Why there is industrialization in developing countries?

There is more industrialization in the developing countries than the developed countries because
most of the businesses want to get their products produced from the developing countries. Even the
businesses which are operating in Europe and North America want their products to be produced
from the developing countries.

Businesses in developed countries want their products to be produced from the developing
countries because the cost of production in the developing countries is very low.

They can increase their profits by decreasing their costs.

There are also some other reasons for getting their products developed from the developing
countries:

Get market access

Build good ties with other countries
Avoid strict environmental laws in the developed countries

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industrialization
Process of converting to a socioeconomic order in which industry is dominant. The
changes that took place in Britain during the Industrial Revolution of the late 18th and
19th century led the way for the early industrializing nations of western Europe and
North America. Industrialization entailed both technology and profound social
developments. The freeing of labourers from feudal and customary obligations created
a free market in labour, with a pivotal role for the entrepreneur. Cities attracted large
numbers of people, massing workers in new industrial towns and factories. Later
industrializers attempted to manipulate some of the elements: the Soviet Union
eliminated the entrepreneur; Japan stimulated and sustained the entrepreneur's role;
Denmark and New Zealand industrialized primarily by commercializing and
mechanizing agriculture.
For more information on industrialization, visit Britannica.com. Britannica Concise Encyclopedia. Copyright 19942008 Encyclopdia Britannica, Inc.

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Warning! The following article is from The Great Soviet Encyclopedia (1979). It might
be outdated or ideologically biased.

Industrialization
the creation of large-scale machine-based production in all sectors of the national
economy, especially manufacturing. Industrialization assures the predominance of
production of manufactured goods in a countrys economy and makes possible the
transformation of an agrarian or mostly agrarian country into a predominantly industrial
country. The production relations prevailing in a country determine the nature, rate,
sources of capital, purposes, and social consequences of industrialization.
Capitalist countries. Industrialization in capitalist countries is the creation of largescale machine-based production and of a material-technical base under conditions of
the domination of capitalist production relations. The prerequisites of capitalist
industrialization are linked to the primitive accumulation of capital, to forcible
expropriation of direct producers, to intensification of the exploitation of the working
people, and to the formation of a free labor force. The establishment of the practical
conditions for capitalist industrialization coincided with the industrial revolution in the
last third of the 18th century and the first quarter of the 19th century in Great Britain and
subsequently in other countries of Europe and in the USA. In the course of the industrial
revolution, industry of the factory-plant type emerged, supplanting small-scale craft
production and hand manufacture of goods.
Capitalist industrialization, as the history of a number of countries has shown, is of a
contradictory and often prolonged nature. The development of individual sectors of
industrial production is uneven and is periodically interrupted by economic crises. The
time and rate of industrialization differ in various countries. Only in Great Britain did the
industrial revolution and capitalist industrialization roughly coincide. By the middle of the
19th century, this country had already been transformed into an industrially developed
country (the workshop of the world), supplying other countries with industrial products.
Industrialization extended over decades in Germany, France, and the USA. Germany
was transformed into an industrial-agrarian country by the end of the 19th century and
France by the beginning of the 1920s. In Russia, industrialization began in the last
decades of the 19th century but was not completed under the conditions of a bourgeoislandlord social system.
The rate of industrialization under capitalism depends on such factors as the amount of
accumulated capital, the availability of a reserve army of labor, the capacity of the
internal market, and the level of technical progress. The sources of capital to implement
industrialization under capitalism are exploitation of the countrys toiling masses and
colonial peoples, robbery of other countries as a result of military conquests and
imposition of indemnities, and internal and external loans. The history of large-scale
industry in Great Britain serves as an example of the accumulation of capital for
industrialization through merciless exploitation of the toiling masses of ones own
country and the colonial peoples.
Capitalist industrialization usually begins with light industry, because less capital
investment is required than in heavy industry and the capital turnover is faster, with the
result that profits are bigger. The transfer of resources from light to heavy industry
begins only after a certain time has passed and the necessary level of productive forces
has been achieved on the basis of new discoveries and inventions, the need has
developed for large quantities of metal, fuel, and other products of heavy industry, and
capital has been accumulated. Thus, in Great Britain, where industrialization began with
the cotton-textile industry, products of light industry were dominant in the overall output
of industry as late as the 1870s. In Germany, which began industrialization after the

