CHAPTER # 1 : INTRODUCTION TO

INDUSTRIALISATIONINSTRUCTOR: MR. MANZOOR AHMAD

DEPARTMENT OF ECONOMICS

UNIVERSITY OF SWABILecture # 1

Recommend BookIndustrial Economics By A.K Sharma

INTRODUCTIONIndustrial economics is a branch

of economics with deals with the

problems of firms, entrepreneurs

and industrials and their relationship

with the society.

Industries problems: Cost minimization

Low yield or production (raw material)

Energy crisis

Declining foreign direct investment

Poor management

Natural disaster

Technological backwardness

Political instability

Shortage of capital to install or maintain industries

INTRODUCTIONAlternative names:

In economic literature it is also known by the several names:

Economics of Industries

Industry and trade

Industrial organization and policy

Commerce

Business Economics

Most of the theories are related

to the Microeconomics.

Branch of Microeconomics(Industrial Economics)

INDUSTIRAL REVOLUTIONSThe Industrial Revolution was

a period from the 18th to the 19th

century where major changes

in agriculture, manufacturing,

mining, transport, and technology

had a profound effect on the

socioeconomic and cultural

conditions starting in the

United Kingdom, then

subsequently spreading throughout Europe, NorthAmerica, and eventually the world.

INDUSTIRAL REVOLUTIONSIn Europe and the United States,

industrialization occurred in the

1700s and 1800s, with the changes

beginning in Britain. This period

is called the Industrial Revolution.

Textile manufacturing became

mechanized, transportation

(canals, railroads, and road systems) became more efficient, and steam power was introduced. Goods became more accessible and cheaper.

What is INDUSTRALISATION

The process in which a society or country (or world) transforms itself from a primarily agricultural society into one based on the manufacturing of goods and services

The process by which traditionally nonindustrial sectors (such as agriculture , education, health) of an economy become increasingly similar to the manufacturing sector of the economy.

Industrialization occurs when industry is introduced on a large scale to a region or country — for example, when an economy goes from being based on agriculture to being based on manufacturing and other industries.

Industrialization and Per Capita Income

Generally Standard of Living is measured by Per Capita Income.

PCI = GDP / Population

Income is directly linked with

the industrialization.

Because industry provides

employment to the skilled,

semi-skilled and unskilled

and unskilled labors.

In developed countries C and

PCI are high due to

industrialization.

Top 10 Richest Countries in the World

1. Luxembourg (115,809 US $)

2. Qatar (98,144 US $)

3. Norway (97,607 US $)

4. Switzerland (83,073 US $)

5. Australia ( 66,371 US $)

6. UAE ( 63,626 US $)

7. Denmark (59,709 US $)

8. Sweden (57,638 US $)

9. Canada (50,496 US $)

10. Netherlands ( 50,216 US $)

Source: International Monetary Fund(IMF)

Top 10 Most Industrialized Countries in the World

1. Norway

2. Australia

3. United States

4. Netherlands

5. Germany

6. New Zealand

7. Ireland

8. Sweden

9. Switzerland

10. Japan

We do all know that developed nation is a country which hashighly developed economy and advancement in most of thescientific fields

Industrialization And Economic Development

1. Increase in national income

2. Higher standard of living

3. Economic stability

4. Improvement in balance of payments

5. Stimulates progress in other sectors

6. Increased employment opportunities

7. Promotes specialization

8. Rise in agricultural production

9. Easy to control industrial activity

10. Large scope for technological progress

11. Increased saving and investment

12. Development of markets

13. Increase in the Government revenue

Patterns of IndustrializationPattern of industrialization vary

from one country to the other

country.

In England, France and USA is

in private sectors.

In China and Russia it is a public

sector.

In Pakistan and India there is a mixed economy , in both countries some industries are public and some are private.

Comparison of Developing counties: GDP by sectors

Pakistan:

agriculture: 20.1% industry: 25.5%, services: 54.4% 2012

• India:

agriculture: 13.7%, industry: 21.5%, services: 64.8%-2013

Bangladesh:

agriculture: 19 %, industry: 30%, services: 51% -2013

Malaysia:

agriculture: 11.2% industry: 40.6% services: 48.1% -2013

China:

agriculture: 10.1%, industry: 45.3%, services: 44.6% -2012

Comparison of Developed Countries: GDP by sectors

Norway:

agriculture: 2.2%; industry: 45.1%; services: 52.7% -2009

Australia:

agriculture: 4%, industry: 27.3%, services: 68.8% -2012

U.S:

Agriculture: 1.2% Industry: 19% Services: 80%(2011)

Japan:

agriculture: 1.2%, industry: 27.5%, services: 71.4%

Germany:

agriculture: 0.8%, industry: 28%, services: 71.2% -2012

Books on Industrial RevolutionsThe First Industrial Nation: The Economic History of Britain, 1700-1914 By Peter Mathias

Books on Industrial RevolutionsIndustrial Revolution: People and Perspectives edited by Jennifer L. Goloboy

Books on Industrial RevolutionsThe Industrial Revolution in World History

By Peter N Stearns