Transcript Newly Industrialised Countries

Newly Industrialised
Countries
Location of Newly Industrialised
Countries
There are a number of countries around the world that can be
accurately described as Newly Industrialised Countries
(NIC's). They all share the same characteristics, and one of
the best examples is South Korea.
South Korea is one of the countries in south-east Asia
described as being part of the Tiger Economies. The others
are Taiwan, Singapore and Hong Kong. NIC's share the
characteristics of being:
•An increasing exporter to the world market, usually by
copying existing products and then re-producing them for a
much cheaper price.
•Rapid growth in the manufacturing sector, which results in far
more exports and a rapidly rising GDP.
How have NIC’s been able to develop
so rapidly?
• Considerable natural resources e.g. tin
and rubber in Malaysia.
• Large low cost, hard working labour
supply.
• Government policy geared towards
attracting foreign investment in order
to introduce high tech industries.
• Transnational corporations attracted
by proximity of Chinese market and
also lack of trade union activity,
reliable power supply, efficient
infrastructure, and relaxed pollution
and employment laws.
• Local people were encouraged by
government policies to save part of
their earnings – this generated
considerable capital and enabled
people to invest in their own economy.
There are three stages to the development of
an NIC, from its traditional society to a
developed world society. These are shown on
the diagram and described below. The time
frame for the whole process can be as little
as 30 years.
TRADITIONAL SOCIETY
•Most industry is labour intensive, concentrating on small
cottage-style traditional industries, using local raw materials.
•Examples could include food processing or textile
manufacture.
•Often, the majority of people are still in the primary sector,
doing things such as farming.
•There is little technology and most people have very little
money.
•Most products are imported from abroad, meaning that the
country is relying on other for many of its needs.
IMPORT SUBSTITUTION INDUSTRY
•The country decides to promote its own industries.
•New companies copy products from well-known companies,
and then make them for a far cheaper price.
•The country operates a strict regime of trade tariffs and high
taxes for any similar products being imported into the country.
•This is aimed at protecting their own companies whilst they
grow.
•Example industries are car manufacture, computer
manufacture and the manufacture of other electrical goods,
such as hi-fi's.
EXPORT ORIENTATED INDUSTRY
•Once the new companies have become established in their
own country they are unleashed upon the world market.
•These industries are now capital intensive, using high
technology and aimed at making a big profit.
•The GDP of the country starts to rocket, often growing at well
over 5% per year, which is an amazing rate.
•The country is now described as being an NIC.
What are the disadvantages
of rapid growth?
• Exploitation of labour, especially women
and children.
• Growth of illegal immigrants who take
dirty, dangerous jobs which offer little
legal protection.
• Environmental damage (deforestation,
land degradation, pollution).
• Heavy dependence on foreign
investment means that the economy is
vulnerable to shifts in the global
economy, therefore suffers badly
during times of recession.
Cheap labour: Wages are low
by world standards. Asian
workers are reliable and work
hard for long hours, often in
factories that would not meet
all of the health and safety
standards of those in MEDCs.
Transport: All countries in the
region have access to the
main shipping lanes. The use
of containers has reduced the
cost of transporting
manufactured goods by sea.
The Advantages of
Asia for industrial
location
Market: Although many
factories were set up to export
their products, home markets
within the Asian countries are
increasing as people become
more prosperous.
Government: Although many
governments discourage the
import of manufactured goods,
they encourage the import of
capital and technology to
establish factories and provide
employment.