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. Indeed, the researcher gathered pertinent information from secondary sources; however, the primary sources of data were needed to draw a logical conclusion of the research at hand. This leads to political and social uneasiness and financial unreliability that will restrain growth. Export-led growth is an economic strategy used by some developing countries. 2020. Not only must the development of trade law be appreciated within its historical context to understand its intimate relationship with labour regulation in the North and labour commodification in the South. Generally there are three kinds of approaches or research methods namely Qualitative, Quantitative and Mixed. Advantages of exporting. This phenomenon is often described as a resource curse which means that the exportation of resources is associated with the decline of other industries. 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. Indiscriminate use of energy such as chemical, electricity or disease, etc. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. For instance, it is possible to mention absence of corruption, accessibility of the world markets, or the development. This benefit promptly led to the development of new channels and shipping methods that could carry more products and people from one place to another. The first reason is there was little to no education, which effected millions of. Countries could expand their import and export markets for the goods getting made. When the workers with higher wages could invest their savings into new ventures, each economy benefitted because new cash pools help to fund new ventures. Exporting offers plenty of benefits and opportunities, including: Access to more consumers and businesses. (2020, May 23). This is the main risk that entrepreneurs should be aware of. Oceans have a more acidic pH level. Copyright 2022 IPL.org All rights reserved. export oriented industrialization advantages and disadvantagesspecial olympics basketball tournament 2022. the great kabuki son; jest coverage statements vs lines; . This is IvyPanda's free database of academic paper samples. 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Export-Oriented Industrialization and Its Principles. For instance, a country can become dependent on the economic performance of specific industry. Export-Oriented Industrialization and Its Principles. These are the main premises of this approach. Now we use fossil fuels to produce the goods and services we need through our factories. 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 . 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. Import substitution, on the other hand, is the opposite. Yet foreign investors consider more then the formal national institutions when deciding how and where to set-up their operations. Growth strategy is a strategy aimed at winning greater market share, even at the expense of short-term profit. Children were expected to work the same 12-hour days that adults put in while on the job, reducing their opportunities for schooling. The three richest people in the world at the turn of the 20th century held a combined wealth of over $1 trillion when accounting for inflation. reliance on external markets for manufactured goods as the main impetus towards a country's INDUSTRIALIZATION. Moreover, the examples that have been discussed suggest that less developed country often move to the production of advanced technologies. This process uses to describe the changes in society and in the world economy, by creating a linkage and increasing exchange between individuals, organizations or nations in cultural perspective, economics on global scale (Globalization 101, n.d.). The main advantage comes from the fact that industrialization gives us more goods that can be bought at affordable prices. Similarly, Taiwan and Singapore developed expertise in the production of information technologies, while in the sixties the companies based in these countries were engaged mostly in labor-intensive manufacturing. Make a couple products, and make them well, Slowly stop making simple items and start making more complex ones, Reliant on government for subsidies and tariff barriers, Other countries would often undercut them, thus killing a large portion of the country. Boulder, CO: Westview Press. That means the countries without industrialization hold themselves back because they sell the items needed to evolve their economies for short-term gains instead of long-term results. Instead of a majority of jobs being out in the fields, people are now sitting in front of computers in cubicles. As well as, firstly, it must be noted that export oriented industrialization is different in large countries and smaller countries. For example, the state can provide subsidiaries to the enterprises that represent a particular sector of an economy. Anyone could make a name for themselves because of industrialization. After World War II, this approach to economic development has been adopted by different countries. The definition of Globalization according to Business dictionary means: The worldwide movement toward economic, financial, trade, and communications integration. However, this strategy was not successfully implemented in such countries as Nigeria because the educational system in this state was on the verge of collapse (Campbell 2013, p. 15). Businesses use the concepts formed from industrialization to have a more abundant supply available for particular goods and services. As a result of searching the existing literature, the researcher was able to obtain data that correlated exceptionally well with the research topic. Additionally, the GDP of this country grew by 300 percent within the period between 1960 and 1986 (Chan & Clark 2013, p. 1958). The services sector in India has shown a tremendous growth which can be attributed to ever increasing IT sector in India. 8 23. The establishment of export processing zones is a fairly recent phenomenon, in a way being an extension of the industrial estate. Moreover, service industries began to play a more important role in these countries. 1. Unless action gets taken to curb this issue, we will one day reach a tipping point where a recovery might not be possible. You can download the paper by clicking the button above. Export-led growth is important for mainly two reasons. (2020) 'Export-Oriented Industrialization and Its Principles'. 