Chapter 9 Industrialization and trade This chapter presents a discussion on a few major recurring themes that have been prominent in the literature on industrialization. The chapter discusses the initial conditions at the beginning of the post colonial period and their relation to subsequent industrial development. The chapter describes the determinants of the growing relative importance of the sector. Productivity growth and its relation to international trade orientation are discussed at the sectoral level. The chapter also discusses studies of the efficiency of individual firms. The employment effects of industrialization are examined and conclusions are presented. The LewisFeiRanis two sector model provides a useful guide to the role of manufacturing in the development process of a country without an international trade sector. In the immediate post war period the potential for industrial development varied considerably among less developed countries (LDCs). In Brazil Egypt and Indiafor example relatively large manufacturing firms had 60 or 70 years of industrial experience primarily in food processing and textiles. Two countries the Republic of Korea and Taiwan which would later prove quite successful possessed a considerable base of education and industrial experience. Among the major concerns of analysts of industrial sector performance has been the failure to create jobs for the burgeoning labor force. The chapter also includes cross country models the Hirschman hypothesis the choice of technology and so on.