is a process of social and economic change whereby a human group is transformed from a pre-industrial society into an industrial one. It is a part of a wider modernisation process, where social change and economic development are closely related with technological innovation, particularly with the development of large-scale energy and metallurgy production. Industrialisation also introduces a form of philosophical change, where people obtain a different attitude towards their perception of nature.
There is considerable literature on the factors facilitating industrial modernisation and enterprise development. Key positive factors identified by researchers have ranged from favourable political-legal environments for industry and commerce, through abundant natural resources of various kinds, to plentiful supplies of relatively low-cost, skilled and adaptable labour.
One survey of countries in Africa, Asia, the Middle East, and Latin America and the Caribbean in the late 20th century found that high levels of structural differentiation, functional specialisation, and autonomy of economic systems from government were likely to contribute greatly to industrial-commercial growth and prosperity. Amongst other things, relatively open trading systems with zero or low duties on goods imports tended to stimulate industrial cost-efficiency and innovation across the board. Free and flexible labour and other markets also helped raise general business-economic performance levels, as did rapid popular learning capabilities. Positive work ethics in populations at large combined with skills in quickly utilising new technologies and scientific discoveries were likely to boost production and income levels – and as the latter rose, markets for consumer goods and services of all kinds tended to expand and provide a further stimulus to industrial investment and economic growth. By the end of the century, East Asia was one of the most economically successful regions of the world – with free market countries such as Hong Kong being widely seen as models for other, less developed countries around the world to emulate.
The first ever transformation to an industrial economy from an agrarian one was called the Industrial Revolution and this took place in the late 18th and early 19th centuries in a few countries of Western Europe and North America, beginning in Great Britain. This was the first industrialisation in the world's history.
The Second Industrial Revolution describes a later, somewhat less dramatic change which came about in the late 19th century with the widespread availability of electric power, internal-combustion engines, and assembly lines to the already industrialised nations.
The lack of an industrial sector in a country is widely seen as a major handicap in improving a country's economy, and power, pushing many governments to encourage or enforce industrialization.
Most pre-industrial economies had standards of living not much above subsistence, meaning that the majority of the population were focused on producing their means of survival. For example, in medieval Europe, 80% of the labour force was employed in subsistence agriculture.
Some pre-industrial economies, such as classical Athens, have had trade and commerce as significant factors, enjoying wealth far beyond a sustenance standard of living. Famines were frequent in most pre-industrial societies, although some, such as the Netherlands and England of the seventeenth and eighteenth centuries, the Italian city states of the fifteenth century and the ancient Greek and Roman civilisations were able to escape the famine cycle through increasing trade and commercialisation of the agricultural sector. It is estimated that during the seventeenth century Netherlands imported nearly 70% of its grain supply and in the fifth century BC Athens imported three quarters of its total food supply.
Industrialisation through innovation in manufacturing processes first started with the Industrial Revolution in the north-west and midlands of England in the eighteenth century. It spread to Europe and North America in the nineteenth century, and to the rest of the world in the twentieth.
Due to the limited amount of arable land and the overwhelming efficiency of mechanised farming, the increased population could not be dedicated to agriculture. New agricultural techniques allowed a single peasant to feed many workers. However, these techniques also increased the demand for machines and other hardware which had traditionally been provided by the urban artisans. Artisans, collectively called bourgeoisie, employed rural exodus' workers to increase their output and meet the country's needs. The growth of their business coupled with the lack of experience of the new workers pushed a rationalisation and standardisation of the duties the in workshops, thus leading to a division of work, that is, a primitive form of Fordism. The process of creating a good was divided into simple tasks, each one of them being gradually mechanised in order to boost productivity and thus increase income. The accumulation of capital allowed investments in the conception and application of new technologies, enabling the industrialisation process to continue to evolve.
The industrialisation process formed a class of industrial workers who had more money to spend than their agricultural cousins. They spent this on items such as tobacco and sugar; creating new mass markets which stimulated more investment as merchants sought to exploit them.
The mechanisation of production spread to the countries surrounding England in western and northern Europe and to British settler colonies, making those areas the wealthiest and shaping what is now know as the Western world.
Some economic historians argue that the possession of so-called ‘exploitation colonies’ eased the accumulation of capital to the countries that possessed them, speeding up their development. The consequence was that the subject country integrated a bigger economic system in a subaltern position, emulating the countryside who demands manufactured goods and offers raw materials, while the metropole stressed its urban posture, providing goods and importing food. A classical example of this mechanism is said to be the triangular trade, who involved England, southern United States and western Africa. Critics argue that this polarity still affects the world, and has deeply retarded the industrialisation of what is now known as the Third World.
Some have stressed the importance of natural or financial resources that Britain received from its many overseas colonies or that profits from the British slave trade between Africa and the Caribbean helped fuel industrial investment. It has been pointed out, however, that slave trade and the West Indian plantations provided less than 5% of the British national income during the years of the Industrial Revolution.
In a similar way, Russia suffered during the Allied intervention in the Russian Civil War. The Soviet Union's centrally controlled economy decided to invest a big part of its resources to enhance its industrial production and infrastructures in order to assure its own survival, thus becoming a world superpower.
Southern European countries saw a Boom economico during the 1950s-1970s, caused by a healthy integration of the European economy, though their level of development, as well as those of eastern countries, doesn't match the western standards.
A similar state-led developing programme was pursued in virtually all the Third World countries during the Cold War, including the socialist ones, but especially in Sub-Saharan Africa after the decolonisation period. The primary scope of those projects was to achieve self-sufficiency through the local production of previously imported goods, the mechanisation of agriculture and the spread of education and health care. However, all those experiences failed bitterly due to lack of realism: most countries didn't have a pre-industrial bourgeoisie able to carry on a capitalistic development or even a stable and peaceful state. Those aborted experiences left huge debts toward western countries and fueled public corruption.
This starting model was afterwards successfully copied in other larger Eastern and Southern Asian countries, including communist ones. The success of this phenomenon led to a huge wave of offshoring – i.e., Western factories or tertiary corporations choosing to move their activities to countries where the workforce was less expensive and less collectively organised.
China and India, while roughly following this development pattern, made adaptations in line with their own histories and cultures, their major size and importance in the world, and the geo-political ambitions of their governments (etc.).
Currently, China's government is actively investing in expanding its own infrastructures and securing the required energy and raw materials supply channels, is supporting its exports by financing the United States balance payment deficit through the purchase of US treasury bonds, and is strengthening its military in order to endorse a major geopolitical role.
Meanwhile, India's government is investing in specific vanguard economic sectors such as bioengineering, nuclear technology, pharmaceutics, informatics, and technologically-oriented higher education, openly overpassing its needs, with the goal of creating several specialisation poles able to conquer foreign markets.
Both Chinese and Indian corporations have also started to make huge investments in Third World countries, making them significant players in today's world economy.
In recent years, countries like Mexico, Brazil, and Turkey have experienced moderate industrial growth, fueled by exportations going to countries that have bigger economies: the United States, China, and the European Union, respectively. They are sometimes called newly-industrialised countries. Most African and Latin American nations seem to follow a similar scheme. Despite this trend being artificially influenced by the oil price increases since 2003, the phenomenon is not entirely new nor totally speculative (for instance see: Maquiladora). Most analysts conclude in the next few decades the whole world will experience industrialisation, and international inequality will be replaced with social inequality.
In 2005, the USA was the largest producer of industrial output followed by Japan and China, according to International Monetary Fund.
Currently the "international development community" (World Bank, OECD, many United Nations departments, and some other organisations) endorses development policies based on merely poverty reduction, and giving poor populations access to basic services like water purification or primary education. The community does not recognise traditional industrialisation policies as being adecuated to the Third World or beneficial in the longer term, with the perception that it could only create inefficient local industries unable to compete in a free-trade dominated world.