Need for Industrialisation
The need for and role of industrial sector have been fully recognized by the development thinking all over the world. Industrial sector through its forward and backward linkages with other sectors plays a very important role in achieving rapid growth and development. Most modern and rich countries have well developed industrial sector through their early industrial revolution.
Industrialization means widespread development of manufacturing vast quantities of goods, employing a large number of people, promoting international market, characterization of specialized skill, science, technology, increasing application of electrical, electronic, computer technologies to enhance productivity. Absence of such rigorous industrialization is the main reason for the backwardness of many poor countries too.
Hence, the modern development strategies attach more emphasis to rapid industrialization to achieve faster growth and progress. The following are some of the important needs for the industrial sector.
Vigorous industrialization ensures a solid and sustained base to increase the national income of an economy. A larger share of national income of industrially advanced economies comes from industrial sector.
Availability of surplus labour and unemployment are the major challenges of development strategy. Industrialization uses the productive resources of the economy and expands employment opportunities which in turn will improve the income and well-being of the people.
The increasing national income through industrialization helps to meet the demands of the people for industrial products. It is also expected to improve the standard of living of the people by increasing their per capita income. This is possible only through a well designed growth process.
Industrially advanced countries are able to export more and earn large foreign exchange. The income elasticity of industrial goods is very high than that of the primary goods. Hence, exports can be promoted to earn adequate foreign exchange by producing advanced industrial goods.
Expanding employment opportunities, income generation through rapid industrialisation will also lead to increased saving and capital formation in the economy. This will help to diversify and expand the industrial base further through higher investment.
Industrial sector will also promote technological progress through its course of development and expansion. The technological advancements and their dynamic contents provide the required elements to strengthen the economy as a whole.