
a) import substitution strategy (ISS)
• develop Industries which produce goods that local people can buy on a regular basis rather than importing them
E.g. Namibia can stop buying cars from other countries and start to produce its own cars
~Advantages of ISS
• the country becomes self-reliant by reducing dependence on other countries
• people can support local businesses or Industries, it protects local industry
• saves foreign exchange
• increases local jobs or creating employment opportunities
~Disadvantages of ISS
• local customers are denied the opportunity to buy best quality products from other countries
• local goods are usually expensive compared to subsidized goods from developed countries
• domestic Industries are protected from outside competition in this makes them reluctant to produce quality products ( promotes inefficiency)
b) export oriented strategy (EOS)
• strategy that encourages local Industries to make products which are in a high Demand on the world market, for export to other countries
~ Advantages of EOS
• a country can acquire foreign exchange from others
• a country can improve its balance of trade (positive balance of trade) by exporting more goods to other countries
• brings in foreign investment
• create employment opportunities to the Citizens
~ Disadvantages of EOS
• Industries sometimes rely on government to subsidize their business
• produces mainly for export and neglecting local customers
• top quality products are exported and lower quality goods are sold locally
c) large scale versus small scale production
~ Large scale: a country should produce goods on a large skills so there’s enough for local consumption and the remaining can then be exported
~ small scale: a country should also have Industries producing on a small scale for the local consumption only but that can slowly develop into large-scale companies
~Advantages of large scale Industries
• brings in foreign investment
• create jobs
• exports earn foreign currency
~ Disadvantages of large scale industries
• Often creates skilled jobs because they are capital intensive and mechanised
• large-scale companies send profits back to their home countries and do not invest
~ Advantages of small scale industries
• create jobs for people of all skilled levels
• don’t need a large investment to start
• can easily start as a part of the informal sector
~Disadvantages of small scale industries
• Often have a limited possibility of growth
• can come under pressure from competitors
Describe the different strategies for industrialization by evaluating the advantages and disadvantages ( multinational companies or transnational companies, local investors or joint enterprisees, state Enterprises or parastatals and public private partnerships)
d) MNCs/TNCs
• MNCs are companies that have businesses in more than one country but their headquarters are usually in developed countries
~Advantages
• employ large numbers of local people
• pay tax to the government
• improve infrastructure like electricity and roads
• offer training to workers that can be useful in other areas of the company
• give bursaries and sponsor Sports
• bring foreign exchange into a country
~ Disadvantages
• the use of machinery often reduces the number of people who are employed
• exploit workers
• may interfere with local politics
• they can close down anytime
• take profit back to headquarters
e) local investors or joint Enterprise
~Advantages
• joint Enterprises ensure some profits stay home
• investors benefit from local expertise
• business can comply with laws of the country
f) state Enterprises / SOE / parastatals
~ Advantages
• all profits go to the government
• access to cheaper products or services
~ Disadvantages
• taxpayers must support them when they make a loss
g) public private partnership
~Advantages
• the skills in assets of the public and private sectors are shared in delivery services
~ Disadvantages
• the private sector partner assume all the risk
Discuss on how the government can promote each strategy for industrialization
~Import Substitution Strategy
• by heavenly texting similar products coming in from other countries
• through quotas by putting up a limit on the amount of products coming in from other countries
• subsidize the infant industries in the country
~ Export Oriented Strategy
• reduce tax or tariff on exporting Industries
• subsidize exporting industries in the country
• government to offer loans to exporting Industries
• encourage foreign investors and joint Ventures
~ MNCs / TNCs
• a country should invite foreign investors to come and invest or do business in the country
~Local Investors or Joint Enterprises
• encourage companies to join each other in order to become stronger and more successful to be able to compete Internationally by exporting to foreign markets
• this process is also called amalgamation
~ state Enterprises or parastatals
• a country should have Enterprises controlled and funded by the government to produce goods or services on a larger scale
~ public private partnership
• government should work closely with private businesses to improve infrastructure
• Development Bank of Namibia or Ministries can fund projects like roads, energy or telecoms
Identify examples of newly industrialized countries
Singapore, South Korea, South Africa, Mexico, Taiwan, Egypt, Malaysia, Thailand, Brazil
Evaluate the role of the state in development of newly industrialized countries
♧ there must be peace (political stability) for a country to industrialize
♧ government should help small businesses by giving them subsidies to reduce cost of production
♧ government should give reward to businesses that are doing well to motivate them and grow stronger
♧ improve the quality of education for people to acquire knowledge on how to produce quality goods and run businesses effectively
♧ invest in the manufacturing Industries
Discuss the importance of key Industries to the Social and economic development of Namibia
a) Mining
~ contributes about 25 to 30% of namibia’s national income. Namibia is rich in minerals like diamonds, uranium, gold, silver zinc, copper limestone
• bring in foreign exchange
• sponsor Sports and cultural activities
• create jobs to people which improves their living standard
• sponsor schools and giving bursaries to students
• hopes develop infrastructures such as roads, electricity and telecommunication
b) Fishing
• it contributes the food security in namibian (food production)
• it provides jobs to people who work in fishing companies
• export of fish earns namibia foreign exchange
• fishing companies pay tax to the government or contribute to GDP
c) Tourism
• create jobs to local people
• earns Namibia foreign exchange
• it helps conserve environment of the Communities through conservancies
What are problems caused by mining
• open cast mining damages natural habitat of living organisms
• mining in the sea disturbs fishery resources
• mining can cause environmental problems such as air, water and soil pollution
• encourage migration which leads to divorce and separation of families as people will leave their homes and family to work in far isolated mines
Suggest possible sustainable ways of increasing outputs in namibian Industries
a) Value added processes
~ this means adding more value to your products before selling. The more or product passes through different stages of production, the more value it gets
b) Foreign investors and joint ventures with local
~Invite foreign companies to work together with namibian companies and form one big company
c) Adoption modern production processes
~ adopt new methods of doing things to increase our output, we should not stick to simple traditional methods of producing goods
d) further research and explorations
~Research allows us to find new ways and ideas of doing things or finding new solutions
~ exploration can help a country discover new resources, Namibia cannot only depend on diamonds and fish, and we must explore and discover new resources like oil, gas and Mercury
What benefit will namibian companies get from making a joint venture with foreign companies
• foreign companies will teach us new skills on how to increase production
• foreign companies have access to technology (capital) that can help improve our production
• foreign companies can help namibian companies to process raw materials into finished goods, and this will add value to our products
• foreign companies have access to international markets, namibian products will have an opportunity to be sold outside the Country
Reasons why modern methods of production are good
♧ they are fast
♧ produce products on a large scale
♧ allows economies of scale to operate ( you can produce many products at a cheaper price)
♧ reduces labor cost
♧ produces quality products
