# Industrialization: Definition, Examples, and Global Impact on Society

> **Definition**
>
> Industrialization is the shift from an agriculture-based economy to one focused on mechanized manufacturing, often resulting in higher income and improved living standards.

## What Is Industrialization?

Industrialization is the transition from agricultural economies to manufacturing-based ones. [Mass production](https://www.investopedia.com/terms/m/mass-production.asp) has been an essential component of industrialization, which is characterized by economic growth, technological innovation, and urban migration. Industrialization typically is associated with an increase in average income over time and improved living standards. The period known as the Industrial Revolution in Great Britain, Europe, and America from the 18th and 19th centuries is a prime example of industrialization and the changes it wrought.

### Key Takeaways

*   Industrialization has historically transformed economies from agriculture-based to manufacturing-focused, driving substantial economic growth and technological innovation.
*   The process of industrialization can lead to major demographic shifts, as populations migrate from rural areas to urban centers in search of manufacturing jobs.
*   Over different eras, strategies for industrialization have varied, including export-led growth in some Asian economies and state-led initiatives in socialist countries.
*   Notable inventions like the steam engine, spinning jenny, and steam locomotive were pivotal during the Industrial Revolution, facilitating mass production and transportation.
*   Industrialization played a crucial role in creating urban consumer markets, sparking the development of retail innovations such as department stores and mail-order catalogs.

![Industrialization](https://www.investopedia.com/thmb/1Xm6dbmO75rmrN7rcY71gKFyxV0=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/industrialization-Final-4c8cc5800e15418e8cb62cced858f8e5.jpg)

*— Investopedia / NoNo Flores*

## How Industrialization Shapes Economies and Societies

Factors like government policy, labor-saving inventions, entrepreneurship, and demand for goods drive industrialization. It causes people to move from small farms to cities and towns for jobs.

A recent example is [China](https://www.investopedia.com/articles/investing/091515/3-industries-driving-chinas-economy.asp), where late 20th-century policy changes shifted the economy from farming to manufacturing.  

### The Industrial Revolution: A Catalyst for Global Change

In the western world, Industrialization is most commonly associated with the [Industrial Revolution](https://www.investopedia.com/terms/i/industrial-revolution.asp) in Europe that began in the late 18th century and the subsequent burst of industrialization in the U.S. through the 19th century.

In Europe, the era was characterized by a surge in local manufacturing of goods for export, made possible by a growing population of consumers. Great Britain played an outsized role in the process through technological innovations such as steam-powered machinery.

Industrialization spread quickly to the United States, a center of laissez-faire capitalism. Inventions like the cotton mill and steam power led to mill towns like Lowell, MA, and Pawtucket, RI.  

### Post-War and Modern Industrialization Trends

World War II increased demand for manufactured goods and boosted production capacity. After the war, prosperity boosted growth and maintained high production capacity.

Innovation, specialization, and wealth creation were the causes and effects of industrialization in this period.

### The Rise of the Asian Tigers in Global Manufacturing

In the late 20th century, Asia experienced rapid industrialization. The Asian Tigers (Hong Kong, South Korea, Taiwan, and Singapore) all participated in economic growth based on manufacturing for global customers.

China experienced its own industrial revolution after moving away from a strict communist model.

## Societal and Economic Impacts of Industrialization

19th-century innovations enabled mass production of goods. As manufacturing activity grew, transportation, finance, and communications expanded to support production.  

It also led to increased labor specialization and allowed cities to support larger populations, motivating a rapid demographic shift. People left rural areas in large numbers, seeking jobs in budding industries.

The Industrial Revolution led to unprecedented expansion in wealth and financial well-being for some. A larger middle class emerged as consumer demand for more goods and services grew and business creation boomed to feed the demand.  

## Strategies and Models of Industrialization

Various industrialization strategies have been used with different [levels of success](https://www.investopedia.com/ask/answers/033115/industrialization-good-economy.asp).

The Industrial Revolution in Europe and the United States initially took place under [mercantilist](https://www.investopedia.com/terms/m/mercantilism.asp) and [protectionist](https://www.investopedia.com/terms/p/protectionism.asp) government policies that fostered the early growth of industry. These later adopted a [laissez-faire](https://www.investopedia.com/terms/l/laissezfaire.asp) or [free-market](https://www.investopedia.com/terms/f/freemarket.asp) approach that encouraged foreign trade, providing new outlets for industrial output.

In the post-Second World War era, developing nations across Latin America and Africa adopted a strategy of [import-substituting industrialization](https://www.investopedia.com/terms/i/importsubstitutionindustrialization.asp), which involved protectionist barriers to trade coupled with direct subsidization or nationalization of domestic industries.

