export oriented industrialization advantages and disadvantages

Countries like China, japan and Taiwan has improved their efficiency in production and are able to reduce the price of the product, and India being country with huge consumer base and high Demand has become their prime market. The article states that (a) " Export-led growth implies opening domestic markets to foreign competition in exchange for market access in other countries ", while saying that (b) " Hong Kong, South Korea, Taiwan and Singapore in the post World War II period " are examples of countries where export-oriented industrialization happened. IvyPanda, 23 May 2020, ivypanda.com/essays/export-oriented-industrialization-and-its-principles/. 5. A ) Discuss the forms of restriction on international trade. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. These disadvantages of Industrialization have led to global challenges such as biodiversity reduction, water crisis, habitat destruction, and even global warming. In turn, the workers from these countries were engaged in labor-intensive manufacturing (Hamilton 1996, p. 1). Wang Bo Ren(2006) argued that the export-oriented industrialization model need some prerequisites: some of the domestic industrial sector has already high level of technology and production management experience, also the adequate management personnel and skilled workforce. These are some of the main examples that can be discussed. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. Campbell, J 2013, Nigeria: Dancing on the Brink, Rowman & Littlefield Publishers, Boston. Reduction in the availability of other protective food and high value crops. If the value of the foreign currency in which a business is paid declines significantly, it can eat into the profits that the business generates from its exports. Country can buy other necessery item by the mony earned from Export What is the full form of GCA export in the annual. Nevertheless, it has also been argued that this strategy can lead to exploitation of laborers and increasing inequality in the society (Schuerkens 2010, p. 102). For example, the state can provide subsidiaries to the enterprises that represent a particular sector of an economy. student. Moreover, they can get access to education (Hamilton 1996, p. 1). Factories could make clothing faster while helping it to last longer. This process led to the development of new best practices, eventually leading to improved patient outcomes. Export-oriented industrialization (EOI) sometimes called export substitution industrialization (ESI), export led industrialization (ELI) or export-led growth is a trade and economic policy aiming to speed up the industrialization process of a country by exporting goods for which the nation has a comparative advantage. The main advantage comes from the fact that industrialization gives us more goods that can be bought at affordable prices. It should be borne in mind that the comparative advantage can be explained by several factors, for instance, the presence of natural resources, the availability of skilled and less expensive labor force, or even the climate of a country. Export have many kind of advantages. Fewer than 40 countries have gone through a modern economic revolution to fully incorporate these technologies, giving those that have a massive advantage over the developing world. The advantages of industrialization are given below: The growth of industries has resulted in large scale production of goods which are available to the consumer at much cheaper rates. Many people tried and failed, but this advantage wasnt usually possible for people unless they were born into a specific family. Login Dr.Choen Krainara 24.3k views Krugman obstfeld-ch10 Vandy K. 2.9k views A causal relationship between fdi inflows and export Alexander Decker 590 views Association between Investment, Production, Export and Import: The Impact of. Export-Oriented Industrialization, also called export-led growth, is an economic and a trade policy that aims at speeding the process of Industrialization of a nation by exporting . Get your 100% original paper on any topic done in as little as 3 hours Learn More The developed countries adopted a different approach to the development of economy. Therefore, one should not suppose that export-oriented industrialization always brings success. If this initiative is absent, the economy of a country may stop to grow. It created structures where the average person could earn a decent living while having more time with their family, even if the conditions were sometimes unsafe or unsanitary. Exporting offers plenty of benefits and opportunities, including: Access to more consumers and businesses. They paid attention to both domestic and foreign markets since the purchasing power of local clients was also high. To achieve such an objective, all companies are regularly putting efforts and work hard by which they can make lots of money. the hazards of these structural adjustment policies include economic instability (unemployment and inflation) and inequities free trade results in a more efficient use of resources and therefore greater production export oriented industrialization has resulted in higher rates of economic growth than import substitution policies 1. Import substitution, on the other hand, is the opposite. Import substitution industrialization (ISI) was pursued mainly from the 1930s through the 1960s in Latin Americaparticularly in Brazil, Argentina, and Mexicoand in some parts of Asia and Africa. 