 Many theories how to spark economic development.
 Generally among the following;
Market planning or Central planning
Agglomeration or Dispersion
Import Substitution or Export Promotion
Basic Needs or Megaproject
 As industrialization advances, may change strategies
based on domestic and international conditions.
 Many mix strategies in their development plan.
Market Planning and Central
Planning
 Use a market system, a centrally planned system, or
some combination of the two.
Market Planning
 Manufacturers decide what to produce, how much to
produce, and where to sell it according to market
(consumer) demand.
 Cost of production, demand for goods and, consumer
willingness and ability to pay determine cost and level
of production.
Central Planning
 Manufacturers told what and how much to produce
and where to sell by a government planning board
which allocates budget.
 Government decisions are based on capabilities and
needs of national economy.
 Few countries are using a wholly centrally planned
economy.
 However, many use a combination of market and
central planning.
 The mix is designed to protect the interests of the
nation in the running of the economy.
http://logodesignconsultant.co
m/blog/government-agencylogos/
http://www.wayoftherail.com/2009/03/19/viarail/via-rail-upgrades-track-station-near-ottawa/
http://logodesignconsultant.com/blog/government-agency-logos/
http://www.taktikadesign.com/blog/tag/energy/
http://logodesignconsultant.co
m/blog/government-agencylogos/
Agglomeration and Dispersion
http://www.cambridge.org/aus/c
atalogue/catalogue.asp?isbn=978
0521805247
http://www.uwec.edu/geography/Ivogeler/w188/border/maquil.htm
http://infranetlab.org/blog/2010/05/bordereconomies-the-maquiladora-exportlandscape/
Agglomeration
 Savings from nearness of industries to one another.
 Infrastructure costs minimized, labour is gathered together, and
investment easily attracted.
 Economies of scale lead to rapid growth in some newly industrialized
countries, capital cities or port areas.
 Rural poor drawn in and rapid urbanization occurs. Growth may cause
overcrowding, pollution, high prices, declining quality of life.
 Eventually problems outweigh benefits and dispersion becomes
favoured.
Dispersion
 Spread industrial development throughout the non-
core areas of the nation, the periphery.
 Requires equal distribution of infrastructure services,
transportation, education and others which slows
progress.
 Allows the periphery to compete in providing jobs and
raising living standards, limits flow of migrants to
cities.
Import Substitution and Export
Promotion
http://ecosquared.wordpress.com/2011/01/30/the-war-on-work-part-2/
http://www.whatsonxiamen.com/news14782.html
Import Substitution
 Replace imported goods with local products.
 1st targets low technology products since labour and raw materials are
inexpensive and product is inexpensive. Textiles, clothing, footwear,
processed foods, furniture and household goods.
 These become the basis for further growth as population learns labour
and management skills, and entrepreneurship.
 Trade barriers protect from foreign competition, make local product
more attractive, but…to much protection discourages growth since little
incentive to improve product or manufacturing techniques.
Export Promotion
 Encourages goods for international sale.
 World Bank reports that export promotion generally fares
better in industrial growth.
 Risks since exports vulnerable to international markets.
 A growing US buys goods from abroad. During recession it
buys fewer goods.
 The economy tied to the state of the American and other
foreign economies.
Basic Needs and Megaprojects
http://www.britannica.com/EBchecked/media/106363/Itaipu-Dam-on-the-Parana-River-at-the-border-of
Basic Needs
 Industries serve local population creating jobs, housing,
clothing, domestic products.
 Usually mixed development strategies.
 Local population receives training basic to their existence.
 Creates a productive, independent, literate, and employed
population, requires long-term commitment
Megaprojects
 Hydro-electricity dams, railway construction,
international airports etc…
 Benefits in infrastructure as the project meets
national need.
 Require a large population, and some less populated
countries now own underused facilities.
 Jobs often only for small group and income
distribution becomes more unbalanced.