Industrialization is the procedure of producing consumer goods and capital goods as well as creating social overhead capital to be able to provide products or services to both of these individuals and companies. As a result industrialization plays a significant role within the economic growth and development of LDCs (Less Developed Country).
Industrialization is really a pre-requisite for economic development because the good reputation for advanced countries shows. For development, the proportion from the industrial sector should rise which from the farming sector decline. This really is only possible via a policy of deliberate industrialization. Consequently, the advantages of industrialization will “trickle lower” to another sectors from the economy by means of the introduction of farming and repair sectors resulting in the increase in employment, output and earnings.
In overpopulated LDCs there’s overcrowding around the land, holdings are subdivided and fragmented, and maqui berry farmers practice traditional agriculture. For rapid development, LDC’s can’t afford to hold back for alterations in farm practices to occur. Therefore. LDCs must start with industrial development to provide fertilizers, farm machinery along with other inputs in order to increase efficiency around the farm. Again, industrialization is essential to be able to provide employment towards the underemployed and unemployed within the farming sector. In overpopulated LDCs, many individuals are underemployed or disguised unemployed whose marginal method is zero or minimal. They may be transferred from agriculture to industry with little if any reduction in farming output. Because the marginal product at work is greater in industry compared to agriculture, transferring such workers towards the industrial sector will raise aggregate output. Thus overpopulated LDCs don’t have any choice but to industrialize.
Industrialization can also be crucial in LDCs since it brings growing returns and economies of scale while agriculture doesn’t. “These economies live in training, stimulating communication, interaction within industry (inter-sectoral linkages), demonstration effects being produced and consumption, and so forth. Rural society is commonly stagnant, urban society dynamic. Since industrialization brings urbanization, it surpasses the stimulation of agriculture.”
Further the LDCs need industrialization to free themselves in the negative effects of fluctuations within the prices of primary products and degeneration within their relation to trade. Such countries mainly export primary products and import product which. The costs of primary products happen to be falling or remaining stable because of protectionist policies of advanced countries, as the prices of manufactures happen to be rising. It has brought to degeneration within the relation to trade from the LDCs. For economic development, such countries must get rid of their reliance on primary product. They ought to adopt import substituting and export-oriented industrialization.