MODULE 4

INDUSTRIALISATION

Industrialisation: The setting up of large organisations or the growth of large-scale

production. This is done through manufacturing, mining, construction, assembling,
energy, power and services.

Industrialisation started in Europe in the 18th century and in Britain people started
investing in machines for production. This is referred to as the Industrial Revolution.
This was the change brought by mechanisation of the manufacturing industry. New
technologies enabled production of large quantities of goods. By the end of the 19 th
century, most countries of Western Europe, North America and Japan had started
industrialising.

In Botswana, industrialisation is still in its infancy stage, i.e. it is new and there are
only fewer industries. It contributes about 12% of employment in the formal sector.

Industry
The production of goods and services other than those produced in agriculture.
Production is done by the use of machines and usually in large factories.

Industrial Production
This is a process which involves the creation of economic activities which concentrate
on the production of goods and provision of services on a large scale by using
complex technology. This process is capital intensive and requires highly skilled
manpower.

Craft Production
It is an economic activity which is carried out on a small scale to produce goods and
provide services using simple technology. It is labour intensive and requires little
skills.
NB. An industrialised country is the one in which goods are produced and services
provided in industries through the use of advanced technology.

INDUSTRIALISATION STRATEGIES

There are two main industrialisation strategies which have been successfully used by
many countries to industrialise. These are Import Substitution Industrialisation (ISI)
and Export Oriented Industrialisation (EOI). These can be implemented through large
and small-scale production, Multi National Companies (MNCs), Joint Ventures, and
Local Companies.

Import Substitution Industrialisation (ISI)

This is a whereby a country starts producing goods and services locally to replace
those that it has been buying from outside. It involves the emergence and expansion
of domestic industries to replace major imports with locally produced products. This

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strategy is used to protect infant industries from foreign competition. A deliberate
effort is usually made to promote local industries through the following:
Putting high tariffs on imported goods
Providing loans and grants to citizens to start industries.
Encouraging students to specialise in science and technology so as to provide the
much needed skills
Setting up national research centres to encourage technical innovations.
Inviting MNCs to invest in the country
Providing the necessary infrastructure such as power, telecommunication, roads etc
Investing directly in heavy industries which are of strategic importance
Controlling workers so as to ensure sustainability at the work place

Export Oriented Industrialisation (EOI)

This involves the emergence and expansion of industries to produce for the foreign
market. This strategy is employed mainly to generate foreign exchange and to create
job opportunities for the locals. It also encourages research, innovation and
development of skills and teaches people about industrial production. It encourages
economies of scale that is; industries can produce more for a bigger market and be
able to cut down on production costs, use cheap local labour and export products that
may not find a market locally.

Multinational Companies (MNCs)

The government may invite foreign companies to come and establish industries in the
country so as to create employment, generate revenue for the country and to make
available goods and services needed by citizens. For advantages and disadvantages
refer to previous notes on MNCs.

Joint Ventures

These are companies that are partly owned y the government and a private company
or by two governments. Examples: BOLUX, BCL, DEBSWANA, SODA ASH.
For advantages and disadvantages refer to previous notes on joint ventures.

Local Investment

This involves encouraging citizens to set up industries in order to promote self-

reliance and reduce dependence on foreign countries.

Characteristics of Modern Industries

Modern industrial production is complex and highly mechanised. A country must

have natural resources, human resources, financial resources and entrepreneurial skills
to help in the production of goods and the provision of services.

Raw Materials

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These may determine the location of industries e.g. industries using large quantities of
bulky raw materials like a cement factory, brick moulding, iron smelting, lumbering
etc and those processing perishables may choose to locate near their sources of raw
material. These are called raw material oriented industries.

Advanced Technology

Modern industries use complex machines/technology, which requires some special

skills to operate.

Division of Labour and Specialisation

For an industry to be more productive, it needs to divide the work into smaller tasks
such that individuals can specialise in a small part of the whole task. Workers are
trained to concentrate on different parts of the production process. This is referred to
as Assembly Line Production – products pass through different stages of production
with workers performing different tasks at each stage.

Automation and Robotics

In modern industries most of the machine processes are controlled by computers such
industries are referred to as high tech industries. In such industries machines handle
goods and only a few skilled workers are required to ensure that the work is properly
done.

