Industrialisation is the process of social and economic change that transforms a human group from a pre-industrial society into an industrial one. It is a part of a wider modernisation process, where social change and economic development are closely related with technological innovation, particularly with the development of large-scale energy and metallurgy production. It is the extensive organisation of an economy for the purpose of manufacturing.

Industrialisation also introduces a form of philosophical change where people obtain a different attitude towards their perception of nature, and a sociological process of ubiquitous rationalisation.

There is considerable literature on the factors facilitating industrial modernisation and enterprise development.Key positive factors identified by researchers have ranged from favourable political-legal environments for industry and commerce, through abundant natural resources of various kinds, to plentiful supplies of relatively low-cost, skilled and adaptablelabour.

One survey of countries in Africa, Latin America, the Caribbean, and the Middle East and the rest of Asia in the late 20th century found that high levels of structural differentiation, functional specialisation, and autonomy of economic systems from government were likely to contribute greatly to industrial-commercial growth and prosperity. Amongst other things, relatively open trading systems with zero or low duties on imported goods tended to stimulate industrial cost-efficiency and innovation across the board. Free and flexible labour and othermarkets also helped raise general business-economic performance levels, as did rapid popular learning capabilities.

Positive work ethics in populations at large combined with skills in quickly utilising new technologies and scientific discoveries were likely to boost production and income levels – and as the latter rose, markets for consumer goods and services of all kinds tended to expand and provide a further stimulus to industrial investment and economic growth. By the end of the century, East Asia was one of the most economically successful regions of the world – with free market countries such as Hong Kong being widely seen as models for other, less developed countries around the world to emulate. The first country to industrialise was Great Britain during the Industrial Revolution.

Description

According to the original sector classification of Jean Fourastié, an economy consists of a "Primary sector" of commodity production (farming, livestock breeding, exploitation of mineral resources), a "secondary sector" of manufacturing and processing, and a "Tertiary Sector" of service industries. The industrialisation process is historically based on the expansion of the secondary sector in an economy dominated by primary activities.

The first ever transformation to an industrial economy from an agrarian one was called the Industrial Revolution and this took place in the late 18th and early 19th centuries in a few countries of Western Europe and North America, beginning in Great Britain. This was the first industrialisation in the world's history.

The Second Industrial Revolution describes a later, somewhat less dramatic change that came about in the late 19th century with the widespread availability of electric power, internal combustion engines, and assembly lines to the already industrialised nations.

The lack of an industrial sector in a country is widely seen as a major handicap in improving a country's economy, and power, pushing many governments to encourage or enforce industrialisation.

History of industrialisation

Most pre-industrial economies had standards of living not much abovesubsistence, among that the majority of the population were focused on producing their means of survival. For example, in medieval Europe, 80% of the labour force was employed in subsistence agriculture.

Some pre-industrial economies, such as classical Athens, had trade and commerce as significant factors, so native Greeks could enjoy wealth far beyond a sustenance standard of living through the use of slavery. Famineswere frequent in most pre-industrial societies, although some, such as the Netherlands and England of the seventeenth and eighteenth centuries, theItalian city states of the fifteenth century, the medieval Islamic Caliphate, and the ancient Greek and Roman civilisations were able to escape the famine cycle through increasing trade and commercialisation of theagricultural sector. It is estimated that during the seventeenth century Netherlands imported nearly 70% of its grain supply and in the fifth century BC Athens imported three quarters of its total food supply.

Industrialisation through innovation in manufacturing processes first started with the Industrial Revolution in the north-west and Midlands of England in the eighteenth century. It spread to Europe and North America in the nineteenth.

Industrial revolution in Western Europe 

In the eighteenth and nineteenth centuries, Great Britain experienced a massive increase in agricultural productivity known as the British Agricultural Revolution, which enabled an unprecedented population growth, freeing a significant percentage of the workforce from farming, and helping to drive the Industrial Revolution.

Due to the limited amount of arable land and the overwhelming efficiency of mechanisedfarming, the increased population could not be dedicated to agriculture. New agricultural techniques allowed a single peasant to feed more workers than previously; however, these techniques also increased the demand for machines and other hardwares, which had traditionally been provided by the urban artisans. Artisans, collectively called bourgeoisie, employed rural exodus workers to increase their output and meet the country's needs.

The growth of their business coupled with the lack of experience of the new workers pushed arationalisation and standardisation of the duties the in workshops, thus leading to a division of labour, that is, a primitive form of Fordism. The process of creating a good was divided into simple tasks, each one of them being gradually mechanised in order to boost productivity and thus increase income.

The accumulation of capital allowed investments in the conception and application of new technologies, enabling the industrialisation process to continue to evolve. The industrialisation process formed a class of industrial workers who had more money to spend than their agricultural cousins. They spent this on items such as tobacco and sugar, creating new mass markets that stimulated more investment as merchants sought to exploit them.

The mechanisation of production spread to the countries surrounding England in western and northern Europe and to British settler colonies, helping to make those areas the wealthiest, and shaping what is now known as the Western world.

