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. Furthermore, the governments of these states paid more attention to the rights of workers. Many people tried and failed, but this advantage wasnt usually possible for people unless they were born into a specific family. Once societies began to focus on manufacturing, this developed allowed families to begin training for jobs that could pay them better. Moreover, they can get access to education (Hamilton 1996, p. 1). Read "Restructuring the export-oriented industrialization in the Pearl River Delta, China: Institutional evolution and emerging tension" on DeepDyve - Instant access. 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. Apart from that, one should bear in mind that export-oriented investment brings foreign direct investment to a country (Chan & Clark, 2013). We utilize security vendors that protect and 4. These disadvantages of Industrialization have led to global challenges such as biodiversity reduction, water crisis, habitat destruction, and even global warming. When electricity became available, then humanitys standard of living increased even further because of these efforts. Export-oriented industrialization (EOI) is the industrialization process governed by economic policies that are aimed towards enhancing the export sector of a country. in different nations. East Asian countries can therefore continue their export oriented strategy, but should be prepared for slower progress than in past decades. Exporting protects your business against fluctuations in the domestic business cycle, thereby protecting your revenue and employees. The world started to see that the balance of trade was shifting to the producer, increasing the wealth of businesses, and adding tax revenues to society. Export-oriented industrialization was particularly characteristic of the development of the national economies of the Asian Tigers: Hong Kong, South Korea, Taiwan, and Singapore in the post-World War II period. Advantages Disadvantages insufficient knowledge of market and culture no or very few extra staff required lower profit margins agent knows and has access to the market and distribution channels dependence on commitment of partner more complete market coverage possible no direct customer contact What are the disadvantages of indirect exporting explain in your own words? What are the advantages and disadvantages of export oriented industrialization? Therefore, it is not possible to argue that export-oriented industrialization inevitably lead to inequality within a society. 1. They paid attention to both domestic and foreign markets since the purchasing power of local clients was also high. Many economists have also been commenting on the recent export growth slowdown in India. It shifted our perspective of wants vs. needs. Political Economy of Import Substitution Industrialization in Latin America" in 1968, thus the author will refer to Villela who evaluated the long-term effects of ISI. Factories could make clothing faster while helping it to last longer. Poor Working Conditions Every industry is profit-driven; many companies look to maximize their profit by increasing the levels of production. One should bear in mind that in the middle of the twentieth century various countries could be viewed less developed, for instance, one can mention South Korea, Taiwan, or Singapore. But in large countries is the number of unemployed people and surplus products huge and a large increase in export cannot solve these problems. Each new invention or best practice that came about because of industrialization led to more jobs for the global economy. In short, they are trade enclaves that import raw materials, process them, and then export to the world market. inventionjournals 404 views Export-led growth has a lot to do with self-sufficiency. It is argued that the relationship between trade liberalization and labour law must be understood as constantly reconstructed across governance levels and with a view to forms of distributive justice beyond national borders. must. It allows a worker to focus on specialization. When people were creating items by hand, including books and clothing, then they needed to be compensated for their efforts. 20. The disadvantage for an import substitution based industry, ISI, is although it achieves growth it does so through a greater period of time. The producers can adapt their products on the basis of such authentic information and improve their profitability. However, this policy may have significant limitations. May 23, 2020. https://ivypanda.com/essays/export-oriented-industrialization-and-its-principles/. Import substitution, on the other hand, is the opposite. In the long-term, such a state can become very vulnerable to the changes in external environment. Anyone could make a name for themselves because of industrialization. We often look at names like Jeff Bezos, Elon Musk, and Bill Gates and their combined wealth of about $400 billion and wonder how a few people can hold so much. Industrialization created the surge in automation that we experience today. The disadvantages of export: 1.Low value-added exports can only get a small profit. However, it is important for businesses to carefully consider the advantages and disadvantages of exporting before entering into international trade. It can be a lucrative way for businesses to expand their operations and increase their profits. You could significantly expand your markets, leaving you less dependent on any single one. Exporting refers to the sale of goods and services to foreign countries. The world has become a small place. The term Research Methodology refers to a set of procedures, methods & techniques that are put together by the researchers to obtain a solution to the problems they confront during the collection of data. The first is that export-led growth can create profit, allowing a country to balance their finances, as well as surpass their debts as long as the facilities and materials for the export exist. List of the Advantages of Industrialization 1. For example, the state can provide subsidiaries to the enterprises that represent a particular sector of an economy. 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. Some countries adopted the approach of import substitution in which they try to decrease their dependency on other nations and protect and foster domestic small companies. Export-led growth is important for mainly two reasons. Some countries used from this strategy for export-led growth. These methods are used to gather data and resolve issues that emerge during the process of data gathering. 4. However, there are also several disadvantages to exporting that businesses must consider. 1. At the beginning, the manufacturers from Taiwan focused on the export of textiles. 2. This is the main thesis that can be put forward. It is widely accepted that export oriented economies are more effective when the external demand is high. Industrialization has resulted in a considerable rise in the standard of living of the people. to be cited: Background paper 'The State and Development Governance', UNCTAD Least Developed Countries Report 2009, Publication Centre at Universiti Malaysia Perlis: Perlis, Malaysia and, International Journal of Urban and Regional Research, Trade Liberalization, Labour Law, and Development: A Contextualization. If this initiative is absent, the economy of a country may stop to grow. This advantage would eventually lead to a stronger free-market economy where those with the most innovation could get rewarded for their creativity. When people made products before industrialization, the labor required to create something meant that each item required a specific purpose. It is up to us to clean up the pollution that comes about as a side effect to these efforts. Yet foreign investors consider more then the formal national institutions when deciding how and where to set-up their operations. There are many different approaches to development in which countries over the years adopted to further develop and grow their economy. Proper Choice for Certain Products: The direct exporting is necessary in the following cases and there is no other alternative to get success: i In respect of commodities which use a highly technical sales organisation and require after sale services; ii When middlemen are disinclined towards accepting all the risks of export trade. Additionally, the GDP of this country grew by 300 percent within the period between 1960 and 1986 (Chan & Clark 2013, p. 1958). Effect o. On the other hand, growth and development from export oriented industries, EOI, has greater results and is so much faster than import substituting industries. Advantages Of Export Oriented Industrialization. In many cases, companies that are based in less developed countries can achieve leading positions in the market because their production is more cost-efficient (Dickson 2013, p. 1991). Overall, it is possible to argue that export-oriented industrialization can indeed contribute to the growth of economy because this policy can increase the income level and purchasing power of people living in less developed countries. 7. Now we use fossil fuels to produce the goods and services we need through our factories. It has closed the only land border Qatar shares with Saudi Arabia. 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). Nevertheless, policy-makers and economists should remember that the implementation of this strategy depends on such factors accessibility of market, the level of corruption, skills of local workers, and willingness of entrepreneurs to invest into new technologies. Learning Objectives Type of Entry Advantages Exporting Fast entry, low risk Licensing and Franchising Fast entry, low cost, low risk Partnering and Strategic Alliance Shared costs reduce investment needed, reduced risk, seen as local entity Acquisition Fast entry; known, established operations Why is exporting difficult? Export-Oriented Industrialisation and Dependent Development: the Experience of Singapore Cheah Hock Beng Introduction Development which relies in varying degrees upon the export of manufactured goods is not a new phenomenon. Finally, it is vital to remember that a less developed country can achieve success through export-oriented industrialization if local laborers are relatively skilled. Living conditions around the new factories were not always better. Globalization is the global evolution toward economic, financial, trade, and communications integration which implies the opening of regional and nationalistic perspectives to a wide attitude of an interconnected and interdependent world with free transfer of capital, goods, and services across domestic frontiers. Academia.edu no longer supports Internet Explorer. Factories made it easier to produce everything from scalpels to new laboratory equipment, making it possible for more people to become doctors, nurses, and caregivers. Importance. Besides, the success of the export strategy is changing from country to country. The most eloquent example is Nigeria which exports oil and gas; however, other areas of this economy remain underdeveloped (Campbell 2013, p. 15). Academia.edu uses cookies to personalize content, tailor ads and improve the user experience. The story that often gets told when discussing industrialization is the life of Charles Goodyear. Neil Karunaratne. However, that could be time consuming and more difficult to obtain than domestic data. In turn, the nation that adopts this strategy has to focus on those areas where it can best compete with foreign countries. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Some firms may not have the technical know-how where these modifications are concerned and might have to incur the costs associated with hiring an expert. Export-Oriented Industrialization (EOI): Arguments For and Against What Have Been Experienced of Developing Countries With Regard to EOI Jan. 16, 2013 12 likes 24,252 views Download Now Download to read offline Economy & Finance Dr.Choen Krainara Follow Consultant Advertisement Recommended With the best exchange rate possible you can save a significant amount of money for your business. In addition, foreign investors are concerned with local institutions, and with informal, often less evident aspects of the institutional framework. If you're courageous enough to meet the requirements of foreign markets and prepared enough with resources, you can skyrocket your export business. Nevertheless, this situation can be attributed to such factors as corruption, lack of infrastructure and the collapse of the educational system (Campbell 2013, p. 15). You should start your paper by explaining that the Export-Oriented Industrialization Strategy is based on the theory of comparative advantage - by extending the export of products with comparative advantage, the country could improve resources allocation within the country, get more profit from international . This event would lead to the first time in history when the poor or middle class could save money while still meeting their needs. Its initial characteristics included shifts from rural work, technological progress, and changes in class consciousness. When we consider the top advantages and disadvantages of industrialization, we must also take an honest look at the outcomes. Nevertheless, these problems encountered by Nigeria can be resolved by the government. The quality and safety of the foods we eat from these processes are questionable at times, especially when GMOs, herbicides, and pesticides enter into the discussion. The technological advancement and change in the communication and transportation facilities has surged the international trade in the 20th century. He sacrificed almost everything in his pursuit of vulcanization. Whaling became an industry because we needed to harvest the oil from these animals to power our lamps and produce consumer goods.