Feminisation of the Labour Force

In industries today, women are increasingly doing the jobs that were initially regarded
as men’s jobs. This has been initiated by the following reasons:
Increased mechanisation has done away with more heavy work.
Women excel in work requiring precision and delicacy of touch.
Women appear to tolerate long hours of machine work as compared to men.

Synthetic Products

New technologies have made it possible to replace some natural products with
artificial products e.g. synthetic rubber has been designed from hydrocarbon derived
from petroleum to replace the natural rubber.

Sub–Contration

Because of high specialisation in industries, some companies find it difficult to

complete some tasks alone hence the need to employ other companies to do part of
the job.

Cottage Industries

Some part of the work in manufacturing may be done at the workers home especially
in electronics and textile industries.

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Co-ordination of Specialised Tasks

Large-scale industries are made up of large numbers of specialists e.g. in the mining
industry, there are people specialising in engineering, sales, research, accounting,
advertising etc. a large complex organisation has to co-ordinate these specialised
tasks.

Advantages of Industrialisation

It promotes development.
It creates employment for citizens.
May lead to economic growth since industrialisation may reduce the amount of goods
and services bought outside a country
It promotes mass production of goods and services which may be sold at affordable
prices.
It reduces both internal and external migration.
The government gains revenue.
It promotes economic diversification.

Disadvantages of Industrialisation

Big foreign companies that set up in developing countries lead to the collapse of small
local industries.
Industrialisation leads to increased pollution.
The use of machinery may lead to increasing levels of unemployment and loss of
craftsmanship.
Industries require large pieces of land and this may lead to shortage of land needed for
agricultural production.

Factors Hindering Industrialisation in Third World Countries

Political instability

Countries which are dominated by continuous warfare, spend more money in buying
weapons and repairing the damage caused by war than setting up industries.

Lack of capital

Local companies do not have enough money to invest in industries. Governments on

the other hand may not be willing to assist individuals with money to invest in
industries.

Shortage of Skilled Manpower and Advanced Technology

People in developing countries lack skills to run industries and this makes it difficult
for them to use complex technology.

Infrastructure

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The poor status of roads and telecommunication networks in developing countries is
unable to support industrial development. Developing countries also do not have
adequate educational and health facilities.

Shortage of Markets

Many developing countries have smaller populations the majority of which are poor.
This therefore means that only few gods can be sold locally. Developing countries
therefore have to secure markets for their products in the developed countries.

Shortage of Raw Materials

Some developing countries cannot produce the raw materials needed by industries.
For example some industries may fail to thrive following an outbreak of long periods
of draught which may affect agricultural production.

Unwillingness to Accept Change

Rural populations are in most cases unwilling to accommodate modern technological

innovations. They still stick to their traditional way of life.

Fear of environmental Destruction

Developing countries are conscious about environmental hazards brought by rapid

industrialisation. They try to avoid pollution that may lead to the destruction of
natural life.

Effects of industrialisation in Developing Countries

Positive Effects

There is creation of employment that leads to the improvement of the living standards
of the people.
Governments earn money through taxing industries and employees of these industries.
The money could be used to improve the welfare of citizens.
Industrialisation leads to self-reliance as countries stop importing from developed
countries.
People acquire different skills.
Quality goods are offered and people have a variety of products to choose from.
There is surplus production that leads to savings and increased investment.
Countries start to benefit from trade as they add value to exports than when they
export raw materials.

Negative Effects

Industries are expensive to set up.

Industries cause pollution.
Locals may be offered that require low skills hence low wages while foreigners who
are highly skilled are paid high wages.

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Poor housing, overcrowding and traffic jams are common.
Natural resources may be overused.
The gap between the rich and the poor widens.
Workers begin to work for long hours with little pay.
Working conditions become squalid and unhealthy.
Industrialisation promotes the use of modern production methods that lead to the
neglect of traditional production, agriculture and craft production.
Industries occupy large pieces of land that may lead to shortage of land for other
sectors such as agriculture.
Industrialisation may lead to high employment rates because of the use of machinery.

URBANISATION

Urbanisation: An increase in the proportion of people living in towns as cities as

opposed to those living in the countryside.

Urban area: In Botswana an urban area is a place where 75% of the population
depend on non-agricultural production.

Rural area: In Botswana a rural area is a place where 75% of the population depend
on agricultural production.

Urban Growth: the absolute increase in the physical size of a town or city.

Rural-Urban Migration: The movement of people from the countryside to towns

and cities.

Urban-Urban Migration: The movement of people from one town/city to another.

