AS A Level Business: Industrialisation

It is often taken for granted in developing economies like Zimbabwe that one of the macroeconomic goals the government has to pursue is industrialisation
Industrialisation is a term that is used to explain the increasing importance of the secondary and tertiary sectors of the economy
In developing countries such as Zimbabwe, the economy is usually dominated by primary based businesses (the primary sector as it is sometimes called)
The bulk of the country’s Gross Domestic Product usually comes from this sector
Such countries are called developing or unindustrialised
Industrialisation refers to the process,where in such an economy, the secondary and tertiary sectors become increasingly important
It is characterised by an increase in the number, size and complexity of industries within the economy and the growth of the service sector
An increasing number of people become employed in secondary and tertiary sectors instead of the primary sectors usually composed of agriculture and mining
The amount of output from the tertiary and secondary sectors also continues to increase as measured by contribution to GDP

There is an increase in the Gross Domestic Product (GDP) i.e. there is economic growth
This is often accompanied by an increase in the standards of living as everyone gets in on the country’s/economy’s prosperity
There is an increase in employment opportunities
There is an improvement in the balance of payments (BoP) which is often caused by trade imbalances brought about by trading with more industrialised nations which often export less high-value goods and services
An increase in foreign currency earnings from increased export value
The government can raise more taxes
This will allow it to increase social spending

Industrialisation is not without its disadvantages. Some of these demerits include:

Often industrialisation is associated with increased pollution including air, land and water pollution as happened in China
Can lead to rapid urbanisation which comes with social problems such as homelessness, degradation of morals and social decay
Leads to the destruction of the extended family model
Often comes with unequal distribution of wealth as the gap between the rich industrial class and the poor widens
Can actually lead to increased unemployment if it involves automation of repetitive tasks e.g. farmworkers may lose out to combined harvesters

Is when the importance of both the tertiary and secondary industries within an economy
Often this involves the reduction of industrial activity/operations within a given region in developed countries
Deindustrialisation is usually a very much localised affair rather than involving the entire economy/all regions
The city of Detroit in the United States is a perfect case study of deindustrialisation
In the mid-twentieth century, Detroit was one of America’s prime cities with a population of millions and a thriving industry
Now it is a former shell of itself and facing urban decay and a whithering industry
Deindustrialisation is often caused by industries moving away from a given region

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