1996. This can be especially beneficial for businesses that are struggling to find growth opportunities in their domestic market. Industrialization has resulted in a considerable rise in the standard of living of the people. The services sector in India has shown a tremendous growth which can be attributed to ever increasing IT sector in India. It allows us to become more productive. apart from these, international trade will create job opportunity and hence reduced unemployment rate as well as positive balance of payment. Children were expected to work the same 12-hour days that adults put in while on the job, reducing their opportunities for schooling. Industrialization is the development of industries in a region or a country on a wide scale. This is one of the main limitations that should be considered. Once societies began to focus on manufacturing, this developed allowed families to begin training for jobs that could pay them better. Much attention should be paid to Asian countries such as Singapore or Taiwan. Some companies were even building towns to give homes to families in exchange for their labor. This is a big advantage of exporting, which can save your business. It continues to be adopted by many countries that attempt to participate in the global trade. The initial focus was on specific areas of North America and Europe, with Great Britain leading the way into this new economy. It causes us to use more fossil fuels. In this case, much attention should be paid to manufacturing sector that cannot become competitive. We dont walk to work because we can drive there. That led to the creation of roads that could support higher traffic levels. However, there is a stark difference between proposing and analyzing a plan and enacting it and making it genuinely practical, which it is not, in today 's agenda driven environment. subordinate short-term profits to long-term gains. Furthermore, the governments of these states paid more attention to the rights of workers. In other words, it is not possible to underestimate the role of the domestic market. For instance, they should concentrate on the protection of property rights. Sorry, preview is currently unavailable. professional specifically for you? In terms of investors emerging markets are used to describe developing countries, in which investment would be expected to achieve higher returns but it would be ac-companied by a higher risk. Investopedia define Globalization as the tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby, If all of these criteria are met, a candidate is legally, While considering there were many helpful, positive effects to industrialization, in the end, the negative out-weighs the positive. This strategy enabled many states to raise the standards of living and boost the development of industries. industrialization of developing countries occurred according to two broad types of strategies. During all these things, all individuals have to focus on third-party sources only. Foreign aid helps facilitate many developmental programs in developing countries. When electricity became available, then humanitys standard of living increased even further because of these efforts. Schuerkens, U 2010, Globalization and Transformations of Social Inequality, Routledge, New York. It allows a worker to focus on specialization. On the other hand, growth and development from export oriented industries, EOI, has greater results and is so much faster than import substituting industries. This literature essentially starts from the question "why do some firms export while others do not ?". All the revenue they made on exports was spent on foreign imports, resulting in growth inertia and rapid depletion of resources. Countries could expand their import and export markets for the goods getting made. To learn more, view ourPrivacy Policy. It created the foundation for global warming and climate change. The wealthy built our modern society through the efforts of desperate people who wanted to help their children and grandchildren have a better life. In fact, in small countries have small area, small population and small markets and when they use export orientated strategy then can get larger scale economy profit. He sacrificed almost everything in his pursuit of vulcanization. Globalization activity doesn't only reduce trade boundary but it lot more effects like one country come closer to the economy of other country, it help in mixture of culture, it helps in transfe So naturally the overall output of growth will rise. 1980, Intereconomics. These are the main benefits of export-oriented industrialization. With artificial intelligence and machine learning taking over many of todays repetitive processes, this shift in our economy changed the way we think about productivity. In addition, foreign investors are concerned with local institutions, and with informal, often less evident aspects of the institutional framework. Of exporting, which can save your business the fact that industrialization gives us more goods that can especially! Of a country on a wide scale the question & quot ; why do some firms while. Opportunities in their domestic market to ever increasing it sector in India has a. Businesses that are struggling to find growth opportunities in their domestic market the purchasing power of clients... Schuerkens, U 2010, Globalization and Transformations of Social Inequality, Routledge new! A considerable rise in the annual global warming can provide subsidiaries to enterprises. 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Is the opposite can get access to education ( Hamilton 1996, p. 1 ) born into a family. By which they can make lots of money exports was spent on foreign imports, resulting in growth and... Enabled many states to raise the standards of living and boost the development industries.