E.g. from Francistown to Gaborone.

Before the colonial era, many people lived in rural areas with agriculture as the main
economic activity. Towns were established as administrative centres as well as for
training purposes. Great growth of towns and cities was experienced after the colonial
period. These towns and cities attracted many people from the rural areas.

CLASSIFICATION OF SETTLEMENTS

1. By size of the population

Type of Settlement Population size

Isolated dwelling Hamlet
Small Village 101 - 500
Large Village 501 - 2000+
Small Town 2001 - 10000
Large Town 10001 - 100 000
City 100 001 - 1 000 000
Conurbation 1 000 001 - 10 000 000
Megapolis 10 000 000 +

2. By function

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Urban area: a place where a majority of the population is dependent on non-
agricultural employment.

Rural area: a place where a majority of the population is dependent on agricultural

employment.

CAUSES OF URBANISATION

There are two main causes of urbanisation that is Natural Increase and rural-urban
migration.

(a) Natural Increase: The difference between Birth Rate (BR) and Death Rate (DR)
= BR- DR = NI.

(b) Rural-Urban Migration: The movement of people from the countryside to towns
and cities. This can either be due to pull or push factors.

Push Factors: These are socio-economic and political conditions that force people
out of the rural areas.

Lack of improved social amenities: poor health and educational facilities.

Shortage of land for agricultural production
Unreliable rainfall and declining agricultural production
Rural poverty
Mechanisation of agriculture which reduced the need for unskilled labour
Lack of alternative employment opportunities
Social pressure
Poor recreational facilities
Adventure – people moving just to experience how life can workout somewhere else.

Pull Factors: These are socio-economic and political conditions that attract people to
towns and cities.

Improved social amenities

More employment opportunities
Advanced entertainment facilities
Modernity

Effects of Rural-Urban migration

On the rural areas

Positive

Migrant workers sent remittances to family members in villages

They copy skills, ideas and attitudes that they use to develop rural areas
Some invest the money they earn in the development of rural areas
It reduces the family size thus making it easier for those remaining behind to support
their families

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Negative

Low agricultural production – able-bodied young people leave the elderly and the
young to take care of agriculture
Breakdown of families
Neglect of rural areas in favour of urban areas
Deculturalisation

Effects on Urban areas

Positive

Increased reservoir for unskilled labour

Increased market for goods and services provided in towns
Emergence of vocal groups that question a lot of issues

Negative

Overcrowding more especially in the area of housing and social amenities

Emergence of shanty towns/squatter camps
Traffic congestions
Prostitution
Increase in crime
Increased pollution
Easy spread of diseases due to overcrowding
Unemployment rate rises because the size of the population is growing faster than
industrial development

Possible solutions to urbanisation

Setting up of industries in the rural areas

Decentralisation
Promoting balanced development (development must not focus on one area)
Encouraging rural-urban trade (exchange of goods between rural and urban areas)

The formal and the Informal sectors of employment

Formal sector: part of the economy which is organised by large firms and the
government.

Characteristics

Work is carried out in up to date and permanent places

Businesses are run according to laws governing businesses in the country
Workers earn regular wages and salaries
Workers are protected by labour laws
Employees belong to trade unions
Jobs require formal training

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Advantages

The labour force enters into employment contracts

Salaries and wages are guaranteed unless otherwise
Work places are conducive and protected by the law

Disadvantages

Most locals in developing countries lack skills to qualify to enter into such sector
A lot of formalities are required before one is employed
Governed by laws which sometimes disturb the running of the business e.g. closing
times

Informal Sector: part of the economy that operates on a small scale and ad hoc basis
with the work done on temporary places normally the home or the streets.

Characteristics

People are usually self-employed

The job has flexible working conditions and flexible working hours
Jobs are not protected by any law
Wages are not guaranteed; returns are varied and irregular
Workers do not belong to trade unions
It is usually on a small scale, sporadic and disorganised

Advantages

There are no management skills required

It is open to all – little skills needed
Immediate returns are guaranteed
There is an opportunity for self-employment
Skills may be gained which may graduate one into the formal sector
Cheap goods may be sold and prices are negotiable

Disadvantages

Many at times, businesses are in collision with the law

There is illicit trade of selling drugs
Businesses operate on a ‘from hand to mouth’ basis
Operations may be on dirty conditions as standards are seldom met
Salaries are not guaranteed