Industrial Economics

1. CHAPTER # 1 : INTRODUCTION TO
INDUSTRIALISATION
INSTRUCTOR: MR. MANZOOR AHMAD
DEPARTMENT OF ECONOMICS
UNIVERSITY OF SWABI
Lecture # 1

2. Recommend Book
Industrial Economics By A.K Sharma

3. INTRODUCTION
Industrial economics is a branch
of economics with deals with the
problems of firms, entrepreneurs
and industrials and their relationship
with the society.
Industries problems:
Cost minimization
Low yield or production (raw material)
Energy crisis
Declining foreign direct investment
Poor management
Natural disaster
Technological backwardness
Political instability
Shortage of capital to install or maintain industries

4. INTRODUCTION
Alternative names:
In economic literature it is also known by the several
names:
Economics of Industries
Industry and trade
Industrial organization and policy
Commerce
Business Economics
Most of the theories are related
to the Microeconomics.
Branch of Microeconomics(Industrial Economics)

5. INDUSTIRAL REVOLUTIONS
The Industrial Revolution was
a period from the 18th to the 19th
century where major changes
in agriculture, manufacturing,
mining, transport, and technology
had a profound effect on the
socioeconomic and cultural
conditions starting in the
United Kingdom, then
subsequently spreading throughout Europe, North
America, and eventually the world.

6. INDUSTIRAL REVOLUTIONS
In Europe and the United States,
industrialization occurred in the
1700s and 1800s, with the changes
beginning in Britain. This period
is called the Industrial Revolution.
Textile manufacturing became
mechanized, transportation
(canals, railroads, and road systems) became more
efficient, and steam power was introduced. Goods
became more accessible and cheaper.

7. What is INDUSTRALISATION
The process in which a society or country (or world)
transforms itself from a primarily agricultural society into one
based on the manufacturing of goods and services
The process by which traditionally nonindustrial
sectors (such as agriculture , education, health) of an
economy become increasingly similar to the
manufacturing sector of the economy.
Industrialization occurs when industry is introduced on a
large scale to a region or country — for example, when an
economy goes from being based on agriculture to being
based on manufacturing and other industries.

8. Industrialization and Per Capita Income
Generally Standard of Living is measured by Per Capita
Income.
PCI = GDP / Population
Income is directly linked with
the industrialization.
Because industry provides
employment to the skilled,
semi-skilled and unskilled
and unskilled labors.
In developed countries C and
PCI are high due to
industrialization.

9. Top 10 Richest Countries in the World
1. Luxembourg (115,809 US $)
2. Qatar (98,144 US $)
3. Norway (97,607 US $)
4. Switzerland (83,073 US $)
5. Australia ( 66,371 US $)
6. UAE ( 63,626 US $)
7. Denmark (59,709 US $)
8. Sweden (57,638 US $)
9. Canada (50,496 US $)
10. Netherlands ( 50,216 US $)
Source: International Monetary Fund(IMF)

10. Top 10 Most Industrialized Countries in the World
1. Norway
2. Australia
3. United States
4. Netherlands
5. Germany
6. New Zealand
7. Ireland
8. Sweden
9. Switzerland
10. Japan
We do all know that developed nation is a country which has
highly developed economy and advancement in most of the
scientific fields

11. Industrialization And Economic Development
1. Increase in national income
2. Higher standard of living
3. Economic stability
4. Improvement in balance of payments
5. Stimulates progress in other sectors
6. Increased employment opportunities
7. Promotes specialization
8. Rise in agricultural production
9. Easy to control industrial activity
10. Large scope for technological progress
11. Increased saving and investment
12. Development of markets
13. Increase in the Government revenue

12. Patterns of Industrialization
Pattern of industrialization vary
from one country to the other
country.
In England, France and USA is
in private sectors.
In China and Russia it is a public
sector.
In Pakistan and India there is a mixed economy , in
both countries some industries are public and some
are private.

13. Comparison of Developing counties: GDP by sectors
Pakistan:
agriculture: 20.1% industry: 25.5%, services: 54.4%
2012
• India:
agriculture: 13.7%, industry: 21.5%, services: 64.8%-
2013
Bangladesh:
agriculture: 19 %, industry: 30%, services: 51% -2013
Malaysia:
agriculture: 11.2% industry: 40.6% services: 48.1% -
2013
China:
agriculture: 10.1%, industry: 45.3%, services: 44.6% -
2012

14. Comparison of Developed Countries: GDP by sectors
Norway:
agriculture: 2.2%; industry: 45.1%; services: 52.7% -
2009
Australia:
agriculture: 4%, industry: 27.3%, services: 68.8% -2012
U.S:
Agriculture: 1.2% Industry: 19% Services: 80%(2011)
Japan:
agriculture: 1.2%, industry: 27.5%, services: 71.4%
Germany:
agriculture: 0.8%, industry: 28%, services: 71.2% -2012

15. Books on Industrial Revolutions
The First Industrial Nation: The Economic
History of Britain, 1700-1914 By Peter Mathias

16. Books on Industrial Revolutions
Industrial Revolution: People and Perspectives
edited by Jennifer L. Goloboy

17. Books on Industrial Revolutions
The Industrial Revolution in World History
By Peter N Stearns