Unit 1 Industrialisation In Module 1 Unit 5 we discussed how rural areas have been affected by development. Now we will look at the industrial development which began in European and North American cities and which has spread to cities in the developing world. We ll first look at the causes and consequences of industrialisation in the North. Then we ll discuss the varied nature of modern industrial production and strategies for industrialisation in the South. This unit is divided into six sections: A B C Causes and consequences of the Industrial Revolution Industrial processes Industrialisation in developing countries D Mining in Namibia E F Textile in Namibia Sustainable ways of increasing the output in mining and textile In this unit you will learn to: describe the historical background to industrial development define the characteristics of modern industrial production, and illustrate them with examples from specific industries describe different strategies for industrialisation and evaluate their advantages and disadvantages understand how mining and textile contribute to the Namibian economy. A Causes and consequences of the Industrial Revolution The Industrial Revolution began in Western Europe in the 18th and 19th centuries. Before discussing how it happened, let s look at some of the events that took place before it. COMMERCIAL concerning trade and money Early trade In the 17th century in Western Europe, a COMMERCIAL revolution took place. During the Middle Ages, flourishing trade had begun to take place in market cities, such as Venice and Amsterdam. This was followed by the formation of nation states. Nations competed both for markets and for goods to trade. New business methods were established for investing money, allowing the exchange of money from one country to the next, and reducing the risks involved in commercial activities.
2 NSSC Development Studies The fastest and easiest way of transporting goods over long distances in the 17th century was by ship. Goods were taken from wherever they were produced to a European sea port, where they were sold in a market. Merchants travelled to Africa and Asia and sold goods or exchanged them for products like spices, sugar, tea, coffee and silk, which they took back to Europe. Dutch merchants trading with the people of the East Indies These sea voyages required a lot of money, because they were long and costly. The money was raised by forming joint-stock companies. These were companies formed by a group of ambitious merchants, who paid for their trading expeditions by pooling their own money together and also by selling shares of stock (like one might buy on a modern stock exchange). The people who bought shares were called shareholders. They gave money to the company before the voyage, and received a share certificate in return. When the merchants returned and sold the goods which they had acquired abroad, the profits were shared among the shareholders. Some joint-stock companies became very powerful, because the government of the nation state in which they were based used its navy and army to protect them. One such company was the Dutch East India Company, whose trading activities led to the establishment of the Cape Colony (in the south-western part of modern South Africa) and the Dutch East Indies (now Indonesia). Mercantilism With the increase in world trade, money became more and more important. Gold and silver coins became the accepted form of money all over the world. Therefore, nations wanted as much of these precious metals as possible. This demand for gold and silver led to a new theory, called mercantilism. In earlier times, a nation state s power had depended on its military strength, but mercantilism was the theory that a nation s power depended not
Module 3 Unit 1 3 WEALTH richness of a country in terms of stock or assets Hint The Aztecs and the Incas were people who were native to South America. RAW MATERIAL natural substances from which an article is made Hint We ll look at the concept of a balance of trade in more detail when we discuss international trade in Unit 3 of this module. ACTIVITY 1 only on its military power but also on its WEALTH. The goal of every European nation was to become as wealthy as possible, by accumulating as much gold and silver as possible. European nations had already begun to acquire wealth by mining gold and silver at home and overseas. For example, Spain had sent explorers to colonise the Americas and to seize the silver and gold mines of the Aztecs and the Incas. With the growth of mercantilism there was a growing need for more and more gold and silver and for other valuable RAW MATERIAL. This was the beginning of European colonialism. European nations took control of other areas of the world with brute force and extracted valuable raw materials which were used by merchants and industrialists back in Europe. Colonies served a definite purpose in the mercantilist system. They were both the source of raw materials that Europeans lacked in their own countries, and they also provided markets in which to sell the finished goods produced in Europe. If a country had a strong navy, like the Netherlands, it could take over colonies. Therefore, companies based in such countries were very successful, and the countries themselves became very rich. With raw materials from the colonies, European countries were able to produce all the manufactured goods they needed. They also used these manufactured goods for trade selling manufactured goods to other countries, as well as buying goods that other countries produced. But remember that the main idea of mercantilism was that countries should accumulate wealth. To accumulate wealth, European countries needed to export more goods than they imported from other countries. Why? If they sold lots of goods, then they received a lot of money in return. And if this amount was more than the amount spent on imported goods, then the country ended up with more money. This is called a favourable balance of trade, which means that there is more money coming in, as earnings for exports, than there is money going out, as payment for imports. By increasing its wealth, a country increased its power and its influence in world affairs. Write down your answers to the following questions in your notebook. 1 Why do you think money became important when European countries began to trade? 2 Why didn t countries exchange goods by bartering? (Bartering, remember, is exchanging one good for another, without using money.) 3 Why do you think people agreed that gold and silver would be the medium of exchange? 4 What was the main goal of mercantilism? 5 Why did trade lead to colonialism?
