Industrialization and Economic Development Concepts

Industrialization

period of time that refers to the increased output of machines, first started in Britain

Primary sector

economic activity that involves extracting raw materials or harvesting them

Secondary sector

economic activity that processes raw materials and transforms them into finished goods (Make It!)

Tertiary Sector

economic activities that provide services and sell goods (sell it!)

Quaternary

involves the collecting, processing, and manipulation of capital and information

Quinary

economic activity consisting of high-level decision making and advancement of human capacities (research it!)

Intermodal containers

large, standardized containers that can be used across different modes of transportation

Intermodal connections

places where two or more forms of transportation meet

break of bulk point

the transfer of transported cargo from one kind of carrier to another

least cost theory

a theory that describes the optimal location of an industry in relation to cost of transportation, labor, and relative advantages of agglomeration, created by Alfred Weber

agglomeration

the clustering of businesses that benefit from close proximity

core countries

have economic power, are usually stage four and five, are well industrialized, tertiary sector, and take advantage of global market economy

semi periphery countries

usually stage 3, have a lot of manufacturing, and are newly industrialized

periphery countries

stage 2, mostly primary sector jobs, and are taken advantage of by the core and dependent on the core

Development

a change in economic and social level of a country through industrialization, urbanization, and standard of living

gross domestic product

the total value of goods and services produced within the borders of a country

gross national income

the total value of goods and services produced within the borders plus net income from companies located outside the country

formal economy

means the products are taxed

informal economy

means they are not taxed

income distribution

measured by the gini coefficient of the economy and it is the income inequality versus income equality and distribution of money

gender inequality index

a measurement of how easier difficult it is to be a woman in a country; a lower percentage means better equality

human development index

used to calculate development in terms of human welfare

roles of women

changes as countries develop economically; although there are more women in the workforce, they do not have equity in wages or employment opportunities.

Micro loans

Opportunities for women to create small local businesses which have improved standards of living.

Rostow's stages of economic growth

Assumes all countries are capable of development along the same trajectory which encompasses five stages of linear development towards self-sustained economic growth and high levels of mass consumption.

Stage one of Rostow's model

Traditional society which includes subsistence farming, rigid, unchanging social structure, resistant to technology.

Stage two of Rostow's model

Transitional stage which has preconditions for takeoff, with progressive leadership moving the country towards greater flexibility, openness, and diversification.

Stage three of Rostow's model

Takeoff stage where industrialization and sustained growth begins, urbanization and technological breakthroughs occur.

Stage four of Rostow's model

Drive to maturity where technology spreads, industrialization specialization begins, international trade expands, and population growth decreases.

Stage five of Rostow's model

High mass consumption where the service sector increases and the widespread production of goods and services and mass consumption occurs.

Wallerstein's World System Theory

Describes how economic power is distributed between dominant regions and less powerful regions; less developed countries are defined by their dependence on developed core countries.

Dependencies theory

Argues that peripheral countries are poor because of the persistence of exploitative economic practices carried out by core colonies and neocolonialism.

Commodity Dependency Theory

A strong link between economic underdevelopment and countries whose economies are dominated by commodity exports.

Complementary advantages

Advantages created when producing goods that are consumed together, like peanut butter and jelly.

Comparative advantage

Advantages to locations that combine lower operating costs resulting in trades/sale opportunities that produce goods/services for a lower price, like oil-producing states.

Neoliberal policies

Characterized by free market trade agreements, deregulation of financial markets, individualism, and the shift away from state welfare provision.

Free trade agreements

Treaties between two or more countries to establish a free trade zone where goods and services can be conducted across common borders without tariffs.

EU

Originally began as an economic union and has evolved into a political organization with free movement between countries.

WTO

Global international organization dealing with the rules of trade between nations; negotiates the bulk of the world's trade agreements that are signed and ratified by their legislators.

Mercosur

South America's economic partnership for free trade cooperation.

OPEC

Organization of the petroleum exporting countries that coordinates and unifies the policies of member countries to ensure stabilization of oil markets.

Tariffs

taxes imposed by the government on goods imported from other countries that serve to increase the price and make it more desirable to buy goods made inside the country.

Global financial crisis / debt crisis

A situation in which a country is unable to pay back its government debt caused when spending exceeds revenues for a prolonged period of time.

International lending agencies

Institutions that specialize in providing loans, grants, and financial assistance to less developed countries focusing on poverty reduction, stimulating growth, building infrastructure, encouraging foreign investment, and fighting corruption.

International Monetary Fund

An organization of 189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Outsourcing

When a company sends goods/services out for external production, typically where labor is cheaper to achieve comparative advantages.

Manufacturing zones

Created by the growth of industry in countries outside of the core where governments create favorable investment and trading conditions to attract export-oriented industries.

Special economic zones

Designated areas with economic laws more free-market oriented than a country's typical national laws.

Free trade zones

Designated areas where goods may be landed, stored, handled, manufactured, reconfigured, and re-exported under specific customs regulations and are generally not subject to customs duty.

Export processing zone

Generally in developing countries, designated by their government that offer exemptions from certain taxes and business regulations to promote industrial and commercial exports.

International division of labor

The shift in the core to service industries and an associated shift to manufacturing in the semi-periphery/periphery as companies search for the cheapest locations to take advantage of low-cost labor.

Post-Fordist methods

Flexible production that no longer centralizes one manufacturing facility and takes advantage of outsourcing or just-in-time delivery and is reliant on advanced technology.

Multiplier effect

Happens when an increase in spending produces an increase in national income and consumption that is greater than the initial amount spent.

Just-in-time delivery

A system of production centered around using modern transportation to only order parts as needed and not by keeping large stockpiles and warehouses, reducing costs by saving money on overhead inventory.

Emergence of service sectors

The shift from a manufacturing-based economy to a service-based economy as a country develops.

High-tech industry

An industry that uses advanced methods in modern equipment or is devoted to research development in the sale of high-tech products like aircraft or computers.

Hi-Tech quarters

Areas devoted to research, development, and sale of high-tech products, like Silicon Valley.

Growth Poles

The concentration of highly innovative and technically advanced industries that stimulate economic development.

Sustainable development policies

Attempt to remedy problems stemming from natural resource depletion and mitigate the effects of pollution and climate change, such as ecotourism and the UN sustainable development goals.