what is the importance of industrialisation for Navy
Answers
Explanation:
This article also draws upon the East Asian economies’ abilities to allocate resources to stimulate industries and technological development. Despite differences in economic performance, East Asia including China has hugely transformed in the last mere four decades from being very poor, to achieving higher economic growth and incomes, and most of all reducing unemployment and poverty. The big question for academics and social scientists is how was this success achieved in such a short period?
The well-known, Ricardo’s trade theory of ‘comparative advantage’ is the primarily cost-based theory, but it ignores the historical development of industries in the developed countries. His trade theory explains very little about the factors behind the successful move towards industrialisation by some latecomer countries (Siddiqui, 2018d; see 2017c). More recent trade theories, for example, Krugman (1979) and Findlay (1978) acknowledge the important role of technological transfers in order to achieve higher incomes. They note that those developing countries, which have successfully been able to establish industries and advancements in technology thus catch-up with developed countries by adopting the latter’s technology. This is the same argument put forward by Vernon’s life cycle model (1966), which emphasises that the cost of production is a critical factor behind the choice of production moving to developing countries. It is claimed that the industries would shift at the later stages of the product life, from developed to developing countries, and then the developing countries could gain access to advanced technologies and know-how. As a result, this could trigger a process of expansion of manufacturing.