Revolution of 184849, swift development occurred solely in light industry for decades.
Only after the Franco-Prussian War of 187071 and the large indemnity that Prussia
subsequently received was there a notable transfer of capital into the sectors producing
the means of production. The predominance of light industry in the first stage of
industrialization was also observed in the USA in the first half of the 19th century, in
Russia right up to the Great October Socialist Revolution, and in Japan in the early 20th
century.
The second half of the 19th century was marked by the significant growth of large-scale
machine-based production in many countries. The basis of industrializationthe output
of the means of productionwas quickly created; the output of the means of production
grew to surpass the production of consumer goods, an essential condition for extended
reproduction.
Capitalist industrialization is carried out in the interests of the bourgeoisie. It leads to a
strengthening of the economic and political domination of capital over hired labor, to the
rise of unemployment, to intensification of the exploitation of the working masses, and
to the sharpening of all the contradictions of capitalism. This is particularly true as
capitalism enters its highest and final stageimperialism. The most important social
consequences of capitalist industrialization in the stage of imperialism are intensification
of the unevenness of growth of individual countries and sectors of production, restraints
of the imperialist powers on the economic development of colonial and dependent
countries, militarization of the economy, and expansion of the exploitation of industrial
workers and the entire mass of toilers. At the same time, the development of largescale industrial production means a rapid growth of the proletariat and its concentration
in cities and industrial regions. The concentration of the proletariat creates the
preconditions for the growth of proletarian consciousness and organization, including
the formation of the proletariat as a class and the emergence of its political parties.
Industrialization increases the productivity of social labor and the rate of growth of
production in all sectors of the economy and expands the productive forces of society.
Since the 1950s the modern scientific-technical revolution has been spreading,
favorably influencing the further course of industrial development of many capitalist
countries. However, in capitalist conditions, use of the advances of the scientifictechnical revolution is limited. Such advances can be directed to the service of
production only to the extent that they assure extraction of maximum profits by the
owners of the means of production.
Socialist countries. Socialist industrialization arises from the need for the creation and
development of large-scale machine production in all sectors of the economy,
particularly in heavy industry; the emphasis on heavy industry ensures the basic
reconstruction of the economy on the basis of modern technology under the dominance
of socialist productive relations. Socialist industrialization is not essential for all
countries building socialism; its desirability depends on the general level of
development and the sectorial structure of the economy.
The content and means of industrialization under socialism were scientifically
formulated by V. I. Lenin. At the Eighth All-Russian Congress of Soviets (1920), Lenin
said: Only when the country has been electrified, and industry, agriculture, and
transport have been placed on the technical basis of modern large-scale industry, only
then shall we be fully victorious (Poln. sobr. soch., 5th ed., vol. 42, p. 159). With the
victory of the proletarian revolution in Russia, a disparity emerged between the new
advanced political structure and the old backward technical-economic base.
Strengthening of the positions of socialism and completion of rehabilitation of the
national economy brought the task of industrialization into the forefront. At its
Fourteenth Congress (December 1925) the Communist Party proclaimed the course of
industrialization of the country as the general line of economic construction. The
congress issued a directive to maintain a course for industrialization of the country and

