What Is The Role Of Industry In Economic Development?

4 Answers

Joe Gilbert Profile
Joe Gilbert answered
Industry is the key element in the economic development of any country or region.

In its purest terms, industry is the production of items from raw materials. However, that definition has changed over the generations with industry covering a much wider range of activities.

A growing industrial sector is crucial to greater economic development and takes in a number of areas as a country develops. A good example to demonstrate this is in Scotland, where traditional industries such as shipbuilding and coal-mining have virtually disappeared to be replaced by 'softer' industries such as financial services and tourism.

Ensuring steady industrial growth helps to compliment and sustain continued economic development. If industry is growing at too fast a rate it can become unsustainable, which can create recession. Recession is defined as negative economic growth over a period of time.

A well developed industrial sector, covering various different areas is vital to the economic development of a country. With a variety of different industrial sectors that feed off each other, a well balanced industrial sector is at the centre of economic development.

With a strong industrial base, economic planning becomes less risky, being able to plan ahead also assists industrial growth with profits re-invested into infrastructure development which in turn helps to boost and attract industry. Without a vibrant, strong industrial base economic development is much more risky and can be effected by external factors that are difficult to control.

Providing encouragement and support to industry is essential if it is to grow and develop, supporting start-up industries and encouraging diversity all contribute towards a positive economic climate.

Any economic development plan must have industry at the core. By encouraging and providing for industry, an economy will grow in tandem which in turn encourages further industrial development.
Anonymous Profile
Anonymous answered
The role of industries in the development of rural sector.

Small and Medium-scale industries (SM Is) can play an important role in the process of a country's industrial and economic development. In particular, SM Is can make significant contribution to achieve social and economic objectives such as labour absorption, income distribution, rural development, poverty eradication and balanced economic growth. The agricultural industrial sector plans stresses the need for a self reliant approach to development. Pakistan's 1988-93 Five Year Plan while presenting the general frame work for the country's economic development, recognizes the ex-is
Anonymous Profile
Anonymous answered
Discus the roles of industries in economic development of tanzania from colonial era to the present
Jesse S. Cruz Profile
Jesse S. Cruz answered

Role of industry in economic development are as followsIncrease In Output And Incomes,Increase In Incomes And Employment., Agricultural Development, Removal Of Unemployment And Under Employment., Economies Of Scale, Instability In The Prices Of Exports, Increase In Use Of Money, Socio—Economic Changes, Self-Sufficiency And Productivity, Increase In Savings And Investment.

1. Increase In Output And Incomes
It is the industrial development which makes it possible to produce greater amounts of

consumer as well as producer goods. Moreover, because of industrial growth the construction and provision of infra-structure becomes possible. Thus it is said that industrial growth not only stimulates the directly productive activities but it also promotes social­over—head activities.
2. Increase In Incomes And Employment. It is obvious that the economically advanced countries are normally more industrialized than economically poor countries. At told earlier that the economic history of DCs shows that industrial growth in these countries provided the foundations for total development. Therefore, it is argued that for the sake of economic growth the share of industrial sector in national income be increased while that of agri. Be decreased. In this way, the fruits of development will be shiftedoto the other sectors of the economy. Consequently, a wave of change will emerge in the economy leading to raise incomes and employment.

3. Agricultural Development. In case of UDCs there is a big pressure of population on the lands. As a result, the lands go on sub—dividing. The farmers are bound to make subsistence farming. In such situation the agri. Sector will remain lagging. Therefore, for the sake of economic development the agri. Sector will have to be re-oriented through industrial development. Because of industrial development the tractors, threshers, tubewells, chemicals, pesticides etc. Will become available. By having utilized them the agriculture production and output could be boosted up, and agri. Sector will shift its emphasis from traditional farming to modern farming.

4. Removal Of Unemployment And Under Employment. Arthur Lewis and Rains Fei models are known as models of unlimited supplies of labor. They tell us that in case of agri. Sector of UDCs more than required number of workers are working. It means that their agri. Is furnished with disguised unemployment. Most of these workers have zero marginal productivity and if they are removed from lands it will not affect the productivity. Therefore, it is the industrial sector which plays an important role in the removal of such unemployment, as the expansion of industrial sector will be able to absorb them.
5. Economies Of Scale. Industrial sector is of crucial importance for the UDCs because
it is furnished with increasing returns to scale and the economies to scale, both internal as well as external. Whereas such phenomenon is not attached with agri. Sector. The economies of scale from industrialization will lead to reduce the costs of production. It will have the effect,of extending the markets.
Moreover, it is the industrialization which puts to an end the static life of UDCs. The industrial development will promote civic and urban life. The research and training facilities will be promoted and further forces of change will set—in.
6. Instability In The Prices Of Exports. Industrialization is advocated for the UDCs
that it will save them from the instability which rises due to big fluctuations in the prices of their primary exports. Therefore, if developing countries install their industrial concerns they will be able to produce the import—substitutes as well as manufactured goods for the sake of exportation. The prices of manufactured goods are more or less remain stable.
7. Increase In Use Of Money . Because of industrial development the use of money in
the economy increases. The traditional society with the barter exchanges will come to and end. The new and technological changes will occur. The people will follow inventions and innovations. The risk taking ventures will be taken up and efficient entrepreneurs will come forward.
8. Socio—Economic Changes. It is argued that industrialization can alter the present
economic and social structures of UDCs. As more goods and services become ava” Ible to the people. The values of the society will change. The urbanization will increase leading to reduce illiteracy and lethargic attitudes. The opportunity cost of time will increase. The rural set—up dominated by feudalism will come to an end. The standard of living of rural and urban population will improve. The distribution of income will become fairer.
There are so many advocates of ‘Big Push’ theory who have actually stressed upon the need for industrialization on the strength of dynamic externalities.
9. Self-Sufficiency And Productivity. Most of the economists are agreed upon it that it is the industrial development which will enhance productivity in the country, as well as provide self-sufficiency in a variety of fields. This is the reason that ‘Infant Industry’ argument is given with the aim of industrialization. This will have the effect of building the industrial structure in the country.
10. Increase In Savings And Investment. The economic history of NICs shows that the industrialization in these countries has led to grow the incomes, savings and investment. They have been in a position to break the vicious circle of poverty. Their markets have been extended. Above all, the inflow of foreign investment is increasing day by day in these countries. Thus, through multiplier effects the incomes and employments are increasing far more than initial stimulus.

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