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Early And Late Industrialisation Essay

5378 words - 22 pages

Can the concept of ‘early’ and ‘late’ industrialization explain the key institutional and organizational characteristics of national business systems, and do they have any bearing on long-term national competitiveness?


The concept of industrialization has been used among different nations and regions, while many countries have carried out their own industrialization progress during the past several decades, which stimulates the development of organizations and better corporate performance. There are different kinds of national business systems with their distinctive characteristics varying among countries. Then ‘early’ and ‘late’ industrialization is applied to describe two ...view middle of the document...

Theories of ‘early’ and ‘late’ industrialization

The UK was regarded as the pioneer that initially experienced early
industrialization in the eighteenth and nineteenth centuries, which shifted its national economic structure from agricultural to industrial economic, carried out technology innovation, and established its leader industrial position in the world. Soon after, the US took over the leading power because of developing new institution, mechanization, and skilled labor in the early nineteenth century. Gerschenkron (1962) mentioned that the UK’s industrialization is unique since there was no previous technology or innovation to imitate. Both the UK and the US have achieved successful revolution during their industrialization process.

According to Amsden (1989), late industrialization took place within a set of developing countries with economical backwardness from the twentieth century. These states growth were based on raw materials and industry investment, which increased their national income dramatically such as Japan and China. The key features attached to the late development countries are that they generate high income and reform their productive structures by technology learning or improvement from more advances countries. And such economies are accompanied with government intervention, replacement of market mechanism and centralization in leading sectors. In fact, the advanced technology and new institution from early industrialization play significant role for late industrialization countries, which speeding up them to perform better in a short period of time.

Rostow and Gerschenkron are two main theorists that argued with the differences between early and late industrialization. Rostow’s view (1960) focused on the pathway of industrialization that all countries experience different development stages of industrialization, which are the preconditions stage, ‘take-off stage’ and maturity stage. However, his theory such as the pre-conditioned stage is more applicable to the UK and the US, but makes little sense for other countries, especially those late industrialization nations. On the contrary, according to Alexander Gershenkron (1962), countries can be classified into three levels: advanced, moderately backward, and backward. He pointed out that different economic levels have their own requirements and they may not follow the same process of industrialization. Moreover, he raised the most influential theory
related to late industrialization that the economically backward states may have rapider growth rate as they are late comers, and the national development process relied on the degree of economic backwardness. That is to say the more backward a country, the faster it will advance (ibid).

Financial system and Business groups

There are several aspects of early and late industrialization that bring about institutional and organizational characteristics differences among countries. The various financial systems and...

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