Industrial Development

Industrial Development

Industrialisation is the process of economic and social transformation where a group of people are transformed from an agricultural society to an industrial one. Industrialisation helps a community to achieve various social objectives. These objectives are such as poverty eradication, employment, labour standards, healthcare and access to education. Industrialisation began with the industrial revolution in the 19th century with the UK being the first country to become industrialised (Clark, 2007, p.50). However, industrialisation also does have negative effects. The industrial processes cause climate change, water and air pollution, loss of natural resources and also extinction of species. These effects threaten the social and economic welfare of the world. The European Union aims to eliminate the negative impacts of industrial development all through the world while also promoting the positive impacts. This has led to the development of environmental friendly products, services and technology which help in achieving economic growth as well as environmental sustainability. The EU also came up with policies that facilitate environmental protection, social cohesion, sustainable resource use and economic growth. Industrial development has also brought about urbanisation. There is increased concentration of labour in industries that are increasingly growing bringing about the rise of large cities and towns to house these labourers. This has brought about a change in the family structure as more people have to leave their families in search of work in the cities and towns. There is the emergence of child labour which has also come about as a result of the industrialisation. This has led to the springing up of human rights organisations to help the children who are being exploited as well as industrial workers who may not know their rights.
From time to time governments should issue industrial policies that foster and facilitate the growth of the industry. This helps in maintaining a country’s competitiveness and productivity while also eliminating the negative effects that come as a result of the industrial development. Government involvement is most common with energy supply. In many countries the government is always involved in introductory stages of energy supply especially electricity supply where they influence the ownership. Once the electrical supply has been initiated, the government now leaves the production to private firms that compete with one another with the consumer having the option of choosing the company with the least cost. The government is then involved in creating a legal framework that protects the citizens from being exploited by some of these companies that are now responsible for the electricity supply. This shows that regulation should go hand in hand with the liberalization of the energy supply. Any successful economy depends on the effective supply of energy with its use being safe and secure. This gives the government the duty to put in place clear policies that govern national energy supply and that should be checked by regulatory mechanisms (Rawski, 2008, p. 100). The practice of most governments is to link such policies with those of commerce, environmental and industrial care. The energy industry is a utility for the public service and therefore the government should always make the regulation of this industry a priority. In the regulation of industrial development, the government issues licences that are usually related to performing audits on management of regulated firms, reporting the regulatory activities to the government, intervening on disputes among the stakeholders, human resources development, establishing the structure and level of tariffs, setting the performance standards that should be maintained by the industries, ensuring that the performance of the regulated companies is always monitored and coming up with a uniform accounting system.
There are various countries that have pursued policies in achieving industrialisation. One of these countries is India which an industries development and regulation act that was enacted in 1948 in pursuance of the Industry resolution policy. The act empowers the government and helps it in regulating the direction and pattern of industrial development, in controlling the results, performance and activities of industries in the public industries and also in taking the necessary steps towards the development of industries (Shafaeddin, 2011, p.70). The ministry of Industries and Commerce in India is responsible for the administration of the act and works through the Department of Industrial Policy and Promotion (DIPP). The DIPP in India is the department responsible for the implementation and formulation of developmental and promotional measures that are aimed at the growth of the industrial sector. It monitors the industrial production and growth in industries such as the paper and pulp, cement, rubber and tyre, consumer durables, consumer goods, light machine tools, light engineering industries, light electrical machinery, light electrical industries and also other major industries. It also increases and facilitates the foreign direct investment inflow into India. In addition, it encourages the acquisition of technological capability in the various industries in the country.
The IT industry in India has greatly been helped. For a long time, computers had been a new thing for most Indians. With the industrial development of the nation, computers have become an integral part of the population of India. With the central government making industrial policy to regulate technology in the country, computers have spread widely being used in the newspaper and news agencies with each newspaper agency having its own home news page and website (Shafaeddin, 2011, p. 12).
The act has various provisions such as the making of a ‘Development Council’ that helps in the development of any group of scheduled industries. The council consists of members representing the interests of consumers, employees, owners and other persons that may have knowledge of the technical aspect of the industries. This can greatly help in reaching the objectives of globalisation as it ensures the interests of all the parties involved are well taken care of. The consumer and employees are protected from exploitation while the owner is also able to maximize on the profits. Another provision is that the council gets to perform the functions of suggesting the rules for efficiency with the view to obtain maximum production, reduce costs, eliminate waste and improve quality, promoting better marketing and devising a system of sales and distribution of the industrial produce that is satisfactory to the consumer, encouraging the training of persons in the technical subjects relevant in the industry, co-ordinating production programmes and recommending targets for production and recommending measures to improve the working of the less efficient units of the industry (Mathews and Cho. 2000, p. 8). The development council is required to prepare an annual report and submit it to the advisory council and the central government for the work done in a financial year.