development of output of the means of production (KPSS v rezoliutsiakh, 8th ed., part
3, 1970, p. 247).
During implementation of the policy of industrialization, the party carried on a struggle
both with right-wing deviationists, who were opposed to industrialization, and with leftwing adventurists demanding superindustrialization.
Socialist industrialization is carried out in a planned manner. It ensures the creation and
development of the material-technical base of socialism, the rapid growth of productivity
of labor, the extended socialist reproduction of material welfare, and the reproduction of
socialist social relations. Socialist industrialization in the USSR was characterized by
accelerated growth of heavy industry, particularly the production of machines and
equipment. This growth rate was explained by the initial technical and economic
backwardness of the Soviet Union. The Soviet state found itself encircled by capitalist
states. All this demanded a swift rate of industrialization.
The USSR was industrialized during the fulfillment of the prewar five-year plans. During
this period, 9,000 major state industrial enterprises equipped with advanced technology
were put into operation. Thousands of other enterprises underwent fundamental
reconstruction. New sectors of industry were created, including tractor, motor vehicle,
machine-tool construction, and aviation sectors. Qualified staffs of workers, engineers,
and technicians emerged. The output of industrial products expanded rapidly. In 1940
the gross output of industry in the USSR had grown 6.5 times over the 1928 level, with
a ten-fold increase in output of the means of production. Industry became the dominant
sector of the national economy. The production of machines grew exponentially. In
1937 more than 80 percent of the industrial products were from new enterprises. In
volume of industrial production, the USSR in 1937 took over first place in Europe and
second place in the world. The USSR had been transformed from an agrarian country
into an industrial power, possessing a mighty industry independent of the capitalist
countries.
Industrialization had enormous importance in strengthening the defense capacity of the
country. Soviet industry proved its superiority to the industry of fascist Germany during
the Great Patriotic War (194145). Industrial development continued after the war. In
1971 industrial production of the USSR had increased 99 times over the 1913 level,
including a 230-fold increase in the output of the means of production and a 33-fold
increase in consumer goods. In comparison with 1940, industrial production of the
USSR had risen 12.8 times. Labor productivity in the industry of the USSR was up 19.6
times in 1971 over the 1913 level.
Industrialization was carried out in the USSR exclusively on the basis of internal
sources of accumulationprofits from nationalized industrial enterprises, transportation,
external and internal trade, and banks. For the accumulation of capital, very severe
economies were essential in all sectors of production and consumption, and
mobilization of the resources of the population was also vital (through internal loans,
price policy, the tax system, and so on). The program of the CPSU emphasizes:
Industrialization of the USSR was a great achievement of the working class and all the
people, who spared neither energy nor means and willingly endured deprivation to drag
the country out of backwardness (1971, p. 13). With development of the economy, the
sources of funds for industrialization changed; the share coming from the state budget
increased and the share from the population diminished.
Directed toward the creation of the material-technical base of socialism, the socialist
transformation of society, and the continuous growth of social wealth and the raising of
the material and cultural life of the working people, socialist industrialization is
accompanied by a steady growth of the welfare of the masses. Socialist industrialization
creates the material base for development of the socialist form of economy, the socialist
transformation of small-scale commodity production in general and agriculture in
particular, the final liquidation of capitalist elements, an increase in the numbers and

improvement of the skills of the working class, and a strengthening of the union
between the working class and the peasantry.
Socialist industrialization created the material prerequisites for carrying out the cultural
revolution in the USSR. Industrialization was a major factor in the economic and cultural
upsurge in the countrys formerly backward regions. It contributed to the creation of
modern industry in the outlying parts of the country and to the formation among the
nationalities of working-class specialists and a technical intelligentsia. It also contributed
to the liquidation of the economic and cultural inequalities between the nationalities that
were inherited from the pre-revolutionary past. In this manner, socialist industrialization
was one of the most important means of implementing Leninist nationality policies.
Heavy industry is the base for the development of all sectors of the economy and for
the construction of cultural-educational institutions, housing, and domestic-service,
facilities serving the needs of the working people. Expansion of social production makes
possible the raising of the living standards of the working people and the growth of their
real incomes, as well as allowing a decrease in prices for goods and a reduction of the
workday. Successes in industrial development play an important role in the creation of
the material-technical base of communism.
Of the other countries entering on the path to socialism, only Czechoslovakia and the
German Democratic Republic had an already established large-scale industry. Their
industry is developing further on the base of more modern technology, and attention is
being given to the need to improve the structure of the economy and the distribution of
productive forces. The other countries were economically backward or semideveloped.
The conditions for industrialization in foreign socialist countries are better than those
that existed in the USSR. The existence of the world socialist system and the
international division of labor allows the specialization of an individual country in the
output of certain products and for cooperation in production and the development of
other economic ties. The comprehensive program for further deepening and
improvement of cooperation and development of socialist economic integration of the
member countries of the Council for Mutual Economic Assistance (Comecon), adopted
in August 1971 at the 25th Comecon session, will assist in furthering the all-round
economic closeness of these countries. The prior example set by the USSR and its
unselfish aid to the other socialist countries are of great significance.
Table 1 shows the successes of socialist industrial development and its superiority over
capitalist industrialization.
Table 1. Growth of industrial in socialist and Other countries (1950 = 100)

World Socialist
countries

other countries
Developed capitalist
countries

Developing
countries

Total

1960
..........

