INDUSTRIALIZATION

The First Industrial Revolution

 Took place from the 1700s to the mid-1800s

 The ever increasing demand of people for more
goods, steam engine trains, and many machine
tools, an essential factor at that time
 The demand to transport goods led the way for
railroad were the primary energy resources
 Iron and coal used for steam engines for more
operations in factories
The Second Industrial Revolution

 Took place from the mid 1800s to the mid-

1900s with Europe and the USA taking the lead
 The second industrial revolution brought about
the so called “modern life”
 Nature greatly utilized for the production of
goods and services of food
 Entrepreneurship, international trade, and
creation of markets for trading shares of stocks
 Immense cultivation of knowledge in science and
applied technology
 Steam, electricity, and engine-powered boats, cars,
and airplanes made transportation of goods and
services faster and more reliable
 The impossible became possible, like food
preservation with the use of refrigeration and canning
 The farmers were displaced and became workers in
factories
 Photography, music, motion pictures were
introduced
 Publishing industry making information
available everywhere in newspapers and other
published materials
 More exports, steel production, shipbuilding,
and factories
 The Third Industrial Revolution

 Mid-1900s to 1999
 This era revolved around computerization, market
competition, and globalization
 Scientific management continued to be developed
 The Toyota Production System was introduced
which revolutionized the production of cars taking
over the car manufacturing world market
 In 1982, Deming introduced the philosophy on
“Fourteen Points” of quality management
 In 1987, Motorola introduced a better total
quality tool called the “Six Sigma”
 Total Quality Management was widely taught
and studied in colleges and universities
 US, Japan, Germany – sophisticated computer
technology, high speed travel air capability
 Led the way to the transfer of multi national
companies to Asia because of cheaper
materials and albor
 China began dominating the globalized
economy by selling garments, toys,
technological products, household things, and
other consumer prodcts at the cheapest price.
The fourth Industrial Revolution

 From the year 2000 to the present time or more

commonly known as the 21st century
 Management systems like Total Quality
Management, Lean Production, and the Six Sigma
became widely practiced nationwide
 More production of goods and services traded in a
globalized economy
 To improve productivity to increase the standard of
living
 Focused on biotechnology, additive manufacturing
(3D printing), and transportation
 Almost everywhere, regardless of social status or
even social media account, has one or more smart
device
 Public transportation that are run by automated
technology
 Samsung and Hyundai continuously develop self-
driving automobiles
 Industrialization

 Mechanized methods of mass production are

an essential component of this transition.
 The positive characteristics of
industrialization include economic growth, a
more efficient division of labor, and a growth
spurt in technological innovation.
 Industrialization

 Industrialization can be driven by a combination of factors including

government policy, labor-saving inventions, entrepreneurial
ambitions, and a demand for goods and services. It has profound
implications for the population, causing a wave of migration from
small farms to cities and towns where jobs can be found.
 The most dramatic example in recent history is that of China, where
government policy changes in the late 20th century led to the
nation's transition from an economy based on subsistence farming
to a global manufacturing powerhouse.
 Effects of Industrialization

 1. allowed for the mass production of commercial goods

 2. transportation, finance, and communications industries all expanded
 3. led to increased labor specialization
 4. motivating a rapid demographic shift. People left rural areas in large
numbers, seeking jobs in budding industries.
 5. led to unprecedented expansion in wealth and financial well-being for
some.
 6. led to unprecedented expansion in wealth and financial well-being for
some.
 Manufacturing. Industrialization began with the invention of
machines that greatly increased the manufacture of goods.
 Transportation. The 19th century was a period of unparalleled
innovation in ways to transport goods from and to marketplaces.
 Mining. Many of the great inventions of the 19th century were
developed to serve the mining industry.
 Retailing. Before contactless payments and self-service
checkouts, there were innovations in retailing that were designed to
appeal to 19th century shoppers.
 Effects of Industrialization
(Industrialization Changes Life)