4 NSSC Development Studies The Industrial Revolution As trade expanded, merchants in the more powerful countries became richer and richer. They tried to find ways of investing their fortunes to make even more money. In the early 18th century, a series of events occurred which allowed them to do this. TEXTILES cloth At this time, inventors in Great Britain found ways of improving the processes involved in making TEXTILES. New technology made it possible to drive machinery by water power and later by steam power. The whole process of turning raw wool or cotton into thread, and thread into cloth, was speeded up. Factories were set up, using the new technology to produce large quantities of cloth. But factories don t need only machinery, they also need labour. Where did the factory workers come from? A textiles factory during the Industrial Revolution At about the same time as the factories were being set up, technological advances in farming led to increases in agricultural production. As a result, fewer people were needed to work on farms to produce food for the nation, and many workers moved from the farming areas to work in the new factories. As more and more people moved to the areas where the factories were based, these areas grew into large manufacturing cities, such as Liverpool and Manchester. The factories brought together huge machines and large numbers of workers. Production occurred on a much larger scale than had ever been achieved before. This was the beginning of the era known as the Industrial Revolution. Hint Much of North America was a colony of Britain in the 18th century, but it became independent as the United States of America (USA) in 1776. The new industries also needed raw materials. Britain had many natural resources for industrialisation, such as coal which was then used to power the steam engines. It also took raw materials from its colonies, such as cotton from North America, which was manufactured into cloth. The following diagram shows how industrialisation in Britain was made possible by the following: workers freed from agriculture, money from wealthy investors, and raw materials from colonies.
Module 3 Unit 1 5 Advances in agriculture meant fewer farm workers were needed to produce enough food Wealthy people who profited from early overseas trade Countries with natural resources or with colonies from which to take resources Available workers Money to invest Raw materials lndustrialisation (large-scale factory production) As the above diagram shows, industry required lots of money capital, labour and raw materials. Therefore, only countries with wealthy investors, industrial technology, plenty of labour, and lots of raw materials from their own land or from their colonies could go through an industrial revolution. Great Britain was the first country to industrialise, as we have seen, beginning in the 18th century. In the 19th century, Germany and other European nations started the process of industrialisation, and so did the USA. By the end of the 19th century, Japan was also beginning to industrialise. The other countries of the world became the suppliers and customers of the industrialised countries. PRIMARY GOODS raw materials SECONDARY GOODS manufactured products This pattern of industrialisation, established in the 19th century, continued until the middle of the 20th century. The world economy was dominated by a few industrial powers which produced all the world s manufactured goods. The non-industrialised countries made money by selling PRIMARY GOODS to the industrialised countries, and these goods were manufactured into finished products and sold back to the countries which supplied them. We call the manufactured goods the SECONDARY PRODUCTS, because they have been transformed into a secondary state by the industrial process. In this process of exchange, the industrialised country sells the secondary product at a much higher price than it paid for the primary goods. Therefore it makes a much bigger profit than the non-industrialised country which originally sold the primary goods. But if the non-industrialised countries want manufactured goods, they are forced to buy them at this high price, because this is the only way they can get them. DEPENDENT having to rely on someone for support For this reason, the non-industrialised countries are said to be DEPENDENT on the industrialised countires, because they have no alternative but to buy manufactured goods in this way. Many of the dependent countries have continued to concentrate on producing primary goods. Therefore, a large portion of their population is involved in agriculture. They lack the technology for industrialisation and lack the wealth to invest in it, and all they have is raw materials found in their own soil.