Some economic historians argue that the possession of so-called ‘exploitation colonies’ eased the accumulation of capital to the countries that possessed them, speeding up their development. The consequence was that the subject country integrated a bigger economic system in a subaltern position, emulating the countryside, which demands manufactured goods and offers raw materials, while the colonial power stressed its urban posture, providing goods and importing food. A classical example of this mechanism is said to be the triangular trade, which involved England, southern United States and western Africa. Critics argue that this polarity still affects the world, and has deeply retarded industrialisation of what is now known as the Third World.

Some have stressed the importance of natural or financial resources that Britain received from its many overseas colonies or that profits from the British slave trade between Africa and the Caribbean helped fuel industrial investment.

Early industrialisation in other countries

After the Convention of Kanagawa issued by Commodore Matthew C. Perry forced Japan to open the ports of Shimoda and Hakodate to American trade, the Japanese government realised that drastic reforms were necessary to stave off Western influence. The Tokugawa shogunate abolished the feudal system. The government instituted military reforms to modernise the Japanese army and also constructed the base for industrialisation. In the 1870s, the Meiji government vigorously promoted technological and industrial development that eventually changed Japan to a powerful modern country.

In a similar way, Russia suffered during the Allied intervention in the Russian Civil War. The Soviet Union's centrally controlled economydecided to invest a big part of its resources to enhance its industrial production and infrastructures to assure its survival, thus becoming a world superpower.

During the Cold war, the other European socialist countries, organised under the Comecon framework, followed the same developing scheme, albeit with a less emphasis on heavy industry.

Southern European countries saw a moderate industrialisation during the 1950s-1970s, caused by a healthy integration of the European economy, though their level of development, as well as those of eastern countries, doesn't match the western standards.

The Third World

A similar state-led developing programme was pursued in virtually all the Third World countries during the Cold War, including the socialistones, but especially in Sub-Saharan Africa after the decolonisation period.^{[citation needed]} The primary scope of those projects was to achieveself-sufficiency through the local production of previously imported goods, the mechanisation of agriculture and the spread of education andhealth care. However, all those experiences failed bitterly due to a lack of realism: most countries didn't have a pre-industrial bourgeoisie able to carry on a capitalistic development or even a stable and peaceful state. Those aborted experiences left huge debts toward western countries and fuelled public corruption.

Petrol producing countries

Oil-rich countries saw similar failures in their economic choices. An EIA report stated that OPEC member nations were projected to earn a net amount of $1.251 trillion in 2008 from their oil exports.^[11] Because oil is both important and expensive, regions that had big reserves of oilhad huge liquidity incomes. However, this was rarely followed by economic development. Experience shows that local elites were unable to re-invest the petrodollars obtained through oil export, and currency is wasted in luxury goods.

This is particularly evident in the Persian Gulf states, where the per capita income is comparable to those of western nations, but where no industrialisation has started. Apart from two little countries (Bahrain and the United Arab Emirates), Arab states have not diversified their economies, and no replacement for the upcoming end of oil reserves is envisaged.

Industrialisation in Asia

Apart from Japan, where industrialisation began in the late 19th century, a different pattern of industrialisation followed in East Asia. One of the fastest rates of industrialisation occurred in the late 20th century across four countries known as the Asian tigers thanks to the existence of stable governments and well structured societies, strategic locations, heavy foreign investments, a low cost skilled and motivatedworkforce, a competitive exchange rate, and low custom duties.

In the case of South Korea, the largest of the four Asian tigers, a very fast paced industrialisation took place as it quickly moved away from the manufacturing of value added goods in the 1950s and 60s into the more advanced steel, shipbuilding and automobile industry in the 1970s and 80s, focusing on the high-tech and service industry in the 1990s and 2000s. As a result, South Korea became a major economic power and today is one of the wealthiest countries in Asia.

This starting model was afterwards successfully copied in other larger Eastern and Southern Asian countries, including communist ones. The success of this phenomenon led to a huge wave of offshoring – i.e., Western factories or Tertiary Sector corporations choosing to move their activities to countries where the workforce was less expensive and less collectively organised.

China and India, while roughly following this development pattern, made adaptations in line with their own histories and cultures, their major size and importance in the world, and the geo-political ambitions of their governments (etc.).

Currently, China's government is actively investing in expanding its own infrastructures and securing the required energy and raw materials supply channels, is supporting its exports by financing the United States balance payment deficit through the purchase of US treasury bonds, and is strengthening its military in order to endorse a major geopolitical role.

Meanwhile, India's government is investing in economic sectors such as bioengineering, nuclear technology, pharmaceutics, informatics, and technologically-oriented higher education, exceeding its needs, with the goal of creating several specialisation poles able to conquer foreign markets.

Both China and India, particularly the Chinese, have also started to make significant investments in other developing countries, making them significant players in today's world economy.

Newly industrialised countries

In recent decades, a few countries in Latin America, Asia, and Africa, such as Turkey, South Africa, Malaysia, Philippines and Mexico have experienced substantial industrial growth, fuelled by exportations going to countries that have bigger economies: the United States, Peru, China, India and the EU. They are sometimes called newly industrialised countries.

Despite this trend being artificially influenced by the oil price increases since 2003, the phenomenon is not entirely new nor totally speculative (for instance see: Maquiladora).