208

354

162

233

169

1971
..........

401

783

282

489

299

In 1971 the volume of industrial production of the socialist countries was approximately
14 times greater than in the same territory in 1937. The production of capitalist
countries rose 4.5 times in this same period. The socialist countries accounted for
approximately 39 percent of the total volume of world industrial production in 1971, with
the developing countries accounting for about 7 percent and the advanced capitalist
countries for about 54 percent. The industrial output of the socialist countries in 1971
was about 70 percent of the industrial production of the advanced capitalist countries.
The development of industry is particularly successful in the member countries of

Comecon, where the average annual growth rates of industrial production from 1961 to
1970 were 1.5 times higher than in the capitalist countries.
The continuing industrial growth of the USSR and other socialist countries is aided by
the development of the modern scientific-technical revolution and the integral
connection of this revolution with the superiorities of socialism.
Developing countries. Industrialization in the developing countries emphasizes the
reconstruction of all sectors of the economy through introduction of industrial methods
of production and modern achievements of science and technology and through
creation of a national industry, thus assuring the achievement of economic
independence and the transformation of the social structure of these countries. In many
countries of Asia, Africa, and Latin America, precapitalist relations still persist, with an
agrarian and raw material orientation of the economy and with foreign capital holding a
strong position. As a result of the many centuries of domination by foreign colonialists,
the level of economic development in these countries is still low.
Extractive and light industries are to a greater or lesser degree the main sectors of
production in these countries. There is almost a total lack of production of the tools of
labor. Industrialization of the developing countries can be carried out only with the
creation of modern industry. The direction, rate, and other specific features of
industrialization depend on the level of economic and cultural development, the extent
of natural resources, the availability of labor reserves, the bases of energy and
transportation, the capacity of the market, and the direction and degree of the growth of
external economic links. Social factors also have great importance, particularly the
economic policies of the government and the alignment and relationship of class forces.
Since attaining independence, the developing countries have already entered the initial
stage of industrialization. In a number of countries, representatives of the national
bourgeoisie have come to power, which has resulted in a capitalist orientation of
industrialization. Other countries have chosen a noncapitalist path of development; that
is, they have set forth on a course of construction guided by socialist principles and
goals.
Industrial production in the developing countries increased 64 percent between 1963
and 1970. In scale and rate, the best results have been achieved by Egypt and India,
where manufacturing industry, including heavy industry, is already taking shape. In
Egypt, capital investment in industry (not including energy) during the years of the
republic had exceeded El billion by 1969, and industry is producing about one-third of
the national income. In India the development of heavy industry is concentrated in
metallurgy and machine building. Industrial output increased 81 percent between 1958
and 1967. The output of steel in 1970 was 6.3 million tons, up from 1.7 million tons in
1955. Countries like Pakistan, Nigeria, Algeria, Syria, Ghana, Tanzania, and Sri Lanka
are currently concentrating on light industry, although individual enterprises in
metalworking, metallurgy, chemistry, and other fields are also being built. In many
Asian, African, and Latin American countries, the first steps are being taken to create a
modern machine-based industry.
The low level of national capital accumulation is a serious brake to the industrialization
of the developing countries. They are compelled to seek foreign loans and credits and
technical assistance. The imperialist powers, striving to monopolize scientific-technical
achievements, are reluctant to invest capital in the industry of developing countries.
However, as a result of the growing cooperation of the latter with the world socialist
system, the capitalist countries have been forced to change their tactics and to
construct industrial enterprises in the developing countries.
The developing countries receive large-scale and unselfish assistance from the USSR
and other socialist countries for the creation of national industry. The 714 enterprises
and other projects under construction or planned for construction in early 1971 in the

developing countries with the technical assistance of the USSR included 31 thermal
and hydroelectric stations; 14 oil extraction, oil refining, and gas enterprises; 13 coal
installations; and 30 metallurgical and 55 machine-building and metalworking projects.
Industrialization in the developing countries is accompanied by a sharp class struggle.
The expanding and increasingly powerful working class, with the support of all the
toiling masses, is being forced to overcome the serious opposition of local feudallandowner circles and also of the bourgeoisie, especially those elements closely linked
to foreign monopolies.