14 Arguments for industrial development   strategy

14 Arguments for industrial development   strategy

  1. Industrial products fetch high and stable prices.  Industrial   products   are  free  from  the  adverse effects  of natural  factors  like climate  and they  command   high  prices  on the international   market unlike  agricultural      This leads to an increase in the income of the producers   and better terms of trade for the country.
  2. It facilitates the exploitation and utilization of the idle local resources. This helps to improve on the productive   capacities in the economy hence economic   growth and development
  3. 3. It increases government revenue through taxation.  Industrialization     widens   the  tax  base  in  form of employment   opportunities   created  and various  investments   undertaken   hence  generating more   tax  revenue   to  the  government, The  revenue   realized   is  used   to  construct    social   and economic  infrastructure   like hospitals,   roads,  schools,  power  plants,  roads
  4.    It leads to better standards of living.  Industrialization leads to the production of a variety   of high quality goods and services in the economy.  This widens the choice of consumers   at reduced prices hence better standards of living.
  5. It facilitates technological development in the country. Industrialization    encourages   the use of modem   production   techniques    through   inventions,   innovations    and technology    transfer.   This increases efficiency hence production   of better quality goods and services.
  6.    It improves the balance of payment position of the country.  Industrialization     increases   the production   of high quality goods and services for exports through   value addition.   Such goods compete favorably on the world market hence increasing the export earnings of the country.   In addition,   there is an increase   in the production   of goods and services   for the domestic   market. This  helps  the  country  to save  the  scarce foreign   exchange   earnings   which  would  be  used  for import  purposes  hence better  balance  of payments  position.
  7.    It increases employment opportunities.  This  is  due  to  increased    resource   utilization    and  a number  of production  and other  economic  activities  carried  out. This increases the income of the people.  This is true if labour intensive   techniques of production   are used.
  8.    It leads to the development of social and economic infrastructure.  Industrialization    promotes the development   of the social and economic infrastructures   in form of roads, schools, hospitals, financial institutions   etc. so as to facilitate trade in the economy.
  9. 9. It reduces the dependence of the economy on other economies.  Through   import substitution strategy,   a number   of formally   imported   goods and services   are produced.    This leads   to an increase in self-reliance   and sustenance   of the economy.
  10. It increases urbanization and monetization of an economy. This is because  industrialization promotes trade and commerce in the economy.
  11. It promotes inter sectoral linkages in the economy especially with the agricultural   sector.  This is because agro-based   industries   provide   factor inputs to the agricultural   sector and market   for the products from the agricultural   sector in form of raw materials.
  12. It leads to social cultural transformation. Industrialization  brings about social transformation, equitable distribution   of income and balanced regional development   in the process of economic development.
  13. It increases capital inflow in the country. This because most of the large industries are owned by foreign   investors   who bring   in capital   and efficient   technology.    This   increases    the   level   of investment   in the country.
  14. It increases the GDP of the country. This is   due to increased   production   and economic   activities in the country  which  increases  trade  in the economy  hence  high  levels  of national  income.
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