The central government is responsible for the licensing of a new business or the expansion of an already existing business. The applicant is issued with an industrial license once it has been cleared and approved after the applicant has fulfilled conditions such as approval of import of capital goods and foreign investment proposal. The Government usually does an investigation before issuing the license for the purposes of regulating the output produced by the industry as well as fixing the standards of production of that industry, ensuring the industry takes the necessary steps as the central government may deem necessary to aid in the development of the industry, barring the industry from undertaking any act that might reduce its production, economic value or capacity, regulating the distribution and controlling the prices to ensure the availability of its products at a fair price (Linden, 2004, p. 4). It also provides for the central government to issue directives any time investigations concerning any industrial regulation are in place. These measures go a long way in ensuring that the aims of industrialisation are met while also eliminating the adverse effects that may result as a result of industrial development.
Another country that has adopted policies towards industrialisation is China. Most of these policies were adopted after the World War II. China’s reforms have mainly followed those of other successful East Asian countries with its economic growth largely based on increased exports and trade openness, rapid industrialization together with the liberalization of its financial markets (Lim & Pang, 1991, p. 68). China’s industrial policy combines key features of other policies that are pursued in East Asia. Some of the policies are such as those that support domestic firms as well as opening up to foreign investors.
China’s ability for developing and absorbing technology coupled with the foreign investment fuelled industrial development in the country making it realize a very huge growth in its economy. The Chinese government introduces industrial policies that help improve the competitiveness of Chinese companies. The industrial policies have taken different forms such as export subsidies, preferential loans and educational programs. China has an industrial policy that oversees the development of product standards for electronic products, integrated circuits, digital televisions, mobile telephones and consumer video discs. The electronics industry in China is the largest industry in the country on both domestically and foreign-controlled production and it plays a central role in the nation’s economy. China is exceptional because of its growth rate and potential market size giving it an advantage in implementing and crafting industrial policy in areas like absorptive capacity, industrial structure and technology transfer concessions that many other developing nations do not. These advantages are just like those that were enjoyed by the United States in the late 19th century (Linden, 2004, p.6). One area that makes China to stand out from its neighbours is its industrial structure. After studying the experiences of Korea and Japan, China restructured most of its small, uncompetitive state electronic producers transforming them into larger companies such as the SVA Group and the China Electronics Corporation.
China’s market size has given it leverage in terms of technology transfer and foreign investment making it receive foreign direct investment on an astonishing level starting in the 1990s. China received the second largest inflow of foreign direct investment in 1993 after the United States. The Chinese government together with the policy makers have been able to entice and demand technology transfers on a large scale from those investors who are eager to manufacture and market their goods there. China does also have the absorptive capacity to adapt to global competition with the suitability of its basic institutions and attitudes acting to its advantage. China ensured that it had a dysfunctional and well-organized innovation system before it opened its markets to the outside forces in the late 1970s. With Chinese policymakers making concerted efforts to update the technological base of the nation, China’s technological resources became considerable in the global market (Hong, 1997, p.80). China’s innovation system at the beginning of the transition to a market economy was split into silos with enterprises being made responsible for production while the government research institutes were given the responsibility for research. The post graduate education expanded rapidly with a growth from 10,000 post graduate student entrants in 1978 to 200,000 in 2002. This was in addition to 20 % of Chinese postgraduates that were studying overseas.
The industrial policies in these two countries have helped reach the objective of industrialisation as the characteristics of an industrialization policy are geared towards achieving the objective of industrialisation. The characteristics of the industrialisation policy are such as promoting and directing the diversification of industrial production as well as diversifying economic activities, encouraging foreign direct investment and other new investments (Easterly, 2002, p.8). It also includes, eliminating major barriers to industrial development such as labour relations, administration of tax, time delays, commercial laws, red tape delays and administration barriers to the provision of government services, improving the environment for sustainable industrial development for private investments which are both foreign and domestic and enhancing productivity, competitiveness through proper industrial governance, macro-economic management and by also ensuring that the knowledge resources, human resources, physical infrastructure and capital resources are properly managed and developed to be of relevance to industrial development
An analysis of the industrial policy reveals that a proper industrial policy should be functional and realistic and should target creating an environment which would attract increased investments with the end result of generating incomes and creating more employment. It should also be able to address capacity building and macro-economic conditions to aid in transforming the industrial positioning of a nation. The policy should address effective management and utilization of human resources while also promoting the effective mobilization of innovative and knowledge resources, competitiveness and product improvements (Shafaeddin, 2011, p.75). The policies should be implemented immediately they are defined. The objective of industrialisation is to help nations achieve economic development and reduce poverty using a socio-economic strategy. The strategy aims at raising skills of the population through education, investing in infrastructure, development of industries etc.
Industrial policies have a very essential role to play in accelerating the GDP growth of nations with the aim of accelerating industrialisation to achieve a knowledge economy (Ernst and O’Connor, 1992, p. 4). The policies also set up a vision for the industrial economy for both the long term and the short term. Moreover, the policies provide strategic direction to a country’s economy towards industrial development. Greater clarity is achieved through these policies as they define the social partners and the private sector in matters pertaining investment decisions. They provide a point of reference for effective improvements in industrial development.
