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Industrial and Post-Industrial Economies Essay

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Updated: Sep 15th, 2021

Industrialization is a means to modernize a country using the resources available within the country. Industrialization is well supported by globalization and outsourcing that help economies lacking in particular resources to transform themselves into industrialized economies. The industrial economies are having the capacity to serve a huge market and also they have got resources such as skilled labor and raw material to carry on the operations. The industrial economies have a major tendency to have technological innovation and also they usually specialize in manufacturing which serves as the basic need for the people living in those economies. According to the sector classification, the industrialised economies are placed in the secondary sector. The industrial economies grew in number in the nineteenth century when major parts of Europe and the US were industrialised. However, there is always room for improvement and this was represented by the post-industrial economies.

Unlike industrial economies which concentrate on manufacturing, post-industrial economies think ahead and concentrate on the services offered to the residents. Post-industrial economies often de-industrialize themselves as technology plays a key role in their development. Such economies might relocate their manufacturing units out of the country (outsourcing) to someplace where it is cheaper to manufacture the goods while concentration is on the attached service with those goods that customers might be highly interested in availing. It is for such reasons that 80% of the businesses in the US are service-oriented. Hence the post-industrial economies fall in the tertiary sector category.

The transformation of an industrial economy to a post-industrial economy is based on numerous factors which government might consider important. Firstly there should be the need and potential in the market to avail what is going to be offered to them. It means that the market must have significant buying power (high-income levels) to accept the products with services or if they are just services then they should be availed even if they are not basic means of survival. The availability of another location that can provide cheap labor resulting in low manufacturing costs (including transportation) is also a prerequisite; China is playing a significant role here. Another strategy being used by the governments is to find skilled labor that is capable of delivering those services designed for customers. The role of IT is crucial in service design but IT requires people with significant knowledge and skills to operate such systems.

This is related to the country’s educational system and literacy rate else it becomes hard for such an economy to bring expatriates to fulfill the jobs which might also have an adverse impact on overall economy. In order to transform an industrial economy into a post-industrial, the governments form strategic plans and carry out the necessary actions long before they are deemed to be implemented for the economic transformation. Relevant researches are conducted to ensure if the platform is available to help an economy transform itself. Foreign direct investment strategies are implemented after researching and identifying a suitable location (another country) that could allow production with low costs. After meeting all the prerequisites, the governments take action over a small scale which spends the progress of time resulting in post-industrial economies.

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IvyPanda. (2021) 'Industrial and Post-Industrial Economies'. 15 September.

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