Question

What are the contributions of industrialization to development?

Answer 1

As stated earlier, it is essential to produce inputs to other producers in an economy. Even agriculture requires inputs from industry such as fertilizers and tractors to increase productivity.
Second, a market exists for both producers and consumer goods. Even services like banking, transport and trade are dependent on the production of industrial goods.
Third, by using modem methods of production, industries contribute to better productivity’ and hence lower cost of production of all goods produced. It therefore helps people to buy goods at a cheaper rate and help create demand for more products. Fourth, through such expansion of production, industrialization helps to absorb the labour force coming out of agriculture. Employment generation is therefore an important objective of industrialisation.
Fifth, a related advantage of industrialization is therefore technological change. Through use of modem techniques, industrialisation contributes to learning of such methods and their improvement. As a result labour productivity, ie, output per unit of labour input increases, which can help workers earn higher wages.
Sixth, expanding incomes lead to more demand for goods and services. If an economy is not able to produce enough to meet such demand, it has to rely on imports and therefore spends a lot of foreign exchange. If the economy does not earn enough from exporting, it will be difficult to meet the growing demand. Industrialization therefore helps an economy to save and also generate foreign exchange through exports.