There are no developing nations that are considered to have industrialized rapidly without a well-implemented and strong industrial policy. This shows that the industrial policy go a long way in meeting the objective of industrialization and therefore governments should be very effective in crafting policies that will help manage the process of industrial development in their countries. Clear benchmarks for failure and success should be put in place to help the government evaluate the progress it is making as industrial policy is considered to be an experimental process. Failures usually get entrenched when there is the absence of a clear idea to differentiate between failure and success. Benchmarks also provide a quick way of determining how the nation’s industry is doing in relation to other competitors globally. The authority of carrying out industrial policies should be given to agencies that are competent to avoid the issue of corruption cropping up.
There is a labour protection policy in most Asian countries that aims at increasing the protection of workers while improving their working conditions to increase their motivation. The policy assists entrepreneurs to become more competitive and efficient, improves and extends protection to workers who operate on self employment, agricultural workers, seasonal workers, contract workers, home workers, and informal economy workers. The policy also alerts the workers, employers, the international community and the investors that the governments in question are committed to offering labour protection as well as eliminating the negative effects that may come about with industrial development.
The various policies that have been discussed above encompass several sensitive factors such as living conditions, coverage, working conditions, working environment, basic rights, social security, enforcement and compliance and capacity building for social partners and labour administration. The Chinese government also has a child labour policy that aims at eliminating all forms of child labour, the evaluation and also monitoring child labour with the help of Manpower and Provincial labour departments. Children are immediately withdrawn from exploitative and hazardous situations and taken to rehabilitation centres with specially designed training and education schemes. The Chinese government is also committed to providing the industrial workers with reasonable working hours which are not supposed to exceed 48hours in a week. Overtime hours should also voluntary and should also not exceed 12 hours in a week. They should also be paid at a premium rate that has been prescribed in a collective agreement. The industrial workers are also entitled to rest periods and leaves in form of sick leave, special leave and annual leave as is determined by the law of the country. The workers are nevertheless advised to negotiate the terms of these leaves with their employers to make a suitable arrangement for themselves other than that prescribed by the law. Maternal leave is also offered as prescribed by the law.
There are also policies to guard against sexual harassment in the workplace with proper legal intervention put in place in case one finds themselves in such a situation. Companies that plan on terminating the services of the workers should give advance warning to the workers to enable the workers to make arrangements to find employment elsewhere. Employers do also have the responsibility of ensuring that the working environment is safe.
In a nutshell, the industrial policies that are set by governments go a long way in establishing the objective of industrialization in developed as well as developing nations. The negative effects of industrialization can be greatly reduced or eliminated altogether by embracing these policies that aim at improving the working conditions of workers and ensuring that the environment is well taken care of. Health and safety policies eliminate hazards from the working environment or in cases where elimination of the hazards is not possible; they isolate them from workers (Shafaeddin, 2011, p.80). The policies also ensure that the workers are provided with protective clothing and this also serves in making the working environment conducive.
The objective of industrialisation is largely achieved when these policies are made and implemented because they play a large role in the industrial development of nations. All the developed nations have realised that policies are essential for the rapid industrialisation of their nations and have quickly embraced these policies. The conclusion then is that governments should embrace policies to help in regulating the industrial development of their nation. This would help in dealing with problems like child labour, emergence of the informal sector and also the rapid urbanization that is experienced as a result of industrial development. It is clear that industrial development is necessary for the growth of a nation and it is therefore the responsibility of the government to see to it that the negative effects of globalization are completely eliminated. This ensures that the government achieves economic growth as well as the primary objective of industrialization.

Reference List:
Clark, G. 2007. A Farewell to Alms: A Brief Economic History of the World. London: Princeton University Press.
Easterly, W. 2002. The Elusive Quest for Growth. Cambridge: MIT Press.
Ernst, D & O’Connor, D. 1992. Competing in the Electronics Industry: The Experience of Newly Industrializing Economies. Paris: OECD, Development Centre.
Hong, S. 1997. The Political Economy of Industrial Policy In East Asia: The Semiconductor Industry in Taiwan And South Korea. Northampton: Edward Elgar.
Lim, L & Pang, E. 1991. Foreign Direct investment and Industrialization in Malaysia, Singapore, Taiwan and Thailand. Paris: OECD.
Linden, G. 2004. China Standard Time: A Study in Strategic Industrial Policy. Business and Politics 6 (3), 1-24. Retrieved online on 10th December 2011 from: http://isic.ucsd.edu/papers/Linden04.pdf
Mathews, J. & Cho, D. 2000. Tiger Technology: The Creation of a Semiconductor Industry in East Asia. Cambridge: Cambridge University Press.
Rawski, T. et al. 2008. China’s Industrial Development, China’s Great Transformation. Cambridge: Cambridge University Press.
Shafaeddin, M. 2011. Trade Liberalization, Industrialization and development: The Experience of Recent Decades. Penang: Third World Network.

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