Industrialization is the transition of agriculture-related raw materials to mass manufacturing of goods and services. The period has been characterized into two phases, Early development and Late development. Early industrialization occurred in Britain in the late 18th century, while late industrialization occurred in the 20th century after the second world war in European, North American, and East Asian countries. Late Development was characterized by an increase in the economy’s growth, efficiency in labor division, and technological innovations compared to the use of human control to solve existing problems (Paprotny, 2020). Late development relied on measuring stages of the economy hence determining growth rate, while, Early development relied on analyzing and explaining the different kinds of technologies, organizations, and institutions.
In comparing and contrasting the Early and Late Development of the business systems, they were both characterized by technology development. In the early phase, National Business systems experienced even development both in the UK and the US while in the Late phase, they experienced uneven development (Paprotny, 2020). Gradual increase in consumption happened in the Early phase as compared to the Late phase where there was a suppression of consumption in Germany and Japan, while China experienced uneven markets.
Neoclassical theory happened in the early industrialization phase. It assumed market conditions were perfect; it also assumed perfect profit maximization and equilibrium in the market. Late industrialization was characterized by alternative theoretical routes that found their way in technological changes that implied disequilibrium in the markets, imperfect market information, and sequences of evolution (Paprotny, 2020). Gerhskenkron’s theory also covered both phases of development as it allows diversity in both strategic and organizational planning in different circumstances.
The Late development governments implemented the import-substituting strategy that involved trade barriers that encouraged direct subsidization with domestic industries. The late phase was characterized by the rapid growth of markets due to increased specialization in skilled labor (Paprotny, 2020). In the Early development, industries operated independently, while in the Late phase, there was government intervention in the operations. The state’s intervention was instrumental as it helped in the exchange of currencies to achieve long-term plans.
In a monopolistic market, only one firm dictates the price and supply levels of goods and services and has total market control. The period occurred in the Early development, in contrast to Late development, where there was an existence of a perfectly competitive market composed of many firms where no firm had market control. Oligopoly is a structure with a small number of firms, none of which can keep the others from having significant influence (Paprotny, 2020). Being early or late industrialized relates with this in that the strategies employed are free trade, favoring of export industries; thus, several firms have different influence on a particular industry.
In the UK, industrialization was influenced or driven by railroads. In the US, it was driven by the availability of finance and resources to produce more. In Japan, the Meiji restoration boosted its transportation and communication networks, thus revolutionizing its light industry. In China, the Chinese region went through a modern integrated industrialization process where Japan invested in large, heavy machines, which helped industrialization in china (Paprotny, 2020). In Germany, industrialization was influenced by eliminating trade barriers between German states that paved the way for the bigger and more attractive market for producers.
The UK had access to good railroads to transport their products and get raw materials at ease for their industries compared to Japan. The UK’s market was also readily available compared to that of Japan. Beta stage, the team builds an end-to-end service based on what they have learned. The invention of Spinning Jenny increased the production of textile manufacturers and was very important for cotton. The Spinning mule essentially allowed fast production of yarn using the spinning machine (Paprotny, 2020). The BETA stage would happen to Spinning Jenny because its invention completely overturned a century of old craft and the way of life.
The key difference in national business systems and institutions is that Britain and the US experienced low levels of education while Germany and Japan institutions had high levels of education. Britain and US institutions were characterized by low plant machinery as compared to Germany and Japan that had Better Plant machinery. The other key issue is that increase or decrease in economic growth affects different types of institutions. Some of the key issues in the Late Development theory were Heavy Population pressure, Low Per Capita income, increased rates of unemployment as well as poor wealth distribution.
The institutional differences and Late Development theory are all affected by a decrease or increase in economic growth. The different environmental institutions include less state intervention and heavy independence on market firms. On the other hand, the Late Development theory was characterized by state interventions, and financial support was provided by banks and other institutions. The relevance of the institutions such as banks helps to supply cash into the economy to boost economic activities (Paprotny, 2020). The state plays a key role in ensuring that interest rates are lowered in the case of Japan and Germany during the crisis.
Early development offers faster growth of economic growth because of its low starting base. China is said to be booming than Germany as it has an established network, market-specific expertise, and intercultural competence engagement. The factors of early development and those of late development should be considered in industrialization since most of the them relate and depend on one another for better growth and development. In conclusion, Early development theory is not irrelevant in the Late Development theory, what needs to be done is a careful integration of the two processes for both economic sustainability and growth in globalized countries.
Reference
Paprotny, D. (2020) “Convergence between developed and developing countries: A centennial perspective,” Social Indicators Research, 153(1), pp. 1–33.