 The factory system changes the way people live and work,
introducing a variety of problems.
 Factory Work.
Factories pay more than farms, spur demand for more
luxurious and more expensive goods.
Work becomes separated from home life.
 Industrial Cities Rise
Urbanization—city-building and movement of people to cities
Growing population provides work force and a market
for factory goods
 Living Conditions In Industrial Cities
Sickness widespread; epidemics, like
cholera, sweep urban slums
Wealthy merchants, factory owners
live in luxurious suburban homes
Rapidly growing cities lack sanitary
codes and building codes
Cities also without adequate housing,
education, and police
protection
Modes of Industrialization
 Mercantilism was a form of economic nationalism
that sought to increase the prosperity and power of a
nation through restrictive trade practices. Its goal
was to increase the supply of a state's gold and silver
with exports rather than to deplete it through
imports.
 Mercantilism was based on the idea that a nation's
wealth and power were best served by increasing
exports and limiting imports.
 2. Exportation – surplus
 3. Importation - shortage
4. import-substituting industrialization
 Import substitution industrialization (ISI) is a
theory of economics typically adhered to by
developing countries or emerging market
nations that seek to decrease their
dependence on developed countries.
 The primary goal of the implemented substitution
industrialization theory is to protect, strengthen, and grow local
industries using a variety of tactics, including tariffs, import
quotas, and subsidized government loans. Countries
implementing this theory attempt to shore up production
channels for each stage of a product's development.
 ISI runs directly counter to the comparative advantage concept
that occurs when countries specialize in producing goods at a
lower opportunity cost and export them.
 5. laissez-faire or free-market approach that encouraged foreign
trade, providing new outlets for industrial output.
 Laissez-faire is an economic theory dating back to the 18th
century that opposes any government intervention in business
affairs. The driving principle behind laissez-faire economics is that
the less the government is involved in the economy, the better off
business, and society as a whole, will be.
 It is a French term that translates to "leave alone," or more
literally to "let you do."
6. Protectionism – increasing
tariffs, import quotas, or more
regulations to products derived
from other countries
 Today,we are experiencing the 5th industrial
revolution (industrialization), where goods
and services are available that were
considered impossible half a century earlier.
There is a price that must be paid with a
modernized, industrialized economy. We
need to constantly visit our laws and policies
t protect the future generation from total
degradation.
 COSTS OF INDUSTRIALIZATION

 1. Environmental Disadvantages. One negative

byproduct of industrialization is environmental pollution that
harms human health.
 2. Financial Disadvantages. Industrialization results in a
wider gap between the rich and poor due to a division of labor
and capital. Those who own capital tend to accumulate
excessive profits derived from their economic activities,
resulting in a higher disparity of income and wealth.
.
• Social Disadvantages.
• Poor living and working conditions
• Exposure to hazardous conditions
• Child labor
• Unchecked pollution
• Overuse of fossil fuels
• The mechanization of farming, with questionable health
benefits
 New Ideas About Economics

 Adam Smith
 Leading advocate of Laissez-Faire economics
 Published book “Wealth of Nations”
 Promoted a market economy -- wrote all
markets should be free of government
intervention and regulation.
 Businesses can freely compete against one
another
 Thomas Malthus
 Wrotethat population growth would
always grow faster than food production.
 Believedonly war, disease, famine and
decreased reproduction would cure this
problem.
 Believed the poor should have less
children.
 Robert Owen
 Thought that for the good of all, the
government, not the individuals should own
property and control industry.
 This concept is known as Socialism.
 Built towns around his mills to demonstrate.
 Provided free schools, non-profit shops, better
working conditions and decent housing.
 In turn imposed strict rules on workers
 Karl Marx
 Declared as capitalism grew, more and more workers would
descend into poverty and in time would rebel and capture
the “means of production”
 Workers would then establish a society based on
cooperation and an equal distribution of wealth.
 Workers would have to control the government.
 Communism – System in which the government owns
almost all means of production and controls economic
planning.