6 NSSC Development Studies ACTIVITY 2 Hint Neo means new. Therefore, neocolonialism simply means new colonialism. Sometimes this word is written like this: neo-colonialism. Study the diagram on page 5 and answer the following questions. Try not to spend more than 20 minutes on this activity. 1 a Why were there plenty of available workers for factories in 18th century Britain? b How were the British still able to feed themselves when fewer people worked in agriculture? 2 a Why did European countries have the money to invest in the new industries? b Why didn t the non-industrialised countries do the same thing? 3 a How did the European countries acquire the necessary raw materials for the new industries? b Why didn t the non-industrialised countries keep their primary goods to manufacture themselves? Neocolonialism In the past 40 years, almost all the former colonies of the industrialised world have become independent. The governments of these developing countries make their own laws and rule their countries as they see fit. But these countries still have to follow the rules of the global economy. Because they do not have advanced industries of their own, they must still buy whatever manufactured products they want from the industrialised countries. Therefore, it is often argued that these countries are only independent politically, but they are still economically dependent on the former colonial powers. This pattern of trade has placed many developing countries at a severe disadvantage, because they export one or two primary products for their income and import almost all their manufactured goods. They need to trade with the industrialised countries and often invite multi-national companies from these countries to invest in their own countries. They trade at a disadvantage, because they pay more for manufactured goods than they receive for their primary goods. These developing countries are therefore in a relationship called neocolonialism. This means that developing countries are just as dependent on the industrialised countries as they were before independence. B Industrial processes Modern industrial production involves complex machinery and advanced technology. Machines in factories manufacture secondary goods from primary materials. They are designed specially for the task they are performing. The machines are directed and regulated by people, but they can make things more accurately and reliably than people can. They can be used for longer periods of time than humans. Some machines are programmed by people using computers, and the goods produced are not handled by people at all during the whole production process.
Module 3 Unit 1 7 ABUNDANT enough of something In order to industrialise, a country must have natural resources (land), human resources (labour) and financial resources (capital). It therefore needs to have: a wide range of available raw materials a constant supply of energy (electricity generated by coal, oil, water or nuclear power stations) a large number of engineers who design the machines a dependable supply of both skilled and unskilled workers money to invest in industrialisation. As a result, wealthy countries with sophisticated educational institutions, ABUNDANT energy supplies, and money to buy raw materials and to invest in building factories, have a tremendous advantage over other countries which lack these resources. When you learnt about production in Module 1, you saw how goods were produced. Now let s look at the production processes involved in large modern factories. INPUTS MANUFACTURING OUTPUTS PROCESSES Raw materials Large-scale factory Finished products production Capital Capital goods Complex technology Products for further processing Enterprise Capital money Electrical power By-products Labour Division of labour Waste products SITED provided with a site, i.e. given a place You should already understand the concepts of inputs and outputs from Module 1. If you need to refresh your memory, go back and read the section on inputs and outputs again. Now let s look at each of the different elements of industrial production in turn: Capital is needed to start a business, and enterprise. The following inputs are also needed: Raw materials: These have to be brought to factories easily and cheaply. In the past, transport costs were very high, and therefore many industries were located close to their raw materials. Some industries are still SITED close to their raw materials, especially when these raw materials are heavy. Examples of such industries are cement factories, brick works, marble factories and timber works. Other industries were sited near to railways which transported the raw materials to them, but nowadays modern factories are served by trucks and need to be on a good road system. Many modern industries require a number of different raw materials, which do not usually come from the same place, therefore the transport system is vital.