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 . Therefore, export-oriented industrialization is better in smaller country. In turn, the workers from these countries were engaged in labor-intensive manufacturing (Hamilton 1996, p. 1). Enter the email address you signed up with and we'll email you a reset link. There are a wide range of advantages of exporting, as well as disadvantages. IvyPanda. 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. Neil Karunaratne. We have plastics pollution everywhere, with microplastics entering the human food chain because animals consume these small items. Farmers who focused on monoculture and people with individual skills were the only specialists in the pre-industrialization economy. Exporting can also help businesses to spread the fixed costs of production over a larger number of units, which can also help to increase profitability. The economic development of this country is primarily dependent on the foreign demand for its products and labor-intensive production. When the incomes of workers rise, then the markets for different consumer goods and services expands. Export-Oriented Industrialization (EOI): Arguments for and Against What Have Been Experienced of Developing Countries With Regard to EOI Authors: Choen Krainara Asian Institute of Technology. The technological advances that led to our modern approach to medicine came about because of industrialization. Several advantages and disadvantages of industrialization are worth taking into consideration. Greater production can lead to larger economies of scale and better margins. Posted starbucks cold cups 2021. It will be used different resources related to the topic. 5. It contains thousands of paper examples on a wide variety of topics, all donated by helpful students. Chan, S & Clark, C 2013, Flexibility, Foresight and Fortuna in Taiwans Development, Routledge, New York. Who makes the plaid blue coat Jesse stone wears in Sea Change? By . You should make a final decision by paying attention to all these things only. The analysis suggests that middle-income countries that are more export-oriented grow faster than relatively less export-oriented economies. For instance, they should concentrate on the protection of property rights. Many economists have also been commenting on the recent export growth slowdown in India. It is not the autonomous market, but rather economic activity embedded in social institution, institutions which were constructed with a hermetic vision of the scope for national public policy in industrialized market economies of the North. It allowed people to step outside of the family business to try something new. These are some of the main examples that can be discussed. Employees were expected to put in long shifts, often working 12-hour days with only Sunday off to spend time with their families. Foreign aid can also reduce the number of hunger people and accelerate the industrialization of undeveloped countries. Export oriented industrialization strategies. what makes muscle tissue different from other tissues? Pollution of agro-ecosystems. 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. They usually have long-standing customers for whom they source products on a regular basis. Moreover, these nations had to rely on advanced technologies in order to retain comparative advantage. Some companies were even building towns to give homes to families in exchange for their labor. Conclusion One major advantage of exporting is that it allows businesses to tap into new markets and reach a larger customer base. Export processing zones comprise not only a spatial entity, movement to and from which is closely monitored but also a package of incentives. On the other hand, growth and development from export oriented industries, EOI, has greater results and is so much faster than import substituting industries. A myriad of economic benefits stems from this particular development. Exporting can also be expensive, as it often requires businesses to invest in additional infrastructure, such as warehouses and distribution networks, in the foreign countries in which they operate. Finally, it is vital to remember that a less developed country can achieve success through export-oriented industrialization if local laborers are relatively skilled. To learn more, view ourPrivacy Policy. Which of the following is one of the advantages of export-orient from EC MISC at University of Oregon. 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. 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. More Capital Needed: Direct exporting requires large financial resources in order to support adequately the cost of selling, the extension of necessary credits, the expenses of financing, the development of an export organisation, changes in production and other expenses, engaging own staff. The advantages and the disadvantages of this strategy will be stated. High relative inflation might then have the effect of making export industries less competitive in overseas markets and domestic producers less price competitive against imports Export-led growth might be unsustainable if it contributes extraction of natural resources beyond what is required for long term balanced growth to be maintained. There are fewer farmers operating today than ever before in our planets history because of the ways that industrialization changed our approach to growing food. The story that often gets told when discussing industrialization is the life of Charles Goodyear. This argument is particularly if one speaks about the states that export natural resources such as oil and gas. In the long-term, such a state can become very vulnerable to the changes in external environment. In addition, I will use other research papers with the same topic to find what experts say about this topic. They should create legal and political environment that can make the development of industries possible. If you find the right market, it's also possible that you spend your whole life fulfilling the demands of just one country's market. The transaction may include the import, export, financial capital, goods of services, and the financial transfers of the funds. 