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INDUSTRIALIZATIO

N BY INVITATION

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WHAT IS INDUSTRIALIZATION?
o 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.
o Industrialization is the system of production that has arisen
from the steady development, study, and use of scientific
knowledge. It is based on the division of labor and on
specialization and uses mechanical, chemical, and power-
driven, as well as organizational and intellectual, aids in
production. The primary objective of this method of organizing
economic life, which had its genesis in the mid-eighteenth
century, has been to reduce the real cost, per unit, of producing
goods and services.
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INDUSTRIALIZATION BY INVITATION:
o By the early 20th century, agriculture was not providing enough money or jobs
for the growing population of the Caribbean. Land was limited, soil was
exhausted and could only produce so many crops which could be sold for so
only so much money. Meaningful research for strategies to attain development
for economic progress was the new mainstay of countries in the
British colonized Caribbean. “Industrialization by Invitation”, a
development strategy pronounced by William Arthur Lewis, encouraged the
invitation of foreign guests by the host nation to manufacture in its space just
like that of the Puerto Rican Bootstrap Model in order to reduce the dependence on
sugar and agricultural produce in the economy. Ie he recommended that the capital
and markets for this industrialization process be sourced from established foreign
Multinational Corporations (MNCs).

o Governments at this time favoured the nature of this approach and pushed


for industrialization as it was argued that it would provide the capital that could
not be raised locally, it would contribute to economic growth, provide jobs for
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INDUSTRIALIZATION BY INVITATION IN
•THE CARIBBEAN:
Sir Arthur lewis referred to operation bootstrap when he was formulating the
industrialisation by invitation theory
• Operation bootstrap was geared at transforming the agrarian economy to an
industrial one (An agrarian economy is rural rather than urban-based. It is
centered upon the production, consumption, trade, and sale of agricultural
commodities, including plants and livestock.
• Incentives such as tax concessions, grants, and low wage rates were offered
to US and multi national companies to establish manufacturing facilities.
• Firstly US investments grew, stimulated by tax incentives, and then was
followed by substantial foreign investment.

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INDUSTRIALIZATION BY INVITATION IN
THE CARIBBEAN:
• Jamaica was one of the first commonwealth Caribbean islands to implement
policies influenced by Lewis’ model and it was called the ’Ten year plan of
development’
• It was issued in 1947 but revised in 1951
• It offered monetary incentives and invited North American companies to
conduct mining in the country
• In the 1960s the country invited investment in banking and insurance and in
the 1970s the generation of capital from investments allowed the government to
introduce policies such as the establishment of rural health schemes, free
secondary and higher education, a national minimum wage, equal pay for
women, and food subsidies
• Trinidad and Barbados also experienced similar implementations from the
industrialisation by invitation theory. Trinidad focused on manufacturing natural
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gas in the 1950s and Operation beehive was also launched in the same year by
Barbados which dealt with the garment industry
EFFECTS OF INDUSTRIALIZATION BY
INVITATION IN THE CARIBBEAN:
• Created free trade zones near ports which provided duty free and
unrestricted trade (Montego Bay- Jamaica)
• EPZs (export processing zones)- in 1997 there were 51 EZPs in the
Caribbean with 35 in the DR. EPZs enjoyed concessions such as no
taxes and duties
• Reinvestment in the region was lower than anticipated and, once
the financial incentives ended, firms moved their factories and set
up somewhere else

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