8 NSSC Development Studies Capital goods: These are the factory buildings, machinery and equipment needed for production or which help to produce other goods. Capital money: This is the money to start the business and to keep it running successfully. Labour: This includes the people employed in the factory, offices and transport sections of the business. Manufacturing processes: Large-scale production: Factory production is usually large-scale and capital intensive. Complex technology: Factory production requires complex technology. The machinery is very complicated and expensive, and it requires special tools to produce and repair it. Power: Most factory production uses electrical power. Some factories may use gas or coal, especially in industries where heating processes are involved, but electrical power is essential. In order for factories to run efficiently, they need to have a plentiful supply of power which is regular and does not break down. This is why they are often sited near to power stations. In developing countries, this means that most of the large factories are located in the largest cities, because this is where the power stations are. Division of labour: Factory production is more efficient if there is a division of labour, as you have already learnt. In other words, each worker specialises in a particular part of the work. In some modern factories, each worker completes only a small part of the entire task, and the whole production process is done by a number of workers in this way. Each of the workers becomes a specialist at their job because they do it over and over again each day. In a television factory, for example, one worker might put the screen in place, and another might only put on the control knobs. By the time the television is complete, 20 or 30 workers may have had a role in putting it together. In most car factories too, workers perform specific tasks to put cars together on an assembly line. Barden Motors assembly point in Windhoek
Module 3 Unit 1 9 ASSEMBLY LINE an arrangement of workers and machines in which each person has only one job Factories can pollute lakes with dangerous chemicals Because the workers do only one small task each, they can work on many products in a day, and the factory can produce many finished products. This is known as mass production. The workers become experts at their one job, but they do not require a high level of education to do it. They are called unskilled or semi-skilled workers. But someone also needs to co-ordinate these specialised tasks so that the product is of a high quality at the end of the day. Therefore, a few highly skilled workers are needed to see that the machinery on the ASSEMBLY LINE is working properly and that the whole process is efficient. The following outputs are produced: Finished products: These are the final goods which are ready to go to the customers, such as clothing, cars or furniture. They go directly to be sold to the public, and are called consumer goods. Products for further processing: These are goods that need to go to another factory to be made into finished products. An example is material which is made in one factory, but which has to go to another factory to be made into clothes. Other examples are plastics which are made in chemical works these need to go to another factory to be shaped and made into useful plastic goods. These are called producer goods. By-products: These are additional things that come out of the manufacturing process but which are of no use to the manufacturer. For example, in a factory which makes clothes, there will be many little bits of cloth left over. These are of no use to the clothing manufacturer, but they can be sold to carpet manufacturers or paper manufacturers, who use them in their their processes. Another example is the hops used in making beer, which is left over from the process, but can be made into animal feed. Waste products: These are things that result from the manufacturing process which are of no use for further processing. The most common waste products are smoke, fumes and chemicals, which can pollute the air and water supplies and need to be controlled. An example is the dye used to colour cloth, which has to be disposed of safely, otherwise it can harm humans and wildlife. Other waste products are less harmful, such as the pieces of material left over when a garment is made, which are too small to be useful. But even they have to be disposed of, so as not to cause ugly rubbish dumps.
10 NSSC Development Studies ACTIVITY 3 Answer the following questions in your notebook. They shouldn t take you more than 20 minutes. 1 What are the factors of production? 2 a What advantages does modern industry have over traditional hand-made production? b Are there some products which are better if they are hand- made, one at a time? Explain your answer. 3 a What are the advantages of division of labour? b Would you enjoy a job on an assembly line? Explain why or why not. So far we have discussed industry in general. But we can divide industry into two main types: Heavy industry: This is industry that uses heavy raw materials and heavy equipment. Examples are mining, power production, heavy engineering and the production of steel, chemicals, cement and building materials. Light industry: This is industrial production which uses lighter raw materials and which produces consumer goods such as textiles, electrical goods and processed food. Now let s go on to look at other types of industry. High-tech industries Hint High-tech is short for high technology. COMPONENTS parts In more and more modern factories most of the machine processes are controlled by computers. For example, modern car factories now use very complex computerised technology. Such industries are called high-tech industries. High-tech industries employ much less labour than industries which use mass production methods. The workers who are employed in high-tech industries need to be highly skilled and specialised. High-tech industries require a great deal of research for their technology and large amounts of capital to set it up. Most of these industries are based in the industrialised countries which have highly educated people to develop them. They also have multinational companies which are in their own countries or are from overseas and have the capital to invest in them. Some of these industries bring together COMPONENTS which have been manufactured in different parts of the world. When this happens, a number of industries are linked together, creating a very complicated system of production. High-technology and complex division of labour As high-technology has to do with the fact that most of the work is done by machines such as computers, the presence of high-tech is also a sign of an industrialised country. We have seen that it takes many years and different stages for a country to become industrialised. Complex division of labour is possible in more developed countries as they have more machines to perform the tasks and more skilled workers to manage the process.