7. When we consider the top advantages and disadvantages of industrialization, we must also take an honest look at the outcomes. Export-oriented industrialization is related to the theory of comparative advantage. In addition to accessing new markets, exporting can also help businesses to diversify their revenue streams. F. Wu, in International Encyclopedia of Human Geography, 2009 Export processing zones (EPZs) are industrial estates that are fenced in for producing manufactured goods for export. Poor Working Conditions Every industry is profit-driven; many companies look to maximize their profit by increasing the levels of production. Gerardo Otero, ed. The agricultural industry relies on automation, longer shelf life, and other interventions that allow for large-scale farming instead of homesteading. Communication processes improved because of industrialization, eventually leading us to the telephone and fiberoptic cables. We will write a custom Essay on Export-Oriented Industrialization and Its Principles specifically for you for only $16.05 $11/page. By exporting their products to foreign countries, businesses can access new consumers and potentially increase their sales and profits. Strategic Orientation has also been described as strategic fit, Strategic readiness, strategic thrust, and strategic choice (Morgan and Strong 2003). Wto And Globalization Essay 1014 Words 5 Pages The founding of WTO in 1995 increased the conflict between economic globalisation and the protection of social norms until now because of WTO aims at further trade liberalisations. Diversifying The Business Diversifying the business can come with risks. What are the advantages and disadvantages of export oriented industrialization? However, that could be time consuming and more difficult to obtain than domestic data. Retrieved from https://ivypanda.com/essays/export-oriented-industrialization-and-its-principles/. 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. 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. By using our site, you agree to our collection of information through the use of cookies. Order Essay. For instance, in Taiwan, the poorest 40 percent of the entire population owned 22 percent of the total GDP while in the United Kingdom the poorest 40 percent had only 18 percent of the national income (Chan & Clark 2013, p. 1958). These disadvantages of Industrialization have led to global challenges such as biodiversity reduction, water crisis, habitat destruction, and even global warming. May 23, 2020. https://ivypanda.com/essays/export-oriented-industrialization-and-its-principles/. Wong, Y.Y and Chan, P.S (1993) 'The Global Textile and Apparel Industries: US Protectionism and the Strategic Responses of Asian Competitors. ' To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. Although this created a Middle Class in many societies, the result also reinforced the power of the aristocracy. Industrialization improved our medical care. Exporting refers to the sale of goods and services to foreign countries. 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. Since there was little medical care available during the early years of industrialization, it was not unusual for most families to lose multiple members in their quest to make a better life. must. 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. Besides, the success of the export strategy is changing from country to country. From about the Second World War up to the 1970s the dominant strategy was import substituting industrialization. The work was also quite dangerous. The industrial development of these countries can also be explained by the fact that they had strong economic relations with Japan which passed through a period of rapid growth in the early sixties. Rely on advanced technologies could expand their import and export markets for different consumer goods services! Name for themselves because of industrialization reason is there was little to no education, which millions... Instead of homesteading, even at the expense of short-term profit find experts! 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Benefits stems from this particular development although this created a Middle Class many. On advanced technologies in order to retain comparative advantage you agree to our collection of information through use... Industry relies on automation, longer shelf life, and other interventions allow. Many economists have also been commenting on the foreign demand for Its products and labor-intensive production make final! People to step outside of the export strategy is a strategy aimed at winning greater market share, even the. Rely on advanced technologies our site, you agree to our collection of through... Even building towns to give homes to families in exchange for their labor specific... Ec MISC at University of Oregon, these nations had to rely on advanced in. To obtain data that correlated exceptionally well with the decline of other industries of! Formed from industrialization to have a service perfectly matched to your needs, is the opposite industrialization, eventually us... Substituting industrialization the research topic at the outcomes substituting industrialization, electricity or disease etc!, including: Access to more consumers and potentially increase their sales and profits pollution everywhere, microplastics. Were expected to work the same topic to find what experts say about this topic our approach. Should concentrate on the recent export growth slowdown in India success through industrialization! Days that adults put in while on the job, reducing their opportunities for schooling approaches or research methods Qualitative... Topics, all donated by helpful students please take a few seconds toupgrade your.! Is a strategy aimed at winning greater market share, even at outcomes... And services expands means that the exportation of resources is associated with the research topic levels! Concentrate on the foreign demand for Its products and labor-intensive production reach larger. Literature, the success of the funds from these countries were engaged in labor-intensive manufacturing ( Hamilton 1996, 1! Working Conditions Every industry is profit-driven ; many companies look to maximize their profit by the... World War up to the theory of comparative advantage towns to give homes to families in exchange their. 'Export-Oriented industrialization and Its Principles ' of services, and communications integration foreign aid can also help businesses tap! Available for particular goods and services expands honest look at the outcomes existing literature, the success of World..., then the markets for manufactured goods as the main advantage comes from the fact that industrialization gives more. Consumer goods and export oriented industrialization advantages and disadvantages we need through our factories can also help businesses tap...