Nearly at the same time, parts of Europe and several East Asian economies pursued an alternative strategy of [export-led growth](https://www.investopedia.com/articles/investing/011416/exportled-growth-strategies-through-history.asp). This strategy emphasized the deliberate pursuit of foreign trade to build exporting industries and depended in part on maintaining a weak currency to make exports more attractive to foreign buyers.

Overall, export-led growth often works better than import substitution.  

### Industrialization Under Socialism: Challenges and Lessons

20th-century socialist countries often used centrally planned industrial programs. These include the first and second five-year plans in the Soviet Union and the [Great Leap Forward](https://www.investopedia.com/terms/g/great-leap-forward.asp) in China.

While these efforts did re-orient the respective economies toward a more industrial base and an increase in output of industrial commodities, they were also accompanied by harsh government repression, deteriorating living and working conditions for workers, and even widespread starvation.

## Key Examples of Industrialization Across Industries

Industrialization is dependent on growth and innovation in at least four industries.  

### Manufacturing

Industrialization began with the invention of machines that greatly increased the manufacture of goods.

One such invention was the cotton gin, patented by Eli Whitney in 1794. Whether hand-cranked or steam-powered, the machine made it possible to greatly increase the speed with which cotton fluff could be separated from its seeds before being woven into cloth.

Another was the spinning jenny, a contraption that could multiply the number of spindles that a single spinner could handle at the same time to weave cotton or wool.

Perhaps the key invention of them all was the steam engine, an improved version of which was invented by Scottish engineer James Watt in 1763. Coal-powered steam engines drove the Industrial Revolution.

### Mining

Many of the great inventions of the 19th century were developed to serve the mining industry.

*   The first working steam engine was devised to help remove flood water from coal and tin mines, where they often disrupted production.
*   The first use for the steam-powered locomotive was to transport ore from mines.  
    
*   Dynamite was patented in 1867 and was first used to blow up rocks that obstructed mining activities.  
    

### Transportation

The 19th century was a period of unparalleled innovation in ways to transport goods from and to marketplaces. Among them:

*   The steam locomotive. The prototype, known as Stephenson's Rocket and introduced in 1829, served for the next 150 years as a template for the production of vehicles to haul raw materials and finished products.  
    
*   The steamboat. The transport of goods and people was greatly expanded and speeded up with the introduction of the steamboat, which adapted steam technology to river craft.  
    

### Retailing

Before contactless payments and self-service checkouts, there were innovations in retailing that were designed to appeal to 19th century shoppers.

*   The department store. The first "store for everything" was John Wanamaker's, a six-story retail wonderland that rose in the heart of Philadelphia in 1861.  
    
*   The Sears catalog. It wasn't the first catalog but it was the first to reach practically every consumer in America with a vast range of goods, from children's clothing to prefabricated houses.  
    

## How Does Industrialization Impact Society?

Industrialization creates jobs that draw people from farms and villages to cities where manufacturing takes place. However hard those jobs were, they were often preferable to the precarious existence of a small farming family.

The result is a new generation of urban consumers. Businesses of all kinds spring up to provide goods and services to these consumers. Over time, a larger middle class of artisans and shopkeepers emerges.

A large working class also emerges, and conditions were often much harsher for them. The evolution of labor unions is a direct result of the conditions faced by the powerless workers of the Industrial Revolution.

## What Is Industrial Activity?

Industrial activity is any business process that is necessary to create a manufactured product. The activity may be related to the sourcing, processing, assembly, repair, or dismantling of a manufactured product.

## What Is Non-Industrial?

Non-industrial may be most often seen in zoning regulations or discussions regarding zoning regulations.

This is a wide category that may include everything except manufacturing activities and manufacturing sourcing such as mining.

Non-industrial land use includes retail and services businesses, entertainment and recreation sites, parking lots, and residential neighborhoods.

## The Bottom Line

Industrialization has shifted economies from an agricultural focus to one that's manufacturing-driven, sparking massive economic growth and technological innovation. Throughout history, it also has caused great upheaval and, sometimes, misery, in the lives of people who couldn't cope with the changes it caused. Industrialization began with the Industrial Revolution in Europe and North America in the 18th and 19th centuries and has spread globally, significantly affecting regions like China and the Asian Tigers. Industrialization led to urban migration, the rise of a middle class, and the development of labor unions due to changing working conditions. Different regions pursued diverse industrialization strategies, such as export-led growth and import-substituting industrialization, with varying success. Industrialization continues today, influencing economic and social landscapes worldwide.  

> **Article Sources**
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