Can the Concept of ‘Early’ and ‘Late’ Industrialization Explain the Key Institutional and Organizational Characteristics of National Business Systems, and Do They Have Any Bearing on Long-Term National Competitiveness?

Topics: Economics, Japan, Economic growth Pages: 9 (2534 words) Published: February 17, 2013
Can the concept of ‘early’ and ‘late’ industrialization explain the key institutional and organizational characteristics of national business systems, and do they have any bearing on long-term national competitiveness?

Introduction

The concept of industrialization has been used among different nations and regions, while many countries have carried out their own industrialization progress during the past several decades, which stimulates the development of organizations and better corporate performance. There are different kinds of national business systems with their distinctive characteristics varying among countries. Then ‘early’ and ‘late’ industrialization is applied to describe two main types of national businesses that existing in developed and developing countries, which explains the key institutional and organizational differences among countries in particular to some extend. Each country has fallowed different pathway and carried out their industrialization in different period. It is known that the UK is the first country that achieved early industrialization revolution, which was followed by the US. And then in the late twentieth century, Germany, Japan and China implemented their industrialization process with dramatic change on their economic performance.

The purpose of this essay is to use the conception of ‘early’ and ‘late’ industrialization to explain the key institutional and organizational characteristics of national business systems by comparative perspective. First of all, the theories of industrialization will be displayed. Then this paper will concentrate on five main comparative countries, which are United States, Japan, Britain, Germany and China, to clarify major differences of national business systems. Moreover, further implications and debates upon these countries long-term national competitiveness will be given to assess the effectiveness of industrialization.

Theories of ‘early’ and ‘late’ industrialization

The UK was regarded as the pioneer that initially experienced early industrialization in the eighteenth and nineteenth centuries, which shifted its national economic structure from agricultural to industrial economic, carried out technology innovation, and established its leader industrial position in the world. Soon after, the US took over the leading power because of developing new institution, mechanization, and skilled labor in the early nineteenth century. Gerschenkron (1962) mentioned that the UK’s industrialization is unique since there was no previous technology or innovation to imitate. Both the UK and the US have achieved successful revolution during their industrialization process.

According to Amsden (1989), late industrialization took place within a set of developing countries with economical backwardness from the twentieth century. These states growth were based on raw materials and industry investment, which increased their national income dramatically such as Japan and China. The key features attached to the late development countries are that they generate high income and reform their productive structures by technology learning or improvement from more advances countries. And such economies are accompanied with government intervention, replacement of market mechanism and centralization in leading sectors. In fact, the advanced technology and new institution from early industrialization play significant role for late industrialization countries, which speeding up them to perform better in a short period of time.

Rostow and Gerschenkron are two main theorists that argued with the differences between early and late industrialization. Rostow’s view (1960) focused on the pathway of industrialization that all countries experience different development stages of industrialization, which are the preconditions stage, ‘take-off stage’ and maturity stage. However, his theory such as the pre-conditioned stage is more applicable to the